'The Chinese market has become an engine of growth for Covestro', said Bjoern Skogum, president of Covestro China, in an exclusive interview with CBN.
The success of a multinational corporation often depends on the performance of a number of key markets. It is clear that in Shengbingyong, the Chinese market, which accounts for 21% of revenue, is of crucial importance.
Ten years ago, China accounted for only 10% of Covestro's global operations, up from 21% so far in the third quarter of this year, especially after the U.S. suffered a hurricane in the third quarter of this year. Si Chuang largest market, and the future Covestro will continue to increase investment in China in Sheng Bing Yong view, the new energy vehicles, wind energy and light materials will be Covert in the Chinese market to further increase the force of growth point.
With the continuous upgrading and innovation of materials in the traditional fields and the involvement of more and more industry giants, competition in the new materials market is becoming more intense. Industry giants such as Covestro, BASF and DuPont will also be further engaged in electric vehicles, wind power generation , Bio-based materials, carbon dioxide and other fields.
First Financial News reporter learned that the development of new materials in China, also due to policy support and enter the fast lane of development in the new century, China's new material industry has grown in size.Industry Industry Institute provides "2016-2021 China New Materials Industry Market Prospects and Investment Strategy Analysis Report "shows that in 2010 China's new materials industry exceeded 650 billion yuan in scale, with an average annual increase of about 20% compared with 2005. And in the 'second five' period, the new Materials industry output reached 2 trillion yuan, an average annual growth rate of more than 25%.
For this reason, Covestro continue to increase investment in China.Up to now, Covestro in Shanghai Fengxian District, the total value of up to 3.1 billion euros in the factory has been basically completed, is about to start the next step of innovation and development and marketing applications. In addition to moving the global headquarters of polycarbonate in the Group's three major businesses to Shanghai and setting up its Asia Pacific R & D center in Shanghai, Sheng Bing Yong told CBI that 'Covestro will continue to invest in Caojing in the future.'
As China enters the new phase of industrial development, the demand for materials in the Chinese market is increasing day by day. For the rapidly growing market demand in China, is Covestro planning to increase production capacity in the future? In this connection, Sheng Bingyong told First Financial Correspondent that, Currently Covestro's production capacity in China to meet the needs of the Chinese market, expansion will not happen soon.
Covestro is sourced from Bayer, the predecessor of Bayer MaterialScience, and in 2014 Bayer proposed a plan to spin off the unit with a view to focusing on life sciences such as pharmaceuticals and agriculture in the future. In September 2015, Bayer spin-off and changed its name to Covestro .A month later, the company IPO on the Frankfurt Stock Exchange, raising 1.5 billion euros, while Bayer holds about 69% of the company shares.Afterward Bayer continued dilution of shares in Covestro. Eventually in September 2017, Covestro and Bayer signed a termination agreement on control.
In 2017, KOSEC executives team appeared more substantial adjustment, just experienced the continuous rise of KOSECC frequent executive adjustment at this time will have a greater impact on the company's strategy in China? Sheng Bing-Yong to the first financial reporter Said the top-level adjustments will not have a greater impact on Covesch's performance in China because the Chinese market plays a crucial role in Covestro's business landscape. "Continued to maintain the sustainable growth in the Chinese market is Covestro's strategy." Sheng Bing Yong added.
In fact, Covestro's performance has been growing since its spin-off, with Covestro achieving total sales of EUR 12.08 billion in 2015, an increase of 2.7% from the same period of previous year. EBITDA increased 41.3% To 1.64 billion euros in 2016. The company's net income also increased by more than double from 793 million euros to 795 million euros in 2016. First Financial Economist was informed that Covestro created the third-largest quarter in 2017 in corporate history In a strong quarter, net revenues rose 89.6% to 491 million euros from the third quarter of 2016. Meanwhile EBITDA and sales increased 50.2% and 16.9% respectively over the same period last year.