Germany's Bayer unveiled an overhaul at its plastics unit today after reporting a higher-than-expected rise in group quarterly operating profit.
Bayer said it has initiated cost-cutting measures at its Materialscience unit to help save €300 million annually by the end of 2009.
The unit faces rising competition amid a weak dollar and high energy costs. The company expected total special charges of €150 million to €200 million through 2009 to achieve these savings and to strengthen its earnings power.
Third-quarter group earnings before interest, taxes and special items rose 24 per cent to €953 million, beating a €911 million average estimate from analysts.
Bayer, which invented Aspirin more than a century ago, boosted its healthcare business after its €17 billion acquisition of Schering last year. This is the fifth full quarter that Schering has contributed to Bayer's results.
Bayer said it now expected an increase in group sales to more than €32 billion in 2007, an increase of about 6 per cent after adjusting for portfolio and currency effects.