Innovation is a core element of Covestro’s strategy and is part of our identity. Our understanding of innovation is broadly defined: We do not rely on traditional research and development alone, but rather also on the great potential for creativity throughout the entire company. We encourage all employees to promote innovation at Covestro.
In order to maintain and reinforce our position in the global arena, we work tirelessly at all levels to develop new products, improve established ones, and optimize manufacturing and processing procedures. Application areas, business models and business processes are also subject to ongoing review. We draw on decades of experience and demonstrable success in these endeavors.
By managing innovation systematically throughout the Group, we ensure that our ongoing and planned activities and our project pipeline always satisfy the needs of our customers as well as user and consumer industries. Covestro uses a wide variety of tools to achieve this: For example, we use a standardized method to assess every research and development project and incorporate the resulting findings into ongoing and future projects. The global, digital platform idea.lounge is available for discussing and working on ideas from all parts of the company. Our company system for submitting suggestions, which is used to manage and track suggestions for improvement, was overhauled from the ground up; the new digital platform has been available to employees in Germany since June 2019.
At Innovation Celebrations, we recognize employee projects from around the world that reflect our broad understanding of innovation. The awards serve to recognize innovative ideas for products and applications, production and production processes, business models and commercialization, internal business processes, as well as patents and intellectual property.
We seek to align our research and development (R&D) portfolio with the UN Sustainable Development Goals (SDGs) and by 2025 aim to have 80% of project expenditures for research and development go toward areas that contribute to reaching these goals. To this end, we implemented a Covestro-wide assessment process for existing and new innovation projects that will be applied to the entire R&D project pipeline by 2021.
In fiscal 2019, our R&D expenditure amounted to €266 million (previous year: €276 million). As of December 31, 2019, 1,217 employees* worldwide (previous year: 1,123) worked in R&D, most of them at the three major R&D centers in Leverkusen (Germany), Pittsburgh (United States), and Shanghai (China).
*The number of employees on either permanent or temporary contracts refers to full-time equivalents (FTE). Part-time employees are included on a pro-rated basis in line with their contractual working hours.
Use of digital technologies
Covestro is committed to pursuing digitalization along with the associated new opportunities for the entire chemical and plastic value chain. Covestro utilizes the opportunities arising from digitalization with a comprehensive strategic program and primarily the intelligent use of data, thus setting new standards in cooperation with customers. We set up a senior-level Digital Governance Body to manage the Covestro-wide portfolio of digitalization projects. This decision-making body will directly implement the strategic program in a target-oriented way. We increasingly anchor digital technologies and work methods in production, along the supply chain, in research and development, in administrative functions and at all points of contact with customers as well as for developing new business models. The focus is on the specific benefit for our customers. In Production and Technology, Covestro conducts a program called “OSI 2020” for the digitalization of technical, operational and maintenance-related activities.
Covestro recognizes digitalization as a comprehensive ongoing development that includes various priorities and advances at different speeds. We have already used data analysis for a number of years for production processes and continually invest in employees and infrastructure to systematically promote digitalization – thereby improving the efficiency of work and production processes using modern data processing and the intelligent interconnection of systems. A key element of the digitalization strategy was launched when the Covestro Solution Center, a forward-looking portal for our products, went online. This includes new, digital channels of communication with our customers. We are additionally working on the vision and implementation of a comprehensive, customer-centered effort to digitize the entire supply chain.
In 2019, we built on our in-house developed digital trading platform Asellion to launch the Covestro Direct Store, which customers can visit to purchase our standard products. Selected business entities have already entirely or partially shifted their sales to the platform, which is now integrated into the SAP processing system. Meanwhile, we are cooperating closely with customers in other industries on a global scale. The goal of this collaboration is to implement the customers’ requests with regard to the design and functionality of our digital sales channels.
In this connection, Covestro is also continuing to ramp up the continuing digitalization of research and development. Key initiatives here are the installation of a supercomputer at the Leverkusen site and the establishment of a company-wide data analysis platform in R&D.
Strategic partnerships and collaborations
To remain innovative, Covestro not only closely cooperates with its customers around the world, it also collaborates with partners from academia and industry under the banner of open innovation, which is of great strategic importance for the company. Bilateral cooperations and collaboration in large, publicly funded consortiums characterize the partnerships with research facilities and universities as well as with companies along the value chain.
Covestro maintains long-standing and strategic partnerships with various universities. This includes cooperating with renowned partners throughout the world, such as RWTH Aachen University (Germany), Tongji University in Shanghai (China), and Carnegie Mellon University in Pittsburgh (United States).
On the industrial side, we are working with start-up companies and established partners that support us in our efforts to develop alternative, non-fossil resources and biobased processes. A prerequisite for making biobased raw materials usable is their direct contribution to resource optimization compared to traditional processes. In 2019, we therefore acquired an equity investment in the Erlangen-based German start-up Hydrogenious LOHC Technologies GmbH in an effort to actively promote the development of an international infrastructure for hydrogen as an alternative source of energy.
Our innovation project aimed at manufacturing biobased aniline is another example of this. We are now able to manufacture the basic chemical aniline, which is important for Covestro, on the pilot plant scale from biomass, rather than following the traditional method using benzene, a raw material based on crude oil. This procedure is the result of cooperation between University of Stuttgart (Germany), the CAT Catalytic Center at RWTH Aachen University (Germany), and Bayer AG, Leverkusen (Germany).
In addition to making alternative biobased raw materials usable in order to improve resource efficiency and expanding the CO2 technology platform to close the carbon cycles, electrochemical processes represent a good starting point for visionary, circular economy solutions aimed at the energy-efficient manufacturing of basic chemicals. In pursuit of this goal, Covestro collaborated with RWTH Aachen University (Germany) and the Jülich Research Center (Germany) to establish the ELECTRA industrial electrochemical competence center.
Alliance Management, a central unit at Covestro, provides support throughout the Group in planning and implementing cooperations and networks and for positioning the issues of innovation and sustainability at the state, federal and European policy levels.
Innovation in the individual segments
In the Polyurethanes (PUR) segment, we are continually working on innovating polyurethane industry products with newly developed materials and process improvements throughout their entire life cycle – particularly core applications comprising rigid and flexible polyurethane foam, and composite materials. Our customers in the household appliances, furniture and automotive industries along with many other sectors can rely on our modern technologies and the highly motivated experts in our global network for developing their applications. The large number of new patent applications for our innovative technologies underscores Covestro’s leadership role in the collaboration with other companies in the polyurethane industry.
Furthermore, we develop sustainable, circular approaches to flexible foam applications by working with industrial and scientific partners to continually improve the recycling of flexible polyurethane foam. This represents an important step toward turning polyurethane-based products into potential sources of raw materials for future production. An example of putting this into practice is our participation in the pan-European PUReSmart research project, which involves nine companies and academic institutions from six countries.
Covestro is also systematically conducting research in the PUR segment to determine how CO2 can be used intelligently as an alternative raw material to crude oil. Covestro has developed a new type of polyol for use as a component in flexible polyurethane foam that is manufactured on an industrial scale and contains as much as 20% CO2. Applications including mattresses and materials for sports flooring containing the product sold under the brand name cardyon® are already on the market.
Furthermore, Covestro is working to expand the technology platform for the future production of molecules and products using CO2 such as elastic textile fibers. One application in the textile industry is nearly ready for market launch. Our achievements in research into the CO2 technology and its broad application potential have attracted notice even outside the chemical industry: The innovation made it to the finals of the 2019 German Future Prize awarded annually by the President of Germany.
In fiscal 2019, we also continued to develop and refine flame-retardant insulation materials for the construction industry and further optimize insulation for the refrigeration appliance sector. By continually improving the insulating properties of refrigerators and refrigerated containers, our materials contribute to sustainably optimizing the refrigeration chain in the global food supply.
Moreover, with the help of new, digital technologies, we also significantly increased productivity in the manufacturing of insulating panels and elements, for instance in designing fixed plastic rakes, at our customers in the past fiscal year. Using digital technologies also conserved resources in research and development. We have had initial success in calculating catalysts for new raw materials and their processing.
In terms of state-of-the-art composite elements for automotive industry applications, our improved solutions for filling hollow spaces helped cut noise in the passenger compartment of vehicles.
Our development of novel polyurethane products for infusion technologies is another example of our innovation performance in the past fiscal year. For the first time, Covestro delivered polyurethane raw materials to China for the construction of wind turbines. The polyurethane resin developed and produced by Covestro was used to manufacture rotor blades for wind turbines, which were installed in a wind farm in eastern China.
In the Polycarbonates segment (PCS), we are developing products including new polycarbonate-based material solutions and customized products tailored to meet increasingly complex customer requirements in the mobility, health and electronics/LED technologies areas. The key here is to lower the weight of the components and final products, improve their energy efficiency and safety, and realize completely new design possibilities.
The trend toward modern and integrated light elements – made possible by LED technology – is a theme that can be traced through all industries, but particularly in the field of mobility. Due to their transparency and thermal stability, polycarbonates are the ideal material for innovative solutions.
In the automotive sector, the growing number of driving assistance systems, sensors and camera systems can be seamlessly integrated with our sensor-transparent materials under the Makrolon® brand. We also support the new requirements for electric drive systems by developing new flame-retardant products, e.g. for ultra-light honeycomb crash absorption structures for protecting batteries, vehicles and passengers. At K 2019, the world’s leading plastics trade fair, we showcased a comprehensive vehicle passenger compartment concept featuring innovative and functional materials solutions addressing current mobility trends such as autonomous driving, electric drives and car sharing.
New applications for polycarbonates and polycarbonate blends for use in the global expansion of the 5G technology were also presented at the K 2019 plastics trade fair. Seamless integration of an expanded network of antennae and base stations into the cityscapes of the future is planned to increase public acceptance of these systems. Covestro is working with university students at the Umeå Institute of Design in Umeå (Sweden) and with Deutsche Telekom AG, Bonn (Germany), to this end. In a pilot project, the partners tested creative design concepts for small 5G antennae and base stations, including adaptation of their color and surface texture. Covestro has also developed a multi-layer film solution made of polycarbonate and polymethyl methacrylate (PMMA) for use in manufacturing 5G-ready smartphones. Thanks to the innovation and a new manufacturing process, the back of the smartphone appears glass-like without being fragile.
In 2019, too, we provided consistent support in the lighting market for the growing trend toward LED technology. Our newly developed products combine outstanding optical properties with exceptional longevity. In this way, Covestro supports the trend toward maintenance-free, efficient LED lighting.
Our innovations in the field of health applications are also worth noting. We designed a new clear-transparent material that meets the exacting requirements for manufacturing diagnostic ampoules, thus improving occupational safety for medical technology staff when conducting time-sensitive blood analyses. In addition, our newly developed carbon-fiber reinforced Makrolon® allows us to manufacture radiolucent disposable surgery instruments more efficiently.
For the electronics industry, our new product portfolio meets customers’ stringent standards concerning optical and high-gloss display properties. With the new materials, it is now possible to realize larger displays with three-dimensional design. We have also made consistent advancements in the field of high-performance materials. At our Markt Bibart site, we commercially produce our continuous fiber-reinforced thermoplastic (CFRTP) composites, thus combining the stiffness and strength of carbon-fiber or fiberglass with the flexibility and efficient processability of thermoplastics. This makes applications lighter, increasingly stable and even more aesthetically pleasing. These composites unlock entirely new design possibilities in key areas such as IT, mobility and consumer products.
Coatings, Adhesives, Specialties
The Coatings, Adhesives, Specialties segment (CAS) serves a large number of specialized industries. Together with our customers and partners, we introduced significant innovations in 2019, focusing on efficiency, sustainability and promoting our specialties.
At the European Coatings Show in Nuremberg (Germany), we introduced a raw material for the first time that increases the efficiency of high-performance coatings with extremely fast curing times. It is already being used commercially by various leading manufacturers, including producers of vehicle repair coatings. Another example is a new generation of automotive production line paints developed by Covestro with a partner consortium of other paint industry companies and leading automobile manufacturers. The new paints are based on Covestro’s technologies and materials. In the construction industry as well, speed plays a role, so the parking garages at the new airport in Beijing (China) were coated with a fast-curing formula developed by Covestro. In addition, Covestro also presented water-based crosslinking agents with very fast curing times for use with wood.
We continually work on improving our portfolio of crosslinking and binding agents, which set new standards in occupational safety and industrial hygiene. For instance, in 2019 we developed additional products whose residual monomer content is again lower, therefore making their application even safer. In 2019, we also continued to improve sustainability by promoting biobased raw materials for manufacturing purposes, which help conserve additional resources and improve the user’s carbon footprint. Examples of this are three Impranil® eco products for textile coating we developed to contain up to 56% renewable raw materials.
An initial plant-based product for cosmetics under the Baycusan® brand was brought to market by Covestro to meet the growing needs of the cosmetics industry, which gravitates toward natural ingredients. Based on our most recent research findings, we are also marketing polyurethane-based film formers with enhanced biodegradability over conventional raw materials to cosmetics companies.
In a joint research project with the Technical University of Denmark (Danmarks Tekniske Universitet, DTU) and partners from the wind energy industry, our CAS segment is developing a raw material for coatings that is suitable for use during extreme weather.
The area of thermoplastic special elastomers is capitalizing on customized solutions for the electronics industry, such as cell phone cases. Intelligent combinations of materials in the area of specialty films have been developed for security cards and medical technologies in close cooperation with our customers. These set new standards and generate above-average growth.
In the field of additive manufacturing, or 3D printing, Covestro is addressing continually growing demands and successfully pursuing the large-scale production of a material that allows customers to conduct 3D printing on an industrial scale.