BAYER CALLS FOR RELIABLE SUPPLY OF NATURAL GAS IN NORTH AMERICA

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BAYER CALLS FOR RELIABLE SUPPLY OF NATURAL GAS IN NORTH AMERICA
01 May 2003 - Bayer MaterialScience AG

Bayer Corporation is urging the U.S. Congress and the Administration to lift restrictions on natural gas production in the Gulf of Mexico and the Outer Continental shelf and encourage natural gas supplies from Canada, the corporation announced today.

Unprecedented leaps in natural gas prices ushered in by diminishing supplies and rising demand threaten the U.S. chemical industry and economy, Bayer maintains.

'The U.S. chemical industry uses 11 percent of all natural gas in the U.S. as feedstock material and to run its plants,' explained Attila Molnar, Bayer Corporation President and Chief Executive Officer. 'Yet at the same time, demand for this clean-burning fuel is rising and supply is diminishing, leading to uncertainty, shortages and soaring natural gas prices,' he said.

'We need a reliable supply of natural gas at globally competitive prices. Natural gas prices should presently be between $2.50 and $3.50 per million cubic feet to keep the U.S. chemical industry competitive in worldwide markets,' Molnar said. 'This year, it has sold for as much as $30 per million cubic feet--six times the price of just three years ago. According to American Chemistry Council calculations, that's equivalent to paying $16 for a gallon of milk, more than $9 for a gallon of gas or nearly $13 for a pound of beef,' he added.

Bayer is also calling for legislation that would promote conservation incentives for utilities and government agencies, incentives to use cleaner and more energy-efficient co-generation facilities, and increased use of renewable energy sources.

To improve increasingly unsatisfactory profit margins, Bayer is continually exploring energy conservation at its plants, ways to increase supply chain efficiencies and new pricing strategies, according to Ian Paterson, Head of the Bayer Polymers Americas Region and President and CEO of Bayer Polymers LLC.

'In the polymers industry, the clear trend is toward commodities-- products that are manufactured in large quantities and primarily sold on the basis of price and supply chain excellence,' Paterson said. 'To assure long-term competitiveness for American industry in general and the polymers industry in particular, the U.S. urgently needs a robust energy policy -- one that encourages the best use of energy resources and strengthens the energy infrastructure through expansion of North America's vast natural gas resources,' he said.

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About: Bayer MaterialScience AG
Bayer Corporation, headquartered in Pittsburgh, is part of the worldwide Bayer Group, an international health care, nutrition and innovative materials group based in Leverkusen, Germany. Bayer employs 23,300 in North America with net North American sales of 8.8 billion euros in 2003. Bayer’s three operating business areas – HealthCare, CropScience and MaterialScience, improve people’s lives through a broad range of essential products that help diagnose and treat diseases, protect crops and advance automobile safety and durability.

Bayer MaterialScience AG is one of the world's largest producers of polymers and high-performance plastics. The main customers for Its innovative developments in coatings, adhesives, insulating materials and sealants, polycarbonates and polyurethanes are the automotive and construction industries, the electrical/electronics segment and manufacturers of sports and leisure goods, packaging, and medical devices.

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