(Updates with closing share price in ninth paragraph.)
Nov. 16 (Bloomberg) -- Bayer AG said it expects sales in Asia to grow more than 60 percent by 2015 as the drug and chemical maker builds local factories and sales networks.
Revenue in the region may exceed 11 billion euros ($15 billion) by 2015, accounting for more than 25 percent of the company’s total, Chief Executive Officer Marijn Dekkers said today at a Shanghai news conference. Asia last year made up 20 percent of the Leverkusen, Germany-based company’s sales.
Bayer aims to capitalize on Asia’s expansion as the debt crisis curbs growth in Europe. The inventor of aspirin said last year it would cut 2,000 jobs by the end of 2012 under a program to shift resources to emerging markets.
“We have to invest our money where we have the biggest chances for growth,” Dekkers said yesterday at a dinner with journalists. “That’s in R&D and in developing markets.”
Bayer, which has spent 2.1 billion euros to expand its polymers production in Shanghai, will invest an additional 1 billion euros in the factory by 2016, Dekkers said while inaugurating a new plant to manufacture TDI, raw materials to make foam used in cars, mattresses and shoes.
China will be the biggest market for Bayer’s MaterialScience chemicals unit by 2015, Dekkers said. The executive has repeatedly rejected the idea of an overhaul for Bayer’s three-division structure.
Money for Drugs
“The question is where the priorities will lie,” Ulrich Huwald, an analyst for MM Warburg Investment Research in Hamburg, said in a telephone interview. Huwald has a “buy” recommendation on Bayer’s shares.
Bayer has delivered a series of pharmaceutical pipeline successes since Dekkers took over last year, Huwald said, and investors expect more investment in the company’s drugs unit. Bayer and Johnson & Johnson’s blood-thinner Xarelto won U.S. approval for atrial fibrillation patients this month and succeeded where rivals failed in reducing deaths following a heart attack, according to data released Nov. 13.
Bayer rose 0.3 percent to 47.38 euros in Frankfurt. The stock has dropped 12 percent including reinvested dividends this year.
Greater China will contribute about 6 billion euros of the 2015 revenue goal for Asia, the company said in a statement today. Bayer’s three divisions of crop chemicals, plastics and drugs had combined 2010 sales of 6.9 billion euros in Asia, including 2.9 billion euros in greater China.
The drug unit’s share of Bayer’s Chinese revenue will increase by 2015, according to the forecast Bayer presented today. The HealthCare division generated about 926 million euros in sales last year in China, about 32 percent of revenue in the country. It will account for about 2.5 billion euros, or about 42 percent of sales, by 2015, Bayer said.
General medicine and so-called primary care treatments for diabetes and high-blood pressure will drive drug sales growth in the rapidly urbanizing country, Dekkers said.
Sales in India will double to about 1 billion euros by 2015 from about 500 million euros last year, the company said. Sales in Japan are expected to rise to about 2.4 billion euros from about 2 billion euros.
--Editors: Marthe Fourcade, Phil Serafino
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