Bayer R&D Investor Day 2005

Transcription

1 Science For A Better Life MaterialScience Bayer R&D Investor Day 2005 December 8, 2005 London Bayer R&D Investor Day 2005 Successful Process Innovation Across the Portfolio Ian Paterson Board Member Innovation & Marketing Bayer MaterialScience Bayer R&D Investor Day London December 8, 2005 Ian Paterson Slide 2

2 Forward Looking Statements This presentation contains forward-looking statements based on current assumptions and forecasts made by Bayer Group management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in our public reports filed with the Frankfurt Stock Exchange and with the U.S. Securities and Exchange Commission (including our Form 20-F). The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments. Bayer R&D Investor Day London December 8, 2005 Ian Paterson Slide 3 Mastering Volume Converting 10 million m³ Per Year Bayer HealthCare: approx. 300 grams of Kogenate per year in Berkeley while Bayer MaterialScience converts about 10 million cubic meters Bayer R&D Investor Day London December 8, 2005 Ian Paterson Slide 4

3 Mastering Complexity others Chem. Industry Furniture & Wood Construction Electro/Electronic Automotive Our Global Network of Production Trains Bayer R&D Investor Day London December 8, 2005 Ian Paterson Slide 5 Focus on Two Key Product Areas Isocyanates for Polyurethanes Polycarbonates Polyethers for Polyurethanes Phosgenation >80% of Sales in Polyurethanes and Polycarbonates Ability to master our key processes Realization of world scale production trains Knowledge leader in high-performance phosgenation Catalysis know-how for highly efficient processes Inorganic Basic Chemicals Bayer R&D Investor Day London December 8, 2005 Ian Paterson Slide 6 3

4 Factors Driving Cost Leadership One Step Ahead Through Process Innovation Smart raw material & energy procurement Competitive site location Cost Leadership Efficient processes Economies of scale Best processes and economies of scale for global cost leadership Bayer R&D Investor Day London December 8, 2005 Ian Paterson Slide 7 Key Messages Successful process innovation across the portfolio Mastering world scale production Polycarbonate Mastering efficient phosgenation MDI Mastering chemical reaction efficiency PET Bayer R&D Investor Day London December 8, 2005 Ian Paterson Slide 8

5 Successful process innovation across the portfolio Mastering world scale production Polycarbonate Mastering efficient phosgenation MDI Mastering chemical reaction efficiency PET Bayer R&D Investor Day London December 8, 2005 Ian Paterson Slide 9 Polycarbonates Mastering World Scale PCS Makrolon is a market pacemaker O O O n O Main applications Electro/Electronic, Optical Discs, Automotive, Construction Global market share 29% (World #2) BMS capacity ,050kt p.a. BMS annual volume growth >11% (CAGR ) Competitive advantage through economies of scale Bayer R&D Investor Day London December 8, 2005 Ian Paterson Slide 10

6 Makrolon Process Chain Advantages of Bayer's Polycarbonate Technology Consequent process innovation results in Continuous production over the whole chain Liquid handling throughout the entire process - reduced complexity - increased productivity No intermediate solid handling as compared to competitors Benchmark quality Reduced conversion cost Basis for new world scale definition Polycarbonate process chain Phosgene Acetone Phenol BPA Polycondensation Purification Finishing Pelletizing Bayer R&D Investor Day London December 8, 2005 Ian Paterson Slide 11 BPA: Bisphenol A Driving the World Scale Definition Bayer's Process Technology Sets Global Standards S p ecific investm ent index 1,2 1 0,8 0,6 0, Antwerp Effect of capacity increase on investment costs 1999 Map Ta Phut (1) new production lines Capacity in kt p.a. per production line 2002 Map Ta Phut (2) Challenges for new world scale lines Fast implementation of new process technologies Simultaneous process development of the entire Polycarbonate process chain Up-scaling capabilities Engineering and chemical know-how Maintaining or even improving product quality while up-scaling Bayer R&D Investor Day London December 8, 2005 Ian Paterson Slide 12

7 Capitalizing on World Scale Cost Reduction Through Economies of Scale 100 Effect of capacity increase on conversion costs Peer group average kt polycarbonate lines allow significant cost optimizations through economies of scale Conversion cost index Bayer average 2005e Bayer average 2008e Bayer world scale 2002 Map Ta Phut, Thailand (First 100kt line worldwide) 2003 Uerdingen, Germany 2006e Caojing, China e Caojing ll, China Capacity in kt p.a. per production line Bayer MaterialScience currently the only PC producer running 100kt lines Bayer R&D Investor Day London December 8, 2005 Ian Paterson Slide 13 Debottlenecking Fast, Flexible and Cost Efficient Capacity Additions S p ecific investm ent index 1,2 1 0,8 0,6 0, Antwerp Effect of capacity increase on investment costs 1999 Map Ta Phut (1) new production lines debottlenecking Capacity in kt p.a. per production line 2002 Map Ta Phut (2) 180kt additional capacity in polycarbonate through debottlenecking between 2004 and 2007 Overcome upscale limitations by capitalizing on engineering and chemical know-how Simultaneous improvement of the entire process chain Significant cost and time benefit Capacity debottlenecking to adapt to short-term market needs Bayer R&D Investor Day London December 8, 2005 Ian Paterson Slide 14

8 Successful process innovation across the portfolio Mastering world scale production Polycarbonate Mastering efficient phosgenation MDI Mastering chemical reaction efficiency PET Bayer R&D Investor Day London December 8, 2005 Ian Paterson Slide 15 MDI Mastering Efficient Phosgenation MDI A key component of the polyurethane business H 2 C OCN NCO Main application Rigid PU foams for insulation Global market share 26% (World #1) BMS capacity kt p.a. BMS annual volume growth 6% (long-term CAGR) Market and technology leadership through innovative processes and economies of scale Bayer R&D Investor Day London December 8, 2005 Ian Paterson Slide 16

9 Setting Standards in the MDI Train Competitive Advantage Through Process Efficiency Best-in-class technology in all key production steps Plant capacity and process reliability Specific investment costs Energy consumption Raw material usage Waste management Ammonia Nitric Acid Hydrogen Methane Carbon Monoxide Chlorine Hydrogen Chloride Phosgene Benzene Nitrobenzene Aniline MDA MDI Bayer R&D Investor Day London December 8, 2005 Ian Paterson Slide 17 At The Forefront Bayer Process Innovations Along the MDI Train Nitrobenzene Aniline MDA MDI Technology 1995 Isothermal nitration Isothermal hydrogenation Conticondensation Tower phosgenation Technology today** Adiabatic nitration New hydrogenation process Single train conticondensation High efficiency phosgenation* Key improvement Energy recovery Improved reaction technology Economy of scale Energy optimization Conversion cost savings 40 % 75 % 60 % 55 % (Today** vs 1995) (**Technology basis for new plant) Process innovation leads to significant conversion cost savings *Proprietary process Bayer R&D Investor Day London December 8, 2005 Ian Paterson Slide 18

10 Bayer's High Efficiency Phosgenation Saving Conversion Costs Through Energy Optimization Phosgene Solvent + Solvent MDI MDA Reaction Solvent separation Solvent Proprietary process Energy costs are a major lever for MDI conversion costs Solvent separation accounts for approx. 80% of energy usage in MDI train Bayer R&D Investor Day London December 8, 2005 Ian Paterson Slide 19 Process Innovation Pays Off High Efficiency Phosgenation Delivers Returns Specific reactor capacity >+150% Specific capacity solvent distillation Energy costs +100% +40% +60% Index = % -40% Proprietary process * Potential * Status achieved in existing MDI plants Bayer's high efficiency phosgenation offers an increase in reactor capacity and savings in energy costs at a very low investment level Bayer R&D Investor Day London December 8, 2005 Ian Paterson Slide 20

11 Setting New Standards in Efficiency Bayer's MDI Plant in Caojing, China Process innovations lead to significant competitive advantages The new technology is the essential basis for a grass roots 350 kt MDI plant in Caojing starting up in 2008 Almost constant CapEx vs. the original 240 kt size Setting a new benchmark for economies of scale in MDI production Bayer R&D Investor Day London December 8, 2005 Ian Paterson Slide 21 Successful process innovation across the portfolio Mastering world scale production Polycarbonate Mastering efficient phosgenation MDI Mastering chemical reaction efficiency PET Bayer R&D Investor Day London December 8, 2005 Ian Paterson Slide 22

12 Polyether Polyols (PET) Mastering Chemical Reaction Efficiency PET A building block of our polyurethane business H O O O n OH Main application PUR flexible and rigid foams PET determines great variety of PUR product properties Global market share 26% (World #1) BMS capacity ,150kt p.a. BMS annual volume growth >4% (long-term CAGR) Minimizing conversion costs through superior catalysis know-how Bayer R&D Investor Day London December 8, 2005 Ian Paterson Slide 23 Reduced Complexity by IMPACT Technology Significant Equipment Reduction & Increased Throughput KOH Semibatch process PO Starter Catalyst PO EO Starter Reactor Reactor Neutralizer Filter Tank Filter Filter Cake Check Tank Storage IMPACT Continuous process PO EO Starter Catalyst Reactor IMPACT catalyst 1,000 times more active than KOH >500% reactor output increase No refining step ~2/3 of total conversion No waste disposal costs Storage Reduced energy consumption Higher product consistency Bayer R&D Investor Day London December 8, 2005 Ian Paterson Slide 24

13 Consequent IMPACT Application Fast Implementation of New Technology Specialty polyols 12% 16% Short chain polyols IMPACT accessibility IMPACT accessible Conventional slabstock polyols IMPACT under development 42% 30% Long chain active polyols Product group Conventional slabstock polyols Specialty polyols Short chain polyols Long chain active polyols Major PET product groups at BMS ~50% of accessible products converted to IMPACT in less than 5 years Bayer R&D Investor Day London December 8, 2005 Ian Paterson Slide 25 IMPACT Delivers Significant Economic Advantages PET site in Channelview, USA kt (2000) 204 kt (2004) + 96% Significant capacity increase without major capital expenditures % Improvement Variable conv. costs No additional fixed costs after implementation Variable conversion costs reduced by 40% Outlicensing of technology % Total production capacity -50 Bayer R&D Investor Day London December 8, 2005 Ian Paterson Slide 26

14 Science For A Better Life MaterialScience Bayer R&D Investor Day 2005 December 8, 2005 London