LEVERKUSEN, Germany, Sept 17 German diversified
healthcare and chemicals group Bayer is stepping up
cost cuts at its MaterialScience unit to counter production
overcapacity in the industry and high raw material prices.
"We are speaking to labour representatives. We are looking
into smaller adjustments," the group's Chief Executive Marijn
Dekkers told journalists late on Monday, declining to provide
specific cutback targets because talks are still ongoing.
"It's difficult to pass on higher costs to the customers in
the face of overcapacity. In addition, growth in demand from
China has weakened considerably."
Bayer's MaterialScience unit makes polycarbonate plastics
for panoramic roofs in Daimler's Smart and Mercedes
SLK convertibles and for blu-ray disks. It is also the world's
largest maker of chemicals for insulation and padding foams.
Dekkers reiterated that he considers the margin squeeze to
be temporary because growth would absorb excess production
capacity over the next two to three years.
Bayer, which celebrates its 150 year anniversary this year,
warned in July that its full-year profit target had become more
challenging as difficult plastics and chemicals markets temper
sales growth from new pharmaceuticals.
Its competitors include Saudi Arabia's Sabic in
the polycarbonates sector and BASF in polyurethane
(Reporting by Ludwig Burger and Frank Siebelt; Editing by