MOSCOW (MRC) -- Covestro’s board of management and employee representatives have agreed a plan to reduce working hours in Germany and to cut salaries of all employees as the company faces the coronavirus 2019 pandemic and a decline in consumer demand, said Chemweek.
These measures are planned for a period of six months starting on 1 June 2020 and will serve as a supplement to the previously planned cost-saving measures. Covestro’s international subsidiaries will implement individual measures for cost reduction on a country-specific level.
The company has not said what the actual salary cuts will be but said that the reduction increases in percentage terms across all salary levels. The board of management as well as the supervisory board will take a salary cut of 15%, which the company says is a larger cut than that applied to other employees. Covestro employed approximately 17,200 people at the end of 2019.
Covestro says that despite the current cost-saving measures, it continues to drive forward its strategic focus of sustainability and innovation. In particular, the company says it plans to transition to a circular economy in order to eliminate the use of fossil resources to the greatest possible extent. It announced today that it wants to accelerate change to a circular economy to align its entire production and product range as well as all areas in the long term to the circular concept.
Specifically, the company plans to convert its production facilities worldwide to alternative raw materials and renewable energy. In addition, over 20 projects are researching new ways for more and better recycling. The company says that the aim is to become a producer and solution provider as well as innovative recycler. Covestro’s products are to be increasingly tailored for later recycling and aligned even more closely with the UN sustainability goals. In addition, Covestro says it wants to cooperate with partners in all areas of the value creation cycle and also to take advantage of new business opportunities of mutual interest.
Covestro launched a strategic program in 2019 to anchor circularity in all areas of the company in a holistic approach. It is now being implemented and backed up with concrete and measurable goals. The company is focusing on four topics: alternative raw materials; innovative recycling; common solutions; and renewable energies.
As MRC informed earlier, Covestro has closed the sale of its European polycarbonates (PC) sheets business to the Munich-based Serafin Group effective January 2, 2020. This includes key management and sales functions throughout Europe as well as production sites in Belgium and Italy.
According to MRC's ScanPlast report, overall estimated consumption of PC granules totalled 12,600 tonnes in the Russian market in January-February 2020 (excluding imports and exports to/from Belarus), compared to 9,600 tonnes a year earlier. Demand increased by 31%.
Covestro (formerly Bayer MaterialScience) is an independent subgroup within Bayer. It was created as part of the restructuring of Bayer AG from the former business group Bayer Polymers, with certain of its activities being spun off to Lanxess AG. Covestro manufactures and develops materials such as coatings, adhesives and sealants, polycarbonates (CDs, DVDs), polyurethanes (automotive seating, insulation for refrigerating appliances) etc. With 2018 sales of EUR 14.6 billion, Covestro has 30 production sites worldwide and employs approximately 16,800 people (calculated as full-time equivalents) at the end of 2018.
MRC