Bayer is to reorganise its Crop Science Division with the aim of discontinuing its activities in Frankfurt am Main, Germany, by the end of 2028. The company said that the move is part of a strategy to ensure the competitiveness of its crop protection production, and R&D activities. Some operations at the site are set to be sold while others will be relocated to Dormagen.
The company added that production at its site in Dormagen will be streamlined to ensure its future competitiveness.
Explaining its decision, Bayer said that manufacturers of generic crop protection production products, particularly from Asia, have built significant overcapacity in recent years and are pushing into the market with persistently low prices, some of which are below the manufacturing cost of crop protection products in Europe. The company adds that the situation is exacerbated by increasing regulatory restrictions and national export barriers.
To tackle these headwinds, Bayer has said that its “focus will therefore be even more strategic” with “innovative technologies and products that offer growers differentiated value not matched by generics.”
The Frankfurt site is home to Bayer’s herbicide active ingredients and formulations, as well as research and development, and employs 500 people. As well as exploring divestment opportunities, Bayer said that R&D activities will be optimised from a cost perspective, and all essential activities will be relocated to the main site in Monheim am Rhein where insecticide and some fungicide R&D is carried out. Bayer said that these steps would strengthen Monheim as a focused centre for crop protection R&D.
Other production activities will be moved to Bayer’s sites in Dormagen and Knapsack, or integrated into the European formulation network.
Dormagen will continue as Bayer’s production facility with the largest portfolio of active ingredients and crop protection products.
As part of the streamlining process at Dormagen, production of a number of generic active ingredient and their associated formulations, which are available at significantly lower prices on the global market, will be discontinued. Capacities will be focused on “innovative and strategic technologies and products that differentiate Bayer from its competitors.”
“We are committed to Germany. However, to live up to this commitment in times of considerable challenges, we need to adjust,” said Frank Terhorst, Head of Strategy and Sustainability at Bayer Crop Science Division. “This results in difficult decisions that are painful for many colleagues. However, these steps are urgently needed to counteract the significant overcapacity and a hopeless price competition with generics manufacturers from Asia, so that we can maintain production facilities in Germany and continue to produce competitively for our customers.”
This move by Bayer is part of the company’s ‘five-year framework’, set out in March, to counter the challenges facing the Crop Science Division. The division is expected to achieve above-market growth and deliver more than 3.5 billion euros of incremental sales from innovation by 2029.
Further reading:
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