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Sustainable Solutions � BMS Company Profile � Slide 1

Sustainable SolutionsCompany Profile


Contents The Company Bayer MaterialScience

Sustainable Processes and Products

Global Megatrends

Solutions for Industry and Society

Bayer Corporation


Science For A Better Life


Materials for life

Bayer MaterialScience provideshigh-tech polymer solutions:

• through its 14,800 employees worldwide,

• in polyurethanes, polycarbonate and special applications,

• for customers in a wide range of industries, including: automotive, construction, electrical / electronics, medical, furniture and leisure,

• generating annual sales of € 10.8 billion (2011),

• with an R&D investment of more than€ 237 million (2011).


Close to our customers

Strategically positioned world-scalemanufacturing facilities, systems houses and innovation centers:

• Approximately 30 production sites around the world provide short delivery times and flexible service

• World-scale production plants meetthe needs of our global customers

• More than 30 local systems houses throughout the world

• Global network of competence centers, technical and innovation centers


The site in Shanghai

A world-scale, fully integrated manufacturing facility in Shanghai for the world’s fastest-growing market

• Total investment over the next years: ~ € 3 billion, including investments of about € 1 billion in China

• Polycarbonate projects comprise primary resin production and compounding

• Polyurethane projects comprise production of mMDI, MDI, TDI

• Coatings, Adhesives, Specialties projectscomprise production of Desmodur® N, Desmodur® L, HDI, PU dispersions


A one-stop shop

From orders to delivery, customers get the services they require:

Bayer MaterialScience Customer Service Center in:

• Leverkusen (Germany)

• Pittsburgh (USA)

• São Paulo (Brazil)

• Hong Kong (China)


One Business – One Team


The Executive Committee

Patrick ThomasChief Executive Officer

Dr. AxelSteiger-Bagel

Chief FinancialOfficer

Regional responsibilityfor EMEA / EEMEA

Dr. TonyVan OsselaerHead of Industrial

Operations

Dr. Joachim WolffHead of Polyurethanes Business Unit

Daniel MeyerHead of Coatings, Adhesives, Specialties Business Unit

Head of Industrial Marketing & Innovation

Regional responsibility for NAFTA/LATAM

Michael KoenigHead ofPolycarbonatesBusiness Unit

Regional responsibilityfor APAC

Michael BernhardtHead of Human Resources andLabor Director

Wolfgang MiebachHead of CorporateDevelopment

Richard NorthcoteHead ofCommunicationsand Public Affairs


A permanent eye on the future


A forward-looking strategy

Listening to customers – coupled with strong market intelligence – creates new business opportunities:

• New Technologies: We develop technical innovations through close co-operation withour large network of external companies, institutions, colleges, universities and customers

• Creative Center: We co-operate with external experts to focus on the needs of the market over the next decade

• Industry Innovation: We develop market-driven products and technologies


Investing in the future:More than € 237 million for R&D


The secret of success

Innovation today• Polyurethane insulation in buildings

• Lightweight materials for wind turbines e. g.

• Low- and zero-VOC coatings

• Polycarbonate glazing for vehicles and buildings

Innovation pipeline• Pultrusion

• Cosmetics

• Carbon nanotubes

• Polymer electronics


Stop heating the planet!


Foam for what?

Professor Otto Bayer: Invented polyurethane in 1937.

Nobody really knew what to do with it.

“It looks like a Swiss cheese.”

– Bayer Board Management


Grown from foam

Bayer MaterialScience is the leading producer of polyurethane systems and raw materials:

• Polyurethanes sales in 2011: over € 5.4 billion

• World-scale production sites strategically located in Europe, Asia and the Americas

• Global R&D centers located in Leverkusen, Dormagen (both Germany), South Charleston, WV (USA), and Shanghai (China)


Systematic innovations

Systems houses produce and supply polyurethane system solutions:

• More than 30 local systems houses throughout the world are complemented by 23 global competence centers

Advantages

• Close cooperation with the customer from development stage

• Customized expert on-the-spot support

• Short delivery times


Bright prospects


A clear vision

Dr. Hermann Schnell: Invented industrial scale polycarbonate in 1953.

While even his colleagues doubted his experiments, Schnell succeeded in synthesizing Makrolon® at the first attempt.


Tough and smart

BMS is one of the world’s leading manufacturers of polycarbonate resins, compounds and sheets:

• Polycarbonate sales in 2011: ca. € 2.9 billion

• Technology leader in polycarbonate manufacturing, application development and injection molding technologies

• World-scale production sites in Germany, ´Belgium, United States, Thailand and China close to world markets

• A growing global network with focused application portfolio


Market needs in focus

BMS is well positioned in the polycarbonate industry value chain:

• Global network of forward integration for sheets and compounding close to central growth markets

• Technology cells for key industries established that ensure global knowledge transfer into growth markets (e. g. glazing)

• Close network of technical centers and development capabilities with easy access for our customers and joint collaboration projects


Sitting on top of the league


A born inventor

Dr. Kuno Wagner: Invented the Desmodur ® N family of crosslinkers for light-resistant polyurethane coatings

His capacity for innovation is demonstrated by 305 patents granted in the field of organic and macromolecular chemistry, as well as the development of 24 products such as highly corrosion-resistant coatings for ships, aircraft and motor vehicles.


More than brilliant surfaces

A world-leading manufacturer of polyurethane-based coatings, adhesives and specialties:

• Special focus on aliphatic and aromatic polyisocyanates, polyurethane dispersions

• Specialties: functional films, carbon nanotubes, polyurethanes for the cosmetic and medical industries

• CAS sales in 2011: over € 1.8 billion


Increasing the ability to conservenatural resources for future generations


Unlimited opportunities to savenatural resources and energy

• Approximately 50 million kWh of energyis saved each year in the EU through theuse of polyurethane insulation.

• Wall insulation of 1.6 cm of PUR has thesame insulation efficiency as a 1.34 mthick concrete wall.*

• PUR are an important contributor toenergy conservation in refrigerators.Models designated A++ are 60 % moreefficient than refrigerators 15 years ago.

Polyurethanes –the sustainable material

Source: (*) ISOPA


Superior process technology

Minimizing the consumption ofprecious resources

• Advanced PUR process technologyresults in lower energy consumption,lower CO2 emissions and lower investment costs (TDI-GPP, PMPO, ODC, Impact).

• Introduction of STRUCTese® – system tomanage energy efficiency of operations

• Investment in future technology: CATAachen: CO2 dream reaction to utilizeCO2 as building block for new materials


Taking out energy …

ODC* technology revolutionizes chlorine production by hydrochloricacid electrolysis

Advantages

• 30 % less electrical energy

• Closed chlorine recycling during isocyanate production

Annual capacity

• Germany: 20,000 t chlorine

• in China: 215,000 t chlorine

* ODC: Oxygen Depolarized Cathode


… and reducing emissions

Gas-phase phosgenation for TDI production

Advantages

• 80 % less solvent

• Up to 60 % less energy

• 60,000 tons fewer CO2 emissions

• per world-scale plant of same size (250,000 tons p.a.)

• 20 % lower investment costs

Annual capacity

• China: 250,000 t TDI in 2011

• Europe: 300,000 t TDI in 2014


Toward zero emissions

EcoCommercial Building

• Rigid polyurethane foam for high- andlow-temperature insulation

• Lightweight, stable and transparentpolycarbonate sheets

• Components for durable, efficient photovoltaics

• Raw materials for low- and zero-VOCpaints, coatings and adhesives

• Building a network of specialists


The networked computers of 2030 will be at least several million times more powerful than today's machines

Global megatrends:The world is changing

Climate change and global warmingEnergy – shortage of fossil resources

Growing population /Changing societal demographics

Globalization / UrbanizationHealthcare revolution

Accelerating changes in technology / Dynamic market changes

Melting of the polar ice sheets would cause sea levels to rise by up to 70 m

In 1960 there were 2 megacities – by 2015 there will be 26

The world's population increasesby 1 billion every 14 years

A baby born in 2030 may live until 2160


Megatrend: Climate change

How the world’s climate could change during the next two decades:

• Extreme weather conditions in western Europe: arctic temperatures in winter, monsoon rains in summer.

• 38 % of the Earth’s land surfaceis at risk from desertification.*

• During the last 50 years the number of weather-related disasters has risenfrom 13 to 74 per year.**

Sources: (*) GTZ; (**) Munich RE


Our solutions

Sustainability sits at the heart of our strategy:

• Building insulation

• Insulation throughout the cool chain

• Materials for solar modules and wind power plants

• Lightweight materials for automotive and transportation

• Waterborne coatings

• High solid coatings


Megatrend: Urbanization / Globalization

• The 21st Century will be marked by the rapid growth of cities.

• By 2030, some 5 billion people will livein urban areas.*

• The number of people living in cities inAsia and Africa is currently growing ata rate of 1 million a week.*

• By 2030 the total built-up area of cities with more than 100,000inhabitants will increase by 175 %.*

Source: (*) UNFPA 2007 (United Nations Human Settlements Programme)


Our solutions

Innovative building materials• Coating materials and PCS sheets• PC/Blends for light management solutions• Polyurethane insulation materials• Composite materials• Anti-corrosion materials

Materials for greater mobility• Materials for auto components• Rail track construction solutions

Improved communications• Smart films• Data storage solutions• IT hardware materials


Megatrend: Growing population

• Currently, as much as 50 % of the foodproduced in developing countries is wasted.

• Protective food packaging has a limitedmarket in developing countries.*

• The amount of drinking water lost dueto pipe leakage in England and Walesamounts to 19 % of the total; in France the figure is 26 %.**

Sources: (*) ISOPA; (**) Allianz der öffentlichen Wasserwirtschaft


Our solutions

Food protection

• Packaging materials

• Materials to maintain and optimize the cool chain

Water supplies

• Systems for sealing drinking water pipes

• Materials for water bottles


Megatrend: Healthcare revolution

• Increased life expectancy requirescontinuous innovations in health care.

• 7.2 million people die from heart attacks every year. Many of themcould be saved if their condition wascarefully monitored.*

• In recent years the number of blood transfusions carried out worldwide hasdoubled.**

• Artificial blood will help to overcomethe supply bottleneck.

• Robots help with 80 % of prostateoperations in the USA.***

Sources: (*) German Heart Institute Berlin; (**) German Red Cross; (***) University of Munich Hospital


Our solutions

Prostheses

• Materials for prostheses

Targeted clinical application

• Medical coatings

• Medical devices


• Technological change as a growth driver

• New products such as multifunctional or holographic films open up new fields of application in a variety of industries

• Development of innovative film-based products for the electronics market

• Tapping new sources of energyin the sea

Megatrend: Accelerating technological change


Carbon nanotubes (CNT)

• of consistently high quality,

• can be manufactured on an industrial scale.

Films that:

• are transparent and flexible, and canconduct and store electrical energy,

• contract like a muscle.

Our solutions


Sports, leisure, medical etc.

Furniture / Wood

AutomotiveChemicals

Electro /Electronics

Construction

Customers at a glance: Sales in 2010 by industry sector

19%19%

16%16%

21%21%8%8%

20%20%

16%16%


The number of cars worldwide will risefrom 600 million today to 2.7 billion in 2050

Source: WIFO


• Fuel-efficient automobiles

• Emission reductions

• Lightweight and durable materials

• Short design cycles

• Recyclable materials

Industry and society require


• Environmentally friendly materials for durable coatings

• Materials for metal-free dashboards

• Energy absorbing materials for bumpers

• Polyurethane foam for car seats

• Lightweight materials to replace e. g.glass in windows, panorama roofs,headlamp lenses and bezels

• Technologies enabling easy and cost-efficient integration of functionalities in body and glazing parts

Customers in the automotive industry account for 20 % of the total sales of Bayer MaterialScience (2010).

Our solutions


Buildings are responsible for more than 40 % of global energy use

Source: WIFO



• Low-emission buildings

• Energy-efficient architecture

• Sustainable solutions

• Modular systems

Photo: Hearst Tower, New York (Green Building)


Our solutions

• Rigid polyurethane foam for high- and low-temperature insulation

• Lightweight, stable and transparent polycarbonate sheets

• Components for durable, efficient photovoltaics

• Flame retardant polycarbonate blends for smart energy metering and cabling

• Materials for low- and zero-VOCpaints, coatings and adhesives

• Polycarbonate for energy-saving LED and other interior lighting solutions

• A concept for zero-emission buildings

Customers in the construction industry account for 19 % of the total sales of Bayer MaterialScience (2010).


Polymer electronics:The $ 100 billion market

Source: ID-TechEX



• Smaller, faster and more efficient products

• Greater mobility

• Greater design freedom

• New sources for generatinginexpensive solar energy

• Forgery-proof protection fordocuments and goods

• Cost-efficient production

Photo: ProteXXion® identification technology


Our solutions

Film technology based on polyurethane and polycarbonate technology, for innovative products, such as diffuser sheetsto ensure uniform light distribution in LCD flatscreens

Customers in the electrical / electronic industry account for 17 % of the total sales of Bayer MaterialScience (2010).


The leisure industry is developing into the model economy of the future (Prof. Horst W. Opaschowski)


Industry and society need

• High-quality products

• Longer-lasting goods

• Wide design freedom

• Comfort

• Pollutant-free products

• Materials that breathe

• Ease of use


Our solutions

Material for

• sports and leisure,

• textile and clothing

• packaging,

• household, power tools and garden equipment,

• Consumer electronics.


Innovation in medical technology –because health is so important



• Safety

• Effectiveness

• Freedom in design, manufacture and application

• Hygiene protection

• Bio-compatibility

• Reliability of supply and consistency in manufacture


Our solutions

Polycarbonates and coatings for:

• medical devices

• eyeglasses

Polyurethanes for:

• visco-elastic foams

• housings of computer tomographs


Comfort and style –at home and in the workplace



• High-quality products

• Environmental compatibility

• Long-lasting products

• Comfort

• No health hazards

• Wide design freedom

• Durability


Our solutions

• Coating systems to protect high-quality furniture

• Polyurethane-based floor coatings

• Materials for flexible and rigid foams

• Polycarbonate for high-impact resistantfurniture with great design freedom

• Non-halogen, flame-retardant materials for household and electronics applications

Customers in the wood and furniture industries account for about 19 % of the total sales of Bayer MaterialScience (2010).


Bayer – An inventor companyand a global enterprise


Innovation and growth

Bayer is a global corporation active in healthcare, nutrition and high-tech materials.

• Full year sales: € 36.5 billion

• Number of employees: 111,800

• R & D expenditures: € 2.9 billion


Bayer: Science For A Better Life

Our mission:

• We help patients around the world by preventing, alleviating and curing diseases as well as improving diagnosis.

• We ensure a sufficient supply of high-quality food, feed and fiber.

• We make significant contributions in the fields of energy and resource efficiency, mobility and home living –to name just a few.


Thank you for your attention!


Forward-Looking Statements

This presentation may contain forward-looking statements based on current assumptions and forecasts made by Bayer Group or subgroup 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 Bayer’s public reports which are available on the Bayer website at www.bayer.com.

The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.

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