Covestro’s sustainable future shines amid 2017 mainland sales growth
Covestro, one of the world’s biggest producers of polymers — a group of base chemicals used in many manufacturing industries — said it enjoyed strong sales growth in China last year, amid the country’s wider efforts to promote sustainable development.
The high-tech materials developer and supplier, which has a product portfolio that includes polyurethane, polycarbonates and coating, adhesives and specialties, saw revenue in China hit 3 billion euros ($3.69 billion) in 2017, accounting for 22 percent of its total global sales.
“We are for the first time the single biggest (contributing) country in our company”, said Bjoern Skogum, president of Covestro China. “When I was working here between 2004 and 2006, China was only 10 percent.”
Last year Covestro’s core volumes in China increased 8 percent year-on-year, compared with 6 percent in Germany and flat volume in the Hurricane-Harvey-affected United States.
Promoting sustainability
Covestro’s efforts in promoting sustainability have been seen as one key factor contributing to the company’s success in China, as they will be in the future.
“We have chosen the right way for the future. The first thing is innovation,” Skogum said.
“We innovate in the right areas. The second thing is we are innovating sustainable solutions. I think these make Covestro different from other companies.”
Nowadays, Covestro’s hightech products are widely used in high-growth areas such as the automotive, transportation, wind power and furniture coating sectors in China.
The company also aims to dedicate four-fifths of its research and development projects to developing sustainability solutions to address the 17 Sustainable Development Goals of the United Nations, and makes daily efforts towards those goals in China.
In the education sector, it partnered with Shanghai’s Tongji University to establish the Covestro-Tongji Innovation Academy in May last year, to promote sustainable innovation in the transportation and construction fields. Skogum revealed that the partnership with Tongji University has already generated some technical results.
Covestro’s Polymer Research and Development Center in Shanghai, one of three R&D hubs for the company worldwide, has developed the world’s first polyurethane-based wind blade, which has higher power generation efficiency and lower costs than other variants.
The company has also actively engaged in the upgrade of old residential communities in Shanghai over the past few years to help householders reduce their energy consumption.
In the upcoming years, Covestro plans to offer an extensive portfolio of materials solutions to industries that can provide high leverage to China’s sustainable development, for example in the construction, automotive, electrical and electronics, furniture and medical sectors. These will enable it to grasp more business opportunities.
Digital journey
Covestro said it considered digitalization as one of the key drivers of future innovation and vowed to take advantage of the rapidly developing digital trends. The digitalization move will not only allow Covestro to enhance its operating processes but will also improve the customer experience and develop new business models, according to the company.
Over the next few weeks, Covestro will launch an online marketplace to simplify customers’ access to basic products and connect customers with Covestro and other providers.
By the end of 2019, new digital business models such as a digital marketplace are expected to generate cumulative sales of up to 1 billion euros, according to Markus Steilemann, Covestro’s chief commercial officer, who has been appointed the next CEO of the company.
“With our comprehensive program, we are taking advantage of the opportunities that digitalization presents, making it a key focus of our company. As part of this focus, we will set new standards of collaboration with our customers,” Steilemann said.
China, known for its rapidly expanding online businesses and exponential growth in online shoppers, will play an irreplaceable role in supporting Covestro’s digitalization in the future, according to Skogum.
“If you look at China’s ability to adopt new trends, especially in the digital area, China is in the forefront,” he added.
“China has a population which is open to change and is already very digital. Therefore, I am confident to say that I am very much convinced that China will make a huge contribution to our journey to go digital.”
Dynamic group has great expectations for the year ahead