Sustainable Conduct

Production and Logistics

Production according to high quality, safety and environmental standards

Bayer operates production facilities at more than 140 sites in 39 countries. The safe and responsible operation of our facilities and the comprehensive safety of our employees and the people who live near our sites are of utmost importance to Bayer. Bayer also places great importance on protecting the environment and using materials and energy efficiently. We use our HSEQ stands for health, safety, environment, quality. management systems to steer these processes. Our commitment to environmental protection, health and safety extends beyond the scope of legal requirements. For capital expenditure projects exceeding €10 million, it particularly includes factoring in environmental aspects and performing a voluntary ecological assessment. In the case of acquisitions, we examine whether the applicable environmental and occupational safety regulations and fundamental employee rights are complied with at the production sites in question. Group policies additionally stipulate that new production sites must not be set up in areas that are statutorily protected with regard to natural characteristics, biodiversity or other factors.

Online Annex: A 1.4.2.2-1

limited assurance

Few sites close to protected areas

In an updated comparison of the geographical coordinates of our production sites against those of internationally recognized protected areas (ASEAN Heritage, Barcelona Convention, UNESCO-MAB Biosphere Reserve, Wetlands and World Heritage Convention and Ramsar Convention), we identified three sites that are within a radius of three kilometers from such areas. These are the Blesbokspruit protected areas in South Africa, Moreton Bay in Australia and Reserva Costa Atlantica de Tierra del Fuego (Atlantic Coast of “Land of Fire”) in Argentina. None of the sites examined is directly located in any of the named protected areas.

Pharmaceuticals and Consumer Health

Both segments operate their own production sites around the world at which active ingredients are manufactured and at which formulation and packaging services are performed for the product portfolio.

720 million

is being invested in production capacities for hemophilia medicines

Both Pharmaceuticals and Consumer Health continuously invest in their global production networks. Production capacities for the manufacture of hemophilia A products are being established at the Wuppertal and Leverkusen sites in Germany through the perennial and currently biggest capital expenditure program of Pharmaceuticals with a total volume of €720 million. The Beijing site in China is also being considerably expanded with a capital expenditure volume of some €100 million. Consumer Health’s biggest investment project, also with a volume of around €100 million, comprises the modification and expansion of its production sites in China.

Strategic Investments in Property, Plant and Equipment at Pharmaceuticals and Consumer Health

Production capacities for new rFactor VIII therapies in Wuppertal and Leverkusen, Germany

Expansion of R&D laboratory capacities in Wuppertal, Germany

Modernization of research facilities in Berlin, Germany

Modernization of site infrastructure in Wuppertal and Leverkusen, Germany

Expansion of production capacities in Beijing, China

Expansion of Quality Control Biologics in Berkeley, California, United States

Reconstruction and expansion of production site in Majinpu, China

Production capacities for new rFactor VIII therapies in Wuppertal, Germany

Expansion of R&D laboratory capacities in Wuppertal, Germany

Modernization of research facilities in Berlin, Germany

Modernization of site infrastructure in Wuppertal and Leverkusen, Germany

Expansion of production capacities in Beijing, China

Expansion of Quality Control Biologics in Berkeley, California, United States

Crop Science

The products of Crop Science are mainly produced at the segment’s own production sites. Numerous decentralized formulation and filling sites enable the company to quickly react to the needs of local markets. At these sites the active ingredients are processed according to local requirements and application areas. Packaging of the products also takes place in these facilities. Production of seeds takes place at locations close to our customers in Europe, Asia, and North and South America at our own farms or under contract.

2.4 billion

was invested by Crop Science between 2013 and 2016 in the production of crop protection products and seed.

We invested some €2.4 billion overall in property, plant and equipment between 2013 and 2016 to satisfy increased demand for crop protection products and seed. In addition to the expansion of production capacities, this included expansion of our research and development facilities. Here the focus was on the United States and Germany and on our network of breeding stations for various crops in Europe, North and Latin America.

Strategic Investments in Property, Plant and Equipment at Crop Science

Capacity expansions for herbicides in the United States and Germany

Construction of a production facility for insecticides in Dormagen, Germany

Expansion of production capacities for fungicides in Dormagen, Germany

Expansion of R&D facilities in Monheim, Germany

Establishment of breeding stations for various plant species worldwide

Expansion of R&D facilities in Raleigh, North Carolina, United States

Capacity expansions for herbicides in the United States and Germany

Construction of production facilities for insecticides in Vapi, India, and Dormagen, Germany

Expansion of production capacities for fungicides in Dormagen, Germany

Expansion of R&D facilities in Monheim, Germany

Establishment of breeding stations for various plant species worldwide

Expansion of R&D facilities in Raleigh, North Carolina, United States

Animal Health

We procure the active ingredients for our Animal Health products both from internal sources within Bayer and external suppliers worldwide. Our globally marketed animal health products are mainly manufactured at the sites in Kiel, Germany, and Shawnee, Kansas, United States.

Covestro

Covestro’s network includes eight world-scale production sites. We also operate several production facilities in selected countries for the formulation and supply of customized polycarbonate granule compounds and the manufacture of semi-finished products (polycarbonate sheets). Covestro also operates regional production facilities for derivatives of the Coatings, Adhesives, Specialties Business Unit and for functional films made of polycarbonate or thermoplastic polyurethane. Covestro continuously invests in its global production network:

Strategic Investments in Property, Plant and Equipment at Covestro

Capacity expansion of MDI facility in Brunsbüttel, Germany

Start-up of a production line for CO2-based polyols in Dormagen, Germany

Continuation and finalization of capital expenditure projects from 2014
– Doubling of production capacity for polycarbonate in Shanghai, China
– Doubling of production capacity for the aliphatic isocyanate HDI in Shanghai, China

Construction of a production line for CO2-based polyols in Dormagen, Germany

Continuation of capital expenditure projects from 2014
– Doubling of production capacity for polycarbonate in Shanghai, China
– Doubling of production capacity for the aliphatic isocyanate HDI in Shanghai, China

Efficient logistics concept implemented

Logistics at Bayer comprises not just the transport and warehousing of goods, but in fact the entire steering and monitoring of all flows of goods and logistics data for the Bayer Group. We work continuously to develop logistics concepts that account for safety, environmental and cost aspects in equal measure. Areas of focus in the ecological field include the reduction of energy consumption and CO2 emissions, for example by minimizing air transport or using logistic concepts that include rail- and waterways.

With an agile corporate structure, we operate according to management systems and directives with global validity. We use both internal capacities and external logistics partners for storage and transport services. Bayer selects these according to strict safety, environmental and quality criteria. Alongside the Corporate Supply Chain unit, each segment maintains its own logistics activities that are aligned toward the unique circumstances of the respective business model and products.