LEVERKUSEN, Germany (July 30, 2009)—Bayer MaterialScience said it will permanently shut down certain capacities for its Polyurethanes, Coatings, Adhesives, Specialties and Basic Chemicals units by the end of the year.
The decision follows volumes and selling prices "substantially below the prior-year period" in Bayer's second quarter 2009 results, the firm said.
In the MaterialScience unit, PU materials sales reported the steepest decline, falling by 38.6 percent compared to the same period in 2008, while the company's CAS unit reported a 29.3-percent decline in sales. For the unit as a whole, sales dropped 30 percent to $2.6 billion as demand in key industries was significantly lower than the prior-year, the statement said.
Earnings for the MaterialScience unit before special items declined by 67.5 percent compared to Q2 2008.
Bayer said however that lower raw material and energy costs and a divestment gain of 21.1 million had "a positive effect," adding that a restructuring plan launched in 2007 also resulted in cost savings for MaterialScience.
Bayer Chairman Werner Wenning said the company's high-tech materials business stabilized in the second quarter, with sales and earnings showing a marked improvement against the first three months.
Further structural measures are to take place depending on market developments, particularly in Polycarbonates, the company said.
Group sales fell by 5.9 percent to $11.3 billion compared to the same period last year and earnings before special items dropped by 6.9 percent to 2.5 billion Operating profit fell by 11.8 percent to Euro 1.5 billion compared to Q2 2008.