Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Transitioning Covestro Builds Its Brand

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Transitioning Covestro Builds Its Brand

Article excerpt

In June 2015, a few months before German drug giant Bayer spun out its plastics and chemicals division as an independent subsidiary, it announced that the company formerly known as Bayer Material Science would be called Covestro.

When the news reached its North American headquarters in Robinson, initial reaction to the name was - to say the least - underwhelming.

"It wasn't as catchy as we thought" it might be, said Jerry MacCleary, president of Covestro's North American region, which employs about 3,000 people, including 750 at its campus along the Parkway West.

"Then we had to figure out how to pronounce it," he said adding that some longtime employees worried about an issue that frequently causes confusion about the Bayer name: It's pronounced differently in the English and German languages.

Getting the name right was just one of the details Mr. MacCleary and his senior staff faced in transitioning their organization from Bayer MaterialScience to Covestro after it was spun out through a public offering on the Frankfurt Stock Exchange last Sept. 1.

Bayer decided to separate Covestro - which makes coatings and raw materials such as plastic polycarbonates used in electronics, insulation, car parts, and other industrial and consumer products - in order to focus more on its high profit-generating drugs and pharmaceuticals as well as its agricultural chemicals business, which recently has been trying to buy rival Monsanto.

Although Covestro comprises mainly people who worked for Bayer, and Bayer still holds a 64 percent ownership stake, Mr. MacCleary said there was a pressing need to carve out a new identity in communities in which the company operates, and to calm anxieties among employees about how their day-to-day work lives might change.

A year after the public offering, Mr. MacCleary believes the launch has been a success.

"It's been one of those years that you look back and say it was a lot of work, but it was worth it," he said in his light-filled office that sits just above the hillside along the Parkway West where workers were pushing to complete installation of a new Covestro sign in time for Thursday's one-year anniversary celebration.

It has helped that Covestro has reported strong financial results.

Global sales for 2015 - including the first eight months when it was fully owned by Bayer - totaled 12.1 billion euros ($13.2 billion) including 3.4 billion euros in revenues generated in North America.

Analysts expect 2016 earnings before interest, taxes, depreciation and amortization will rise by by 3 percent.

His toughest challenge, Mr. MacCleary said, was to hire about 60 mid-level managers to handle corporate functions formerly administered by Bayer such as human resources, finance, taxes, legal services and information technology. …

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