Bayer Worldwide

Important future market: the Asia-Pacific region

Asia-Pacific, with its enormous growth potential, is one of Bayer's most important future markets. In 2007 Bayer's approximately 18,900 employees in the region generated sales of EUR 5.2 billion — about 16 percent of the Group total. The company's goal is to increase the share of Asia-Pacific sales substantially over the medium term.

Asia/Pacific
Sales	€5,211 million (+13.0 %)*
Employees	18,900
R&D expenses	€126 million
Companies	60**

sales by market, percentage increase from previous year (as of Dec. 31, 2007)

consolidated subsidiaries (as of Dec. 31, 2007)

Australia/
New Zealand

India

North ASEAN

The Greater China country group, comprising the People’s Republic of China (including Hong Kong) and Taiwan, is Bayer's largest market in Asia. The People's Republic plays an important part in Bayer's investment plans. With China’s manufacturing and construction industries expanding rapidly, the country is an important market for Bayer's polymer products and a focus for capital expenditures.

In September 2006 Bayer inaugurated new production facilities of the Bayer MaterialScience subgroup in Shanghai. The site at the Shanghai Chemical Industry Park represents a total capital expenditure volume of about EUR 1.8 billion through to 2012 and is Bayer´s biggest-ever investment project outside of Germany.

The Bayer Integrated Site Shanghai includes a production facility for the polycarbonate Makrolon® with a starting capacity of 100,000 tons per year; a splitter, with a capacity of 80,000 tons per year, for separating crude MDI into the polyurethane raw materials monomeric and polymeric MDI; and production units for polyurethane coating raw materials, among them HDI with a capacity of 30,000 tons per year.

Thus for the first time all the major business units of Bayer MaterialScience will have local production facilities with world-scale capacities at the Shanghai Chemical Industry Park.

As the world´s second largest economy, Japan is very important for Bayer’s success in Asia, accounting for about 30 percent of Group sales in the region. The focus here is on health care and agricultural products, which together account for about two thirds of the company's sales in Japan. With its crop science research center, Japan also forms an important part of the Bayer Group’s international research network. Imidacloprid, the active ingredient widely used in insecticides, was invented by researchers in Japan.

The South ASEAN country group comprises Singapore, Indonesia, Malaysia, the Philippines, Brunei and East Timor. Singapore is the regional management base for many of the business entities operating in the region. In Indonesia, Bayer´s business is driven by MaterialScience and HealthCare, and in the Philippines by HealthCare and CropScience.

For Bayer, South Korea is a key market in the Asia-Pacific economic region. As one of the major global players in the Korean market, Bayer has actively participated in the growth of the country´s economy. With the acquisition of Schering, Bayer HealthCare now accounts for nearly 42 percent of total sales in Korea. In the field of animal health products, Bayer has a particularly strong position in South Korea, where it is the market leader.

The Bayer Group's activities in Asia-Pacific also include a strong presence in Australia/New Zealand. Ever since Bayer entered the Australian and New Zealand markets, the company has been an active partner in this region's growth. It employs around 880 people in the two countries and operates four production sites. The main focus is on health care, agriculture and high-tech materials.

The India country group comprises as its main markets India, Sri Lanka and Bangladesh. India is an important market for Bayer in Asia, and the Group has set up production sites at seven locations in the country. Its biggest business areas are agriculture and innovative materials.

Thailand, Vietnam, Myanmar, Laos and Cambodia form the North ASEAN country group. The single largest market in this country group is Thailand, which also plays a key role in the expansion of the company's regional manufacturing base in Asia-Pacific. The total investment for building up a world-scale production site for plastics in Map Ta Phut, on the eastern seaboard of Thailand, is about EUR 400 million. Against the background of growing demand for its polycarbonate thermoplastic Makrolon®, Bayer is building up the Map Ta Phut site in Thailand into a regional production base as part of the worldwide production network.