WACKER China FY2023 Business Affected by Chemical Price Fall, Demonstrates Solid Performance in Emerging Sectors

In FY2023, WACKER’s business faced challenges as a whole. Low consumer prices constrained product sales prices, while the downturn in the Chinese real estate market adversely affected business operations. However, the burgeoning emerging industries in China stimulated market demand for specific products, and silicone products are widely used in those industries. Notably, there was increased demand for silicone products in thermal conductivity, bonding, high-voltage cables and connectors in new-energy vehicles, as well as medical dressings. Furthermore, the growing demand for eco-friendly materials, the rising home renovation and refurbishment market, as well as the unveiling of new production capacity at WACKER’s Nanjing production site have fueled strong growth in sales volume of vinyl acetate-ethylene (VAE) dispersions and VAE dispersible polymer powders. WACKER BIOSOLUTIONS also witnessed notable growth in chewing gum and pharmaceutical business. This, coupled with launch of locally developed product CAVAMAX® Foam Topping Powder, contributed to the division’s steady growth last year.

“2023 marked a milestone for WACKER, as we celebrated our 30th anniversary of operations in China. This is also an occasion when we reflected on our past journey in the country,” said Alvin Hu, President of WACKER Chemicals (China) Co., Ltd. “WACKER maintains a long-term optimistic outlook on the Chinese market, with unwavering confidence, expectations, and development strategy. Our commitment to the Chinese market remains steadfast.”

Last year, WACKER stepped up investment in China. By the end of 2023, WACKER’s accumulative investment in China exceeded €1 billion. In May of last year, WACKER completed capacity expansion for VAE dispersions and VAE dispersible polymer powders at the Nanjing site. The expansion project had an investment of around $100 million and successfully went into operation. The expansion more than doubles WACKER’s production capacity in Nanjing, enabling it to meet growing customer demand for its high-quality binders, particularly from China’s buoyant construction industry.

Last September, WACKER also started construction of several new production lines for high-performance specialty silicones at its Zhangjiagang production site. With total investments of some €150 million, this is WACKER’s largest single investment in Zhangjiagang since the site was officially commissioned in 2010. The project will help WACKER continue to expand growth in downstream specialty silicones, and lay a solid foundation for its future development in China.

In recent years, there has been a notable increase in Chinese customers' demand for innovative specialty silicones. Following WACKER’s acquisition of 60 percent stake in Chinese specialty silane manufacturer SICO Performance Material Co., Ltd, SICO has smoothly integrated into WACKER's global operations last year. Leveraging on WACKER's global production network, SICO’s products are entering the global market at a faster pace. SICO is currently expanding its production capacity.

Looking ahead, at a time when new economy, such as AI and renewable energy, is thriving in China, WACKER will also tap more opportunities in those areas. “After multiple years of development, China has become WACKER’s largest and most important single market. We will continue to invest in the Chinese market while bolstering our local R&D capabilities to deliver a wider range of high-quality products to the market,” Hu said.