WACKER Achieved Steady Growth in 2016 and Reinforced its Competitive Position in China
Shanghai, Apr 19, 2017
WACKER, the Munich-based chemical group, posted annual sales of €1.37 billion in Greater China in 2016, a 2 percent increase compared with 2015’s €1.34 billion. The growth was mainly attributed to higher sales volumes due to rising living standards and upgrading by industries in China, as well as the region’s increasing need for sustainable products provided by WACKER. In line with China’s national strategy to further promote innovation and upgrade manufacturing capabilities, WACKER is expected to see continuous growth in 2017 by strengthening local R&D capabilities, optimizing investment in production facilities for downstream products and increasing the proportion of specialty products in the company’s portfolio.
WACKER continued to perform robustly in Greater China in 2016. Of the company’s five business divisions, WACKER SILICONES performed significantly well in value-added specialty products, especially for consumer goods, electronics and construction applications. The good performance of silicone specialty products was partially offset by lower prices for standard products in China. With its ongoing expansion of local R&D capabilities, WACKER will continue to increase the proportion of sales accounted for by specialty silicone products in 2017.
WACKER POLYMERS experienced strong volume growth from both vinyl acetate-ethylene (VAE) copolymer dispersions and dispersible polymer powders. The division benefitted from the growing need for environmentally-friendly materials and new product developments tailor-made for the Chinese market. In 2017, WACKER sees further growth potential in construction and infrastructure applications, in particular in new developing areas such as Western China.
At WACKER BIOSOLUTIONS, fine chemical products for pharmaceutical and agriculture applications showed especially strong growth. Additionally, the polyvinyl acetate (PVAc) solid-resin plant in Nanjing increased its sales volumes. Nevertheless, the division’s overall revenue decreased in 2016 due to lower product prices in response to declining raw-material prices. In 2017, the division expects new growth opportunities from rising market demand for healthy food and dietary supplements.
WACKER POLYSILICON continued to grow in 2016 as newly installed photovoltaic (PV) installations continue to grow in China and worldwide. Today China is the single largest PV market in the world, but more significantly is the number one solar module supplier to the global market. As the leader not only in quality and cost, but also in customer proximity and application support, WACKER expects the division’s volumes to continue growing in 2017, along with the increasing global market demand for high-quality polysilicon materials.
The silicon wafer business declined slightly in 2016 due to the fact that average wafer prices were lower year over year. Despite the challenging environment, Siltronic sustained its market position in Greater China. In March 2017, WACKER reduced its ownership in Siltronic AG from around 52% to some 30% in share, consistent with the company’s long-term strategy of focusing on chemicals.
“WACKER had a good year start into the year. With stabilized economic growth and the ongoing industrial upgrade in China, we see numerous opportunities to fuel our future growth,” said Paul Lindblad, president of WACKER Greater China. “For example, China is the third-largest market for cosmetics and personal-care products; China’s total number of electric cars has tripled since 2015; and the photovoltaics demand will keep expanding as well. In the industry sectors relevant to our business, the trend will be broadly positive in 2017. So, all in all, WACKER is expected to grow continuously in Greater China.”
In line with China’s focus on accelerated innovation, enhanced local R&D capabilities will be the driving force behind WACKER’s further growth in China. In November 2016, WACKER officially started up a new pilot reactor for VAE dispersions at its Nanjing site. The reactor serves as a research facility for both VAE dispersions and dispersible polymer powders to accelerate innovation from lab development to large-scale production and to optimize production processes. What’s more, WACKER is expanding its R&D labs in Shanghai for silicone as well as polymer products, and further plans to set up a new lab for the food industry. The new lab, which is expected to be completed in the second half of 2018, aims to support the increasing demand for healthy and functional foods and beverages. Accordingly, R&D personnel grew 20 percent in 2016 and will continue to grow by a double-digit percentage in the next few years.
“China is a cornerstone in WACKER’s strategy of expansion and further regional growth. Currently, we are working on plans to expand our VAE dispersion capacity in Nanjing and silicone elastomer capacity in Zhangjiagang,” said Paul Lindblad. “China has become WACKER’s largest and single most important market over the years. With our dedicated investment in sustainable production facilities and our local R&D, we are ready, to support our customers and partners in improving the life quality of people and building a greener China.”