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Procurement and Distribution
Bayer HealthCare
The Pharmaceuticals segment generally procures the raw materials for manufacturing the active ingredients of its ethical pharmaceuticals from external suppliers. We hold strategic reserves to prevent supply bottlenecks and possible dependence on suppliers. To mitigate major price fluctuations, we generally purchase the building blocks and intermediates required to manufacture our principal active ingredients on the basis of global contracts or from several approved suppliers. The active ingredients of our ethical pharmaceuticals are currently manufactured almost entirely in Wuppertal and Bergkamen, Germany, for Bayer production facilities in Berlin, Leverkusen and Weimar, Germany; Berkeley and Emeryville, California; Garbagnate, Italy; São Paulo, Brazil; Madrid, Spain; Turku, Finland and elsewhere. Our products are primarily distributed through wholesalers, pharmacies and hospitals.
Since we compete with other drug suppliers worldwide, we actively seek to reinforce our external distribution network with co-promotion and co-marketing arrangements. In June 2007, we began co-marketing the Schering-Plough product
Zetia® in Japan within the scope of the strategic alliance formed with that company in 2004. (Please note that Schering-Plough Corporation, New Jersey, and the company acquired by Bayer in June 2006, i.e. Bayer Schering Pharma AG (formerly named Schering AG), Berlin, Germany, are unaffiliated companies that have been totally independent of each other for many years.) In the United States, Schering-Plough also distributes Primary Care products from Bayer and co-markets our erectile dysfunction drug Levitra® with GlaxoSmithKline.
In our Consumer Health segment the focus is on products marketed directly to consumers. The Consumer Care Division, which concentrates on non-prescription drugs, procures certain high-volume raw materials such as acetylsalicylic acid and clotrimazole from within the Bayer Group, and other principal raw materials such as naproxen, ascorbic acid, citric acid and paracetamol from third parties. These are generally readily available. To minimize business risks, we diversify our raw material procurement sources worldwide and conclude long-term supply agreements. Among the division’s largest production sites are the facilities in Myerstown, Pennsylvania, United States; Gaillard, France; and Grenzach, Germany. While the division’s sales and distribution channels outside Europe are typically supermarket chains, drugstores and other large retailers, pharmacies are the usual distribution channel in Europe.
About one quarter of the products of the Diabetes Care Division are manufactured or assembled directly by Bayer, while the rest are procured from original equipment manufacturers (OEMs). The price and availability of most materials are safeguarded through contractual agreements and are therefore not subject to major fluctuations. We hold strategic reserves of certain direct materials or finished products in order to be able to supply our customers consistently and reliably. The division’s biggest production site is located in Mishawaka, Indiana, United States. Our Diabetes Care products are generally marketed to consumers outside Europe through pharmacies, drugstores, mass merchants, hospitals and wholesalers. In Europe, they are sold mainly through pharmacies.
The Animal Health Division procures the pharmaceutical ingredients for its veterinary medicines both from within the Bayer Group and from external suppliers throughout the world. Its products are manufactured mainly at the sites in Kiel, Germany, and Shawnee, Kansas, United States, and marketed worldwide. Depending on local regulatory frameworks, animal health products may be available to end users with a prescription issued by a veterinarian or over the counter from retail stores, drugstores and pharmacies.
Since we compete with other drug suppliers worldwide, we actively seek to reinforce our external distribution network with co-promotion and co-marketing arrangements. In June 2007, we began co-marketing the Schering-Plough product
Zetia® in Japan within the scope of the strategic alliance formed with that company in 2004. (Please note that Schering-Plough Corporation, New Jersey, and the company acquired by Bayer in June 2006, i.e. Bayer Schering Pharma AG (formerly named Schering AG), Berlin, Germany, are unaffiliated companies that have been totally independent of each other for many years.) In the United States, Schering-Plough also distributes Primary Care products from Bayer and co-markets our erectile dysfunction drug Levitra® with GlaxoSmithKline. In our Consumer Health segment the focus is on products marketed directly to consumers. The Consumer Care Division, which concentrates on non-prescription drugs, procures certain high-volume raw materials such as acetylsalicylic acid and clotrimazole from within the Bayer Group, and other principal raw materials such as naproxen, ascorbic acid, citric acid and paracetamol from third parties. These are generally readily available. To minimize business risks, we diversify our raw material procurement sources worldwide and conclude long-term supply agreements. Among the division’s largest production sites are the facilities in Myerstown, Pennsylvania, United States; Gaillard, France; and Grenzach, Germany. While the division’s sales and distribution channels outside Europe are typically supermarket chains, drugstores and other large retailers, pharmacies are the usual distribution channel in Europe.
About one quarter of the products of the Diabetes Care Division are manufactured or assembled directly by Bayer, while the rest are procured from original equipment manufacturers (OEMs). The price and availability of most materials are safeguarded through contractual agreements and are therefore not subject to major fluctuations. We hold strategic reserves of certain direct materials or finished products in order to be able to supply our customers consistently and reliably. The division’s biggest production site is located in Mishawaka, Indiana, United States. Our Diabetes Care products are generally marketed to consumers outside Europe through pharmacies, drugstores, mass merchants, hospitals and wholesalers. In Europe, they are sold mainly through pharmacies.
The Animal Health Division procures the pharmaceutical ingredients for its veterinary medicines both from within the Bayer Group and from external suppliers throughout the world. Its products are manufactured mainly at the sites in Kiel, Germany, and Shawnee, Kansas, United States, and marketed worldwide. Depending on local regulatory frameworks, animal health products may be available to end users with a prescription issued by a veterinarian or over the counter from retail stores, drugstores and pharmacies.
Bayer CropScience
Bayer CropScience procures most of its raw materials for the manufacture of crop protection products from external companies around the world. The cost of some raw materials depends on fluctuating crude oil and energy prices and freight charges.
Our business is subject to the growing seasons for the relevant crops and the respective distribution cycles.
Bayer CropScience operates more than 40 production facilities of its own around the world. Among the largest are the plants in Dormagen and Frankfurt, Germany; Institute, West Virginia and Kansas City, Missouri, United States; and Vapi, India. In addition to the central locations for the manufacture of our active ingredients, a network of decentralized formulation and filling plants enables us to respond rapidly to local market needs.
Our crop protection products are marketed either via wholesalers or directly through retailers by means of a two- or three-step distribution system, depending on local market conditions.
The products of the Environmental Science Business Group are addressed to both professional users and consumers in the non-agricultural segment and are distributed through different channels. Our green industry, pest control and vector control products are marketed directly to professional users, while home and garden products are sold to consumers through specialized retailers.
BioScience produces its commercial seeds in numerous breeding stations around the world. The products are made available to growers, breeders, specialist dealers and processing industries. Traits developed using plant biotechnology are either incorporated into our own seeds or outlicensed to other seed companies for use in their products. In some cases, traits are provided to other companies that use the technology in their research.
Our business is subject to the growing seasons for the relevant crops and the respective distribution cycles.
Bayer CropScience operates more than 40 production facilities of its own around the world. Among the largest are the plants in Dormagen and Frankfurt, Germany; Institute, West Virginia and Kansas City, Missouri, United States; and Vapi, India. In addition to the central locations for the manufacture of our active ingredients, a network of decentralized formulation and filling plants enables us to respond rapidly to local market needs.
Our crop protection products are marketed either via wholesalers or directly through retailers by means of a two- or three-step distribution system, depending on local market conditions.
The products of the Environmental Science Business Group are addressed to both professional users and consumers in the non-agricultural segment and are distributed through different channels. Our green industry, pest control and vector control products are marketed directly to professional users, while home and garden products are sold to consumers through specialized retailers.
BioScience produces its commercial seeds in numerous breeding stations around the world. The products are made available to growers, breeders, specialist dealers and processing industries. Traits developed using plant biotechnology are either incorporated into our own seeds or outlicensed to other seed companies for use in their products. In some cases, traits are provided to other companies that use the technology in their research.
Bayer MaterialScience
The primary raw materials for our products are petrochemical feedstocks. We generally procure these on the open market by way of long-term agreements that serve to safeguard the supply of raw materials on competitive terms.
Bayer MaterialScience manufactures its products in close proximity to its customers at 30 locations around the world. Our largest production facilities for the European market are located in Dormagen, Krefeld-Uerdingen and Brunsbüttel, Germany; Antwerp, Belgium; and Tarragona, Spain. The major production sites for the U.S. market are at Baytown, Texas, while customers in the Asia-Pacific region are supplied chiefly from Map Ta Phut, Thailand and Caojing, China. Our focus is on world-scale facilities.
Products marketed by the MaterialScience subgroup are polyurethanes, polycarbonates, raw materials for coatings and adhesives, and selected basic chemicals.
These products are mainly used in the automotive, construction, electronics, information technology, furniture, timber, chemical, sports equipment, leisure goods, textile, medical technology and manufacturing industries.
Our plastics materials are marketed primarily through regional distribution channels or directly to customers. We also work together with trading houses and local distributors who are responsible for business with small customers. Major customers with global operations are serviced directly by our key account managers.
Bayer MaterialScience manufactures its products in close proximity to its customers at 30 locations around the world. Our largest production facilities for the European market are located in Dormagen, Krefeld-Uerdingen and Brunsbüttel, Germany; Antwerp, Belgium; and Tarragona, Spain. The major production sites for the U.S. market are at Baytown, Texas, while customers in the Asia-Pacific region are supplied chiefly from Map Ta Phut, Thailand and Caojing, China. Our focus is on world-scale facilities.
Products marketed by the MaterialScience subgroup are polyurethanes, polycarbonates, raw materials for coatings and adhesives, and selected basic chemicals.
These products are mainly used in the automotive, construction, electronics, information technology, furniture, timber, chemical, sports equipment, leisure goods, textile, medical technology and manufacturing industries.
Our plastics materials are marketed primarily through regional distribution channels or directly to customers. We also work together with trading houses and local distributors who are responsible for business with small customers. Major customers with global operations are serviced directly by our key account managers.
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