Management Report & Annexes | Report on Economic Position

15.5 Business Development in the Emerging Markets

The Emerging Markets again accounted for a disproportionately large share of sales growth in 2014. For reporting purposes we have defined the Emerging Markets as Asia (excluding Japan), Latin America, Eastern Europe, Africa and the Middle East.

Sales in these markets rose by 11.3% (Fx adj.) in 2014 to €15,919 million (2013: €15,040 million), with encouraging gains in Latin America, Asia and Eastern Europe. The Emerging Markets accounted for 37.7% of sales (2013: 37.5%).

Sales Development in 2014


HealthCare raised sales in the Emerging Markets by a substantial 12.9% (Fx adj.) in 2014 to €6,493 million (2013: €6,236 million). The strongest absolute growth was recorded in China. The Latin America region posted strong currency-adjusted increases, particularly in Brazil and Argentina. We achieved very gratifying sales growth in Russia, primarily in Consumer Care. The Emerging Markets accounted for 32.5% (201333.0%) of total HealthCare sales.


CropScience improved sales in the Emerging Markets by 16.6% (Fx adj.) in 2014, to €4,409 million (2013: €3,959 million). Business developed particularly well in Latin America, especially in Brazil and Argentina. We posted encouraging sales gains in Eastern Europe and Africa/Middle East, where we also achieved double-digit (Fx adj.) growth rates. Business in Asia expanded as well. The Emerging Markets’ share of total CropScience sales in 2014 was 46.4% (2013: 44.9%).


In the Emerging Markets, MaterialScience had sales of €4,951 million in 2014 (2013: €4,761 million), up 5.4% (Fx. adj.) year on year. Here we achieved our strongest growth in Asia, while gains were also registered in Eastern Europe and Latin America. Sales in Africa and the Middle East were below the prior-year level. The Emerging Markets accounted for 42.5% (201342.4%) of total sales at MaterialScience.

We are active in the Emerging Markets in a variety of ways. Information and selected examples are contained in the

limited assurance

Online annex: 3-15.5-1

HealthCare is steadily expanding its activities in the Greater China region to strengthen global research, development and production capacities and to incorporate the clinical profiles and medical needs of Asian patients into drug development activities at an early stage.

In January 2014, Bayer HealthCare and Peking University, Beijing, China, entered into a three-year strategic partnership in the area of translational research and its use in drug discovery. The Innovation Center China established by HealthCare in 2009 celebrated its fifth anniversary in 2014.

We plan to expand our production facility at the Beijing site by the end of 2016. The roughly €100 million in capital expenditures decided upon in March 2014 will nearly double the production capacity in Beijing.

The acquisition of Dihon Pharmaceutical Group Co. Ltd., China, adds traditional Chinese medicine and other areas to our Consumer Care portfolio.

To improve comprehensive health care, the subgroup is also working with the Chinese health ministry to organize training measures for physicians in the western part of the country.

CropScience aims to contribute to increased agricultural productivity in regions such as Africa and intends to expand its presence there. The subgroup’s range of products and services is tailored to the needs of African farmers and includes integrated crop solutions based on improved seed varieties and modern crop protection technologies. We also run product safety programs and provide training in good agricultural practice. Furthermore, we view our involvement in public-private partnerships (ppps) such as the German Food Partnership project of the German Ministry for Economic Cooperation and Development (bmz) as an important way to help further expand value chains in Africa and safeguard food supplies. We cooperate with local governments, farmers’ associations and cooperatives, non-governmental organizations and agricultural input industries, as well as banks and insurance companies.

CropScience also aims to help raise living standards in rural areas of India by boosting value added and ensuring it is reinvested in the community. An example is the Model Village Project launched in 2010. The goal of this project is to train farmers in sustainable cultivation methods and show them new ways of irrigating their land in order to improve productivity. Parallel measures are also being taken to improve general living conditions, such as the commissioning of a drinking water purification plant and the launch of health promotion and children’s educational programs. The Bayer Prayas Rural Development Association coordinates the activities at the local level in the model villages in the state of Karnataka in southwest India.

In cooperation with external partners, MaterialScience is evolving and implementing technical solutions to help low-income people in developing countries and Emerging Markets gain improved access to high-quality, safe and easy-to-build yet affordable housing. These activities currently focus on Asia. The company is mainly contributing its expertise in the field of rigid polyurethane foam for the construction industry.

Last updated: February 26, 2015  Copyright © Bayer AG