Tom Branna, Editorial Director 05.02.16
Wacker isn’t the biggest silicone manufacturer in the world, but executives maintain that their company is the best-positioned supplier to grow in key markets, roll out innovative products and keep expanding due to its financial strength. Wacker provided an update on its results, activities and plans for the future during a recent two-day press event that took reporters from its offices in Munich to its facility in Burghausen, Germany.
Last year, corporate sales rose nearly 10% to €5.3 billion ($6.0 billion at current exchange rates), driven by higher volumes as well as a strong US dollar. Net income increased 24% to €242 million.
“Once again, last year highlighted the above-average growth potential of our chemical activities,” explained Rudolf Staudigl, president and CEO. “In contrast to the German chemical industry as a whole, we actually grew substantially.”
According to Staudigl, overall German chemical sales were flat at €190 billion ($216.3 billion). In contrast, Wacker’s sales were higher in all five divisions. More specifically, sales within the silicone division rose 12% to more than €1.9 billion ($2.1 billion).
“Growing demand in emerging-market economies is fueled by advanced personal care products which contain silicones,” he added.
To keep momentum growing, Wacker increased investments 46% last year to $960 million. Staudigl noted that more than 10% of chemical sales come from products that did not exist 10 years ago, adding that Wacker’s chemical business is a key component of the company’s success.
“In just the past 10 years we have more than doubled our chemical sales.”
At the same time, the company continues to make good gains through its 12 year-old cost-efficiency program. In 2015, the program saved Wacker more than $180 million; primarily through lower energy consumption and higher output.
Gains in the Americas
Staudigl noted that much of Wacker’s growth comes from beyond Germany. Last year, 66% of sales were derived outside of Europe.
Asia, for example, accounted for 43% of sales at $2.6 billion, a year-over-year increase of nearly 11%. China represented more than half of sales in the region, but Staudigl noted that India is becoming increasingly important as sales rose 29% to about $160 million.
“Personal care products employing our silicones are experiencing strong demand there,” he pointed out.
In Europe (excluding Germany) 2015 sales rose 6% to $1.3 billion and sales in Germany were up 3% to $780 million.
Helped along by positive exchange rates, sales in the Americas soared 17% to more than $1 billion. According to company estimates, the Americas generated more than $1 trillion in chemical sales in 2014. Chemical production in the Americas grew 3.6% a year during the previous five years and during that time, investment in the region’s chemical industry rose even faster at nearly 10%. Wacker estimates that the Americas account for about 16% of global chemical investment and in 2014 (the latest year figures are available), chemical investments in the Americas exceeded those in Europe.
Christian Hartel, a member of the company’s executive board, gave reporters an update on Wacker’s activities in the Americas. He noted that the market is dominated by two economies; the US in the north and Brazil in the south.
“Although South America currently faces stagnation, economic prospects are good in the medium- to long-term,” Hartel explained.
According to Wacker’s estimates, South American personal care sales totaled $43 billion in 2014. Hair accounted for 29% of sales, followed by skin care (19%), deodorants (17%), color cosmetics (14%), bath and shower (10%), baby care (6%), and sun care (5%). Wacker is expanding in several South American countries, such as Chile, Peru and Uruguay, but Hartel noted that Brazil is the super power in the region and is the primary focus of the company’s activities.
“Brazil is the most dynamic market for personal care products and cosmetics in the world,” he told attendees.
Wacker Química do Brasil Ltda was established as a subsidiary in 1977, and the cosmetics industry is one of its primary customers.
“Brazil is one of the largest and fastest-growing markets for personal care products and cosmetics,” Hartel noted. “Based on per capita income, Brazilians spend more on their appearance than anyone else; this is especially true when it comes to shampoos and conditioners.”
Wacker opened a technical center in Brazil in 2003. A Wacker Academy was opened in 2010. Here, the company provides in-house and on-site training for its customers. In 2013, the technical center was expanded. According to Hartel, Wacker chemists work closely with domestic marketers to develop unique solutions for consumers. One of the newest is Belsil PF 200, a self-emulsifying phenyl silicone fluid for water-based formulas that is said to give hair a pleasantly soft feel. Due to its high refractive index, it enhances the shine of water-based shampoos and styling products, according to the company.
New Formulation Ideas
Norbert Winkhofer of Wacker Silicones explained that the global silicone market was worth about $13 billion in 2015, with consumer care accounting for 15% of sales, making it a distant No. 2 to advanced processing additives (32%), but ahead of well-known segments like construction (14%) and coatings (10%).
And while silicones are best known for the aesthetic properties that they impart on skin and hair, they have other applications, too.
“Silicones make actives much more efficient,” Winkhofer explained.
For example, low viscous silicones and silicone waxes such as Belsil CDM 3526VP help spread organic absorbers and increase SPF values in finished formulations. Silicone emulsifiers such as Belsil WO 5000 improve coverage of mineral UV blockers such as titanium dioxide and zinc oxide. Finally, silicone resins and silicone resin elastomer gels such as Belsil REG 102 can form a film on the skin providing a barrier effect against particulate air pollution, according to Winkhofer.
He pointed out that silicone compounds help to minimize oxidative stress, while antioxidants prevent reactive species from harming the skin.
With that introduction, Winkhofer turned the microphone over to Simone Trautz, Wacker Biosolutions, who provided details on HTEssence hydroxytyrosol, the newest personal care ingredient from Wacker. It serves as antioxidant and skin lightener for personal care formulations.
New & Nature-Identical
Trautz explained that hydroxytyrosol is a phytochemical found in olives and olive leaves. The amphiphilic molecule has a slightly bitter taste, brownish color and moldy-smell—not exactly attributes that cosmetic chemists find endearing! But by synthesizing the molecule, Wacker created HTEssence, a nature-identical material with no byproducts that is microbiologically safe. It has a higher, consistent amount of active ingredient and its controlled production ensures supply security. Perhaps best of all, the final material is a white, odorless powder or liquid that is easy to process, according to Trautz.
Wacker researchers maintain that HTEssence is a very potent and fast-working antioxidant with anti-aging effects on the skin. In one study, the reduction potential of HTEssence was shown to be 1.5 times higher than concentrated vitamin C and four times higher than concentrated vitamin E. HTEssence was also found to enhance the skin’s antioxidative defense system that is stressed by free radicals and UV light.
“It diffuses more deeply into skin,” Trautz maintained. “It forms a very potent shield that enhances skin’s ability to protect itself.”
According to Wacker data, HTEssence is four times more effective than vitamin E and enhances antioxidative protection two times more effectively after UV radiation.
In a skin lightening study, 60 female volunteers applied lotions containing 1%, 0.1% or 0% of HTEssence two times a day for 42. The luminosity and ITA (topological angle) rose 1% and 6% in the testing period. This proves that HTEssence leads to lighter and less pigmented skin after 42 days compared to the control group, according to Wacker.
Furthermore, sensitivity tests showed no irritation.
“We are testing HTEssence now versus hydroquinone, but we haveno data yet,” added Trautz.
But the material isn’t just for skin. Wacker reseachers maintain that HTEssence protects hair from UV-induced damage and discoloration better than other known antioxidants such as vitamin C and green tea extract. Moreover, when combined with Belsil silicone emulsions, HTEssence proved to be a highly-efficient UV-protectant for color-treated hair, according to the company’s research.
Novel ingredients aren’t the only thing that’s new at Wacker. Last month, the company appointed Dr. Robert Gnann as president of Wacker Silicones. He succeeds Hartel, who was appointed to the Wacker Group’s executive board in early November 2015. Prior to this appointment, Gnann was with Momentive Performance Materials, where he headed the chemical company’s elastomer and European activities.
The players may change, but the game, according to Staudigl, remains the same.
“In 2016, we want to achieve slight growth in sales, building on the upward trend from 2015,” he told reporters. “This growth will be driven especially by our strong chemical business.”
Last year, corporate sales rose nearly 10% to €5.3 billion ($6.0 billion at current exchange rates), driven by higher volumes as well as a strong US dollar. Net income increased 24% to €242 million.
“Once again, last year highlighted the above-average growth potential of our chemical activities,” explained Rudolf Staudigl, president and CEO. “In contrast to the German chemical industry as a whole, we actually grew substantially.”
According to Staudigl, overall German chemical sales were flat at €190 billion ($216.3 billion). In contrast, Wacker’s sales were higher in all five divisions. More specifically, sales within the silicone division rose 12% to more than €1.9 billion ($2.1 billion).
“Growing demand in emerging-market economies is fueled by advanced personal care products which contain silicones,” he added.
To keep momentum growing, Wacker increased investments 46% last year to $960 million. Staudigl noted that more than 10% of chemical sales come from products that did not exist 10 years ago, adding that Wacker’s chemical business is a key component of the company’s success.
“In just the past 10 years we have more than doubled our chemical sales.”
At the same time, the company continues to make good gains through its 12 year-old cost-efficiency program. In 2015, the program saved Wacker more than $180 million; primarily through lower energy consumption and higher output.
Gains in the Americas
Staudigl noted that much of Wacker’s growth comes from beyond Germany. Last year, 66% of sales were derived outside of Europe.
Asia, for example, accounted for 43% of sales at $2.6 billion, a year-over-year increase of nearly 11%. China represented more than half of sales in the region, but Staudigl noted that India is becoming increasingly important as sales rose 29% to about $160 million.
“Personal care products employing our silicones are experiencing strong demand there,” he pointed out.
In Europe (excluding Germany) 2015 sales rose 6% to $1.3 billion and sales in Germany were up 3% to $780 million.
Helped along by positive exchange rates, sales in the Americas soared 17% to more than $1 billion. According to company estimates, the Americas generated more than $1 trillion in chemical sales in 2014. Chemical production in the Americas grew 3.6% a year during the previous five years and during that time, investment in the region’s chemical industry rose even faster at nearly 10%. Wacker estimates that the Americas account for about 16% of global chemical investment and in 2014 (the latest year figures are available), chemical investments in the Americas exceeded those in Europe.
Christian Hartel, a member of the company’s executive board, gave reporters an update on Wacker’s activities in the Americas. He noted that the market is dominated by two economies; the US in the north and Brazil in the south.
“Although South America currently faces stagnation, economic prospects are good in the medium- to long-term,” Hartel explained.
According to Wacker’s estimates, South American personal care sales totaled $43 billion in 2014. Hair accounted for 29% of sales, followed by skin care (19%), deodorants (17%), color cosmetics (14%), bath and shower (10%), baby care (6%), and sun care (5%). Wacker is expanding in several South American countries, such as Chile, Peru and Uruguay, but Hartel noted that Brazil is the super power in the region and is the primary focus of the company’s activities.
“Brazil is the most dynamic market for personal care products and cosmetics in the world,” he told attendees.
Wacker Química do Brasil Ltda was established as a subsidiary in 1977, and the cosmetics industry is one of its primary customers.
“Brazil is one of the largest and fastest-growing markets for personal care products and cosmetics,” Hartel noted. “Based on per capita income, Brazilians spend more on their appearance than anyone else; this is especially true when it comes to shampoos and conditioners.”
Wacker opened a technical center in Brazil in 2003. A Wacker Academy was opened in 2010. Here, the company provides in-house and on-site training for its customers. In 2013, the technical center was expanded. According to Hartel, Wacker chemists work closely with domestic marketers to develop unique solutions for consumers. One of the newest is Belsil PF 200, a self-emulsifying phenyl silicone fluid for water-based formulas that is said to give hair a pleasantly soft feel. Due to its high refractive index, it enhances the shine of water-based shampoos and styling products, according to the company.
New Formulation Ideas
Norbert Winkhofer of Wacker Silicones explained that the global silicone market was worth about $13 billion in 2015, with consumer care accounting for 15% of sales, making it a distant No. 2 to advanced processing additives (32%), but ahead of well-known segments like construction (14%) and coatings (10%).
And while silicones are best known for the aesthetic properties that they impart on skin and hair, they have other applications, too.
“Silicones make actives much more efficient,” Winkhofer explained.
For example, low viscous silicones and silicone waxes such as Belsil CDM 3526VP help spread organic absorbers and increase SPF values in finished formulations. Silicone emulsifiers such as Belsil WO 5000 improve coverage of mineral UV blockers such as titanium dioxide and zinc oxide. Finally, silicone resins and silicone resin elastomer gels such as Belsil REG 102 can form a film on the skin providing a barrier effect against particulate air pollution, according to Winkhofer.
He pointed out that silicone compounds help to minimize oxidative stress, while antioxidants prevent reactive species from harming the skin.
With that introduction, Winkhofer turned the microphone over to Simone Trautz, Wacker Biosolutions, who provided details on HTEssence hydroxytyrosol, the newest personal care ingredient from Wacker. It serves as antioxidant and skin lightener for personal care formulations.
New & Nature-Identical
Trautz explained that hydroxytyrosol is a phytochemical found in olives and olive leaves. The amphiphilic molecule has a slightly bitter taste, brownish color and moldy-smell—not exactly attributes that cosmetic chemists find endearing! But by synthesizing the molecule, Wacker created HTEssence, a nature-identical material with no byproducts that is microbiologically safe. It has a higher, consistent amount of active ingredient and its controlled production ensures supply security. Perhaps best of all, the final material is a white, odorless powder or liquid that is easy to process, according to Trautz.
Wacker researchers maintain that HTEssence is a very potent and fast-working antioxidant with anti-aging effects on the skin. In one study, the reduction potential of HTEssence was shown to be 1.5 times higher than concentrated vitamin C and four times higher than concentrated vitamin E. HTEssence was also found to enhance the skin’s antioxidative defense system that is stressed by free radicals and UV light.
“It diffuses more deeply into skin,” Trautz maintained. “It forms a very potent shield that enhances skin’s ability to protect itself.”
According to Wacker data, HTEssence is four times more effective than vitamin E and enhances antioxidative protection two times more effectively after UV radiation.
In a skin lightening study, 60 female volunteers applied lotions containing 1%, 0.1% or 0% of HTEssence two times a day for 42. The luminosity and ITA (topological angle) rose 1% and 6% in the testing period. This proves that HTEssence leads to lighter and less pigmented skin after 42 days compared to the control group, according to Wacker.
Furthermore, sensitivity tests showed no irritation.
“We are testing HTEssence now versus hydroquinone, but we haveno data yet,” added Trautz.
But the material isn’t just for skin. Wacker reseachers maintain that HTEssence protects hair from UV-induced damage and discoloration better than other known antioxidants such as vitamin C and green tea extract. Moreover, when combined with Belsil silicone emulsions, HTEssence proved to be a highly-efficient UV-protectant for color-treated hair, according to the company’s research.
Novel ingredients aren’t the only thing that’s new at Wacker. Last month, the company appointed Dr. Robert Gnann as president of Wacker Silicones. He succeeds Hartel, who was appointed to the Wacker Group’s executive board in early November 2015. Prior to this appointment, Gnann was with Momentive Performance Materials, where he headed the chemical company’s elastomer and European activities.
The players may change, but the game, according to Staudigl, remains the same.
“In 2016, we want to achieve slight growth in sales, building on the upward trend from 2015,” he told reporters. “This growth will be driven especially by our strong chemical business.”