Covestro Group at a Glance – Company Profile
Purchasing at Covestro is handled by the corporate Group Procurement function. Group Procurement works with the business entities and hubs of the corporate Supply Chain & Logistics function to ensure the timely global supply of goods and services to all divisions of the company on the best possible terms and conditions. This ensures that the Group’s high quality standards are met. Furthermore, Group Procurement is responsible for ensuring that Covestro’s ethical and environmental principles are upheld throughout the entire procurement process. The basic tenets of our procurement policy are set forth in a directive that is binding on all employees throughout the Covestro Group.
The objective is to generate a competitive advantage for Covestro and make a decisive contribution to overall value. In doing so, Covestro is guided by four strategic principles: reliability, sustainability, cost transformation, and innovation. By purchasing renewable energy or alternative raw materials, Group Procurement contributes to realizing Covestro’s vision of becoming fully circular. In addition, the corporate Group Procurement function promotes the digitalization of purchasing processes and systems in the interest of improving the efficiency and effectiveness of the procurement process for Covestro and its suppliers.
In fiscal 2021, goods and services were procured from some 13,000 suppliers (previous year: some 13,000) in 66 countries (previous year: 67) for €11.3 billion (previous year: €7.9 billion).* Distribution of purchasing volumes was balanced across the regions.
The most important raw materials for our products are petrochemical substances such as phenol, benzene, propylene/propylene oxide, toluene, and acetone – which collectively account for 35%* of our purchasing value (previous year: 33%). Moreover, the operation of our production facilities requires large amounts of energy, which we primarily procure from external sources in the form of electricity and steam. We endeavor to procure raw materials essential for operations which are difficult for Covestro to obtain from external supply sources from within the Group or through joint ventures. To name just two examples: Covestro produces part of its chlorine in-house and procures propylene oxide through a joint venture. Operations, logistics, and investment projects require technical goods and services in addition to raw materials and energy. These activities are consolidated by the corporate Group Procurement and Supply Chain & Logistics functions to generate a contribution in line with the Group’s strategy. We also regularly monitor the sustainability and quality of our suppliers and ensure that they comply with internal and external standards.
* Due to the still ongoing systems integration of the acquired RFM business, the RFM-related purchasing volumes were only partially included for fiscal 2021.