“Unlike the German chemical industry as a whole, we had generated further growth,” noted Rudolf Staudigl, president and chief executive officer, Wacker Chemie AG. “The industry (in contrast) reported sales of €183 billion euros, down 3% amid lower prices.”
More specifically, sales at Wacker Silicones reached €2 billion for the first time, helped along by a 3% gain in volume partially offset by lower prices. Staudigl credited the volume increase to sales within personal care, as well as energy and electronic applications.
“Wacker is in very good shape—especially our chemical divisions,” observed Staudigl. “Our chemical business has expanded noticeably in recent years and, above all, has boosted its earnings.”
He noted that chemicals now account for over 60% of group sales and adjusted EBITDA. In comparison, in 2010, chemicals accounted for 53% of sales and 32% of EBITDA.
In March, Wacker held a press conference to report its results and provide an update on its activities during the past year. Members of the press also had the chance to tour its principle production site in Burghausen, Germany, where Wacker employs 10,000 and manufactures thousands of different products in some 250 facilities. Wacker executives gave attendees a look at some of its latest advances in diverse fields including consumer care defoamers and graffiti protection.
Foam; when it’s on your head during shampooing, that’s a good thing. But when it’s bubbling out of your washing machine or worse, requiring rinse after rinse to get hand-washed clothes clean, that’s a headache! Multiple rinsing is especially a chore in emerging markets such as Latin America, Africa and Asia, where most consumers don’t have access to a washing machine.
Wacker says it has a remedy for foam problems with its new line of sustainable antifoam agents. The company’s new delayed defoamer technology builds on modified amino silicone fluids. These delayed defoamers reduce the number of rinse cycles to one or two, instead of three or four—a difference that saves time and reduces water consumption by 50%.
“This technology can save up to 20 liters of water per wash load,” insisted Klaus Pohmer, director of global business and process development at the performance silicones business unit.
The delayed defoamer hand laundry detergents were launched in Africa last year and are currently rolling out in select Asian countries with plans for a launch in South America as well, according to Pohmer.
Keep It Clean
Municipalities around the world spend billions of dollars every year in an attempt to rid their cities of graffiti. The US alone spends $12 billion a year, according to the Department of Justice. Elsewhere, the Association of Germany Cities puts the annual cost of graffiti removal at €200 million, although property owners estimate the cost to be twice that much.
Until now, noted Wacker’s Marianne Kreuzpointner, graffiti protection technologies have been of three systems:
- Temporary (polysaccharides and waxes);
- Semi-Permanent (wax and silicone blends); and
- Permanent (polyurethane, acrylates and RTV 1 silicones).
All have their merits, but they have their shortcomings, too.
Silres BS 710 is Wacker’s new solution for long-lasting, anti-graffiti coatings. The clear silicone rubber formulation cures to form a silicone elastomer at room temperature and upon exposure to moisture. The material debuted at the European Coating Show last month.
“Silres BS 710 can be used as a topcoat or it can be pigmented as a coating on its own,” explained Kreuzpointner, marketing manager, construction chemicals, Wacker Silicones.
After application, graffiti is easily removed with water. Furthermore, Silres BS 710 contains non-stick properties for easy removal of posters and stickers. It is UV and heat stable, easy to handle and has high adhesion on a diverse range of substrates.
A Growing US Presence
Wacker has downstream production throughout the world and close to its customers. In fact, a $2.5 billion polysilicon production site in Charleston, SC, completed in 2016, was the largest single investment in company history. At the Charleston facility, Wacker has more than 20,000 tons of capacity and fully integrated closed loop technology. In two years, the site will add a pyrogenic silica plant with annual capacity of 13,000 metric tons.
In June, Wacker will dedicate a new R&D center in Ann Arbor, MI. The facility will support business and product development in the North, Central and South America regions, according to company executives.
Based at Wacker’s Michigan Innovation Headquarters, a co-work campus facility in Ann Arbor, the center consists of several labs for R&D and analytics. Projects Wacker intends to pursue right from the start include silicone-based softeners and personal care products, as well as health and medical care applications, and solutions for coatings and paints. The investment at Ann Arbor represents only a few million euro, according to Wacker executives, a strategy that is in line with the company’s overall plans going forward.
“During the past 15 years, Wacker has implemented an ambitious program of investment and internationalization—we devoted a lot of money,” observed Staudigl. “Now the company has entered a new strategic phase. In the next few years, we intend to reap the benefits of the seeds that we have extensively sown.”
During the next several years, until 2020, Staudigl said Wacker’s capital expenditures will remain below depreciation. In 2017, for example, capital expenditures will increase slightly to €450 million. During that time, the company will continue to invest in production facilities for intermediates and downstream products.
“In doing so, we will fully harness the growth potential in our specific regions,” he added.
For fiscal 2017, group sales are expected to rise by mid-single digits, driven by rising volume and higher prices. Through the first two months of the year, chemicals, polysilicon and Siltronic divisions all reported sales above prior-year values, according to Staudigl.
“Overall, we expect to generate first-quarter group sales of about €1.4 billion,” he concluded. “We expect volumes to rise at every division (in 2017).
However, Staudigl did offer one caveat. In his opening remarks, he bemoaned the growth of protectionism in the US and around the world, insisting such sentiment is the path toward slow growth.
“Two-thousand sixteen will be remembered as a year of upheaval and rising populism,” he noted. “The principle of free trade is being abandoned and protectionism is rising. They are very worrying tendencies.”