Group plans to boost China presence, expand business and fully exploit synergies

Germany-based Bayer AG plans to boost its presence in China by improving its innovation capacity and increasing production facilities, company executives said.

"We have made alliances with the two best universities in China, Peking and Tsinghua universities, which led to productive interactions on a number of levels and unchallengeable successes in China," said Kemal Malik, the board member responsible for innovation.

Bayer increased its global research and development investment to 3.2 billion euros ($3.9 billion) this year and its innovation projects in China are in full swing.

At Tsinghua University, the company has focused on different research aspects of innovative drug discovery. At Peking University, translational research are being made.

In terms of production, in November 1997 Bayer HealthCare started building its pharmaceutical manufacturing facility in Beijing.

This year, Bayer HealthCare invested an additional 100 million euros to increase the production capacity of the facility significantly.

This is expected to help ensure a reliable supply of high-quality products to meet the domestic demand for Bayer HealthCare's products.

This year the company also poured 3.6 billion yuan ($590 million) into acquiring leading local traditional Chinese medicine firm, Dihon, which is a privately held pharmaceutical company specializing primarily in over-the-counter dermatology products and herbal TCM products for various women's health indications.

Marijin Dekkers, chairman of the board of management of Bayer AG, pointed out that the move, which was mirrored in the United States with the acquisition of Merck, was part of Bayer's efforts to cement its foothold as a leader in OTC products.

He said that the segment has grown more strongly than it had for many years.

"Bayer has been very successful in this area with its long-term brand development strategies. The aim over the next two years is to launch innovative products on the market, further expand business in growth markets and fully exploit potential synergies arising from acquisitions," Dekkers said.

Global reach

The group plans to sharpen its focus on innovation in its life science businesses, healthcare and crop science.

"Overall, we expect the R&D-to-sales ratio to increase in the coming years," said Dekkers.

Of the 3.2 billion euro budget, Bayer HealthCare accounts for 70 percent and Bayer CropScience for 30 percent.

Dekkers said that as a world-class life science company, Bayer will continue to target attractive markets with high growth rates and in following this course, prospects would remain bright.

He explained that the company has more than 13,000 employees involved in research and development, of which 61 percent are in the healthcare sector and 39 percent in the crop science sector.

Dekkers said that developing new products was critical to the success of the life science businesses.

In the pharmaceuticals business, Bayer is one of the fastest-growing global companies, with leading positions as key indicators.

In the OTC products business, the company is ranked number two in the world. Bayer is also strong in the agriculture business. "We are one of the fastest-growing crop science companies," said Dekkers.