Bayer Plans 80% Sales Increases in Russia by 2017

09.09.2013 -

Bayer is targeting an 80% increase in sales to €1.3 billion over the five-year period up to 2017, CEO Marijn Dekkers said at a press conference in Moscow. At the same time, the German chemicals, pharmaceuticals and plastics group intends to increase the workforce by 800 to 2,400. Bayer's overall sales in Russia totaled €726 million in 2012, with HealthCare accounting for 67%. In the first half of 2013, revenues rose 12.5%.

All subgroups are expected to see "significant" sales growth in Russian sales over the next decade, Dekkers said, adding that the €2 billion threshold could be exceeded in 2022. This would place the country among its top ten markets. Collaborations and partnerships play a major role in Bayer's continuing development, the CEO said.

Bayer HealthCare, currently Russia's fourth largest health care company, is projected to increase its sales in this market by some 14% annually to around €910 million in 2017, thanks mainly to new product launches. The subgroup has entered a strategic partnership with local drug manufacturer Medsintez to jointly manufacture and commercialize diagnostic imaging products as well as pharmaceuticals,

Bayer Material Science (BMS), which accounted for 20% of group sales in Russia in 2012, is expected to increase revenue by 9% to €230 million by 2017. The subgroup is already experiencing strong growth in demand from the construction, automotive, E&E and furniture sectors, where Dekkers said it has "substantial market shares." Currently, per capita consumption of plastics materials in central Europe and the CIS countries is four times lower than in western Europe," Dekkers said.

The CEO also sees "major development potential" for Bayer CropScience in Russia. In 2012, the subgroup had sales of €93 million, 13% of the Bayer total. Revenue is forecast to climb by 8% to €150 million by 2017.  Spending for crop protection across the country is currently €10 per hectare, compared with €150 in Germany and €165 in France.

"With Russia having four times as much agricultural land as France and six times as much as Germany, we can easily imagine that with a slightly more intensive approach, Russian agriculture could increase its total production significantly," Dekkers remarked. Bayer plans to launch 23 new crop protection products in the country "in the coming years."