Friedrichshafen, Germany — It’s all systems go for Covestro – the former Bayer MaterialScience unit of global chemicals giant Bayer AG – that opened for business on 1 Sept.
Based in Leverkusen, Germany, Covestro ranks as one of the world’s largest makers of polycarbonate and polyurethane, employing 14,200 worldwide and with 2014 sales of €11.7 billion.
The new firm is led by CEO Patrick Thomas, along with chief financial officer Frank Lutz, production and technology head Klaus Schaefer and innovation head Markus Steilemann. Those four also make up Covestro’s board of management.
In September, Thomas commented on Covestro’s vision statement, “To make the world a brighter place.”
“We fulfill this vision by inspiring innovation and driving growth through profitable technologies and products that benefit society and reduce environmental impacts,” said Thomas, a 36-year chemicals veteran who joined Bayer in 2006.
Covestro made its financial market debut on 6 Oct. The stock’s per-share price opened at €26 ($29.30).
Bayer officials previously said they expected the IPO to raise less than was initially projected as a result of uncertainties over the U.S. Federal Reserve’s interest rate policies and about future economic growth in China.
As a result, financial expectations for the IPO were lowered from $2.8 billion to $1.7 billion. Bayer will donate an extra $1.1 billion to Covestro to maintain the debt on the new firm’s balance sheet at $4.5 billion.
Major end markets for Covestro include automotive, construction and electronics. It also sells into furniture, sporting goods, textiles and many other uses.
Regional polycarbonates head Jim Chrise told Plastics News that collaborating with customers to develop solutions that meet their needs will be Covestro’s primary focus, just as it was when the business operated as Bayer MaterialScience.
“We’ll continue to listen to our customers and respond with creative solutions,” Chrise wrote in an email. “Only now, we expect to be able to do so with greater speed, flexibility and efficiency.”
Just over 50 percent of the firm’s sales come from PU, with PC bringing in about 25 percent and the remainder from coatings, adhesives and specialties.
For Covestro, PC “remains a key part of our global product portfolio and one of the three strategic pillars of our business, alongside polyurethanes and coatings, adhesives and specialties,” he added.
Chrise declined to comment on economic conditions in advance of the IPO. But among individual end markets, he said that building and construction “is a substantial opportunity area for us, as designers and architects look to energy-efficient materials for sustainable building.”
Chrise added that the automotive sector “remains a key focus area, as manufacturers continue to seek higher levels of design freedom and greater fuel efficiency through lightweighting.”
Another key focus for Covestro at Fakuma 2015 is mobility. Officials said that with its innovative material developments, the company enables automotive interior designs that are both decorative and functional. New developments for lighter-weight vehicles with greater individuality will be presented at the show, as well as customer-oriented project development for car interiors.
Bayer first announced its plans to spin off the unit in September 2014, with officials saying the venerable German firm wanted to focus on being a life sciences business, centered on its health care and crop science units.
At that time, Bayer chairman Marijn Dekkers said that board members “firmly believe that MaterialScience will use its separate status to deploy its existing strength even more rapidly, effectively and flexibly in the global competitive arena.”
Following the spin-off, Covestro is Europe’s fourth-largest chemical company. The firm has eight large global production sites, including four in Germany — at Brunswbuttel, Dormagen, Krefeld-Uerdingen and Leverkusen. Covestro operates similar large production sites in Antwerp, Belgium; Shanghai; Map Th Phut, Thailand; and Baytown, Texas.