13.5 Business Development in the Emerging Markets
Sales in the Emerging Markets climbed by 6.1% (Fx adj.) in 2015 to €17,200 million (2014: €15,763 million). We posted encouraging growth rates in Eastern Europe and Latin America. The Emerging Markets’ share of total sales was 37.1% (2014: 38.1%).
HealthCare considerably improved sales in the Emerging Markets by 16.4% (Fx adj.) in 2015, to €7,208 million (2014: €6,336 million). All regions contributed to this increase, with robust currency-adjusted gains in Latin America especially. In Asia, our business in China in particular developed very well. There, we especially benefited from the acquired consumer care businesses alongside the positive development of our pharmaceutical products. The Emerging Markets’ share of total sales of HealthCare was 31.5% (2014: 33.2%).
CropScience improved sales in the Emerging Markets by 4.6% (Fx adj.) in 2015, to €4,836 million (2014: €4,409 million). We posted substantial gains in the Eastern Europe and Africa / Middle East regions. We also expanded business in Asia, while Latin America experienced a slight decline. The Emerging Markets’ share of total CropScience sales in 2015 was 46.6% (2014: 46.4%).
Sales of Covestro in the Emerging Markets declined by 5.7% (Fx adj.) in 2015 to €5,089 million (2014: €4,951 million). Sales in the Asia region remained well below the prior-year level on a currency-adjusted basis, and also declined in Latin America. We expanded sales in the Eastern Europe and Africa / Middle East regions. The Emerging Markets’ share of total sales at Covestro was 42.5% (2014: 42.5%).
We additionally engage in some Emerging Markets through regional economic development projects, as shown by the following examples:
Online annex: 3-13.5-1:limited assurance
CropScience aims to contribute to increased agricultural productivity in regions such as Africa and intends to expand its presence there. Our offerings are tailored to the needs of African farmers and range from integrated crop solutions based on improved seed varieties through modern crop protection technologies and training in good agricultural practice and environmental protection to product safety programs. We also engage locally in public-private partnerships (PPPs) to help increase the income of smallholder farmers through sustainable agriculture. Activities include expanding local value chains and training measures. This contributes to improving the living situation of the local population and enhancing the availability of staple foods in the project countries. In such PPPs, we cooperate with numerous partners including local governments, farmers’ associations and cooperatives, nongovernmental organizations and agricultural input industries. CropScience is currently participating in PPPs associated with the value chains for rice and potatoes in Sub-Saharan Africa, India and Southeast Asia.
Together with representatives of GLOBALG.A.P GLOBALG.A.P is a globally recognized quality assurance system in the agriculture industry that is focused on food safety and good agricultural practice. It employs modular and customer-specific solutions for the certification and inspection of agricultural enterprises and the establishment of training programs. GLOBALG.A.P standards focus on product safety, environmental compatibility and the health, safety and well-being of people and animals. ., one of the world’s leading quality assurance systems, CropScience has continued developing the BayG.A.P. program to provide smallholder farmers in developing countries and Emerging Markets, for example, with access to professional local and global food markets. In 2015, pilot projects were carried out with food chain partners in the Asia / Pacific and Latin America regions. The service program includes an intensive training course in good agricultural practice (G.A.P.), individual cultivation advice and subsequent support in meeting the respective local G.A.P. standard. The farmers can sell certified, high-quality produce at higher prices, thus raising their incomes.
In cooperation with external partners, Covestro is evolving and implementing technical solutions to help low-income people in developing countries and Emerging Markets gain improved access to high-quality, safe and easy-to-build yet affordable housing. These activities currently focus on Asia. The company is mainly contributing its expertise in the field of rigid polyurethane foam for the construction industry.
3 For reporting purposes we have defined the Emerging Markets as Asia (excluding Japan), Latin America, Eastern Europe, Africa and the Middle East.