Asian demand brings larger than expected gains to Bayer

12-Aug-05

Q2-2005 profits at Bayer AG, Europe's second-largest chemical maker, have almost tripled. Though sales rose by 20% to 7.05 billion euros in this period, Q2 net income jumped to E406 million from 146 million euros. This spectacular jump can be attributed to rising demand from Asia (almost 20% of Bayers' sales are from Asia), which allowed the German company to raise prices. Faced with slower growth in the matured markets of Europe and North America, Bayer along with other chemical makers want to capitalize on swelling demand in Asia, led by China, the world's fastest growing major economy. Much of the multi faceted company's growth this year is expected to come from its plastics business. Sales of over 26 billion euros has been forecast, one billion more than the previous target, with operating profit doubling to about 40% this year.