Press Release - WACKER Greater China


Press Release

Greater China

WACKER Focuses on Long-term Growth and Continued Investment in China

Shanghai, Apr 18, 2019

WACKER, the Munich-based chemical group, released its 2018 figures for Greater China today in Shanghai. WACKER’s three chemical divisions all achieved continued growth in Greater China due to strong consumer demand and better market prices, with chemical sales rising 18 percent in total. The polysilicon division, though, reported a sales decline due to China’s policy changes for new PV installations. Overall, WACKER Greater China generated sales of €1.05 billion in 2018, 13 percent lower year over year (2017: €1.2 billion). Confident in China’s economy and encouraged by the government’s efforts to open up domestic markets, WACKER expects to achieve long-term growth in China and will continue to invest in local R&D capabilities and downstream chemical capacity.

At WACKER SILICONES, one of WACKER’s four divisions, sales for 2018 benefited from China’s megatrends, including the rising standard of living and industry upgrades. Sales growth remained strong for value-added specialties, especially in construction, e- mobility and consumer goods. For standard products, the division’s supply was limited in China. In the first three quarters, China’s silicone market boomed, but then softened in Q4, when both market prices and demand declined markedly. For 2019, the division anticipates two-digit sales growth in specialties and price stabilization in standard products, with supply and demand becoming more balanced.

In 2018, WACKER POLYMERS generated sales and volume growth for both VAE dispersions and dispersible polymer powders. Growth was driven by rising customer demand for eco-friendly construction materials, such as low-odor, low-VOC plaster and diatom ooze, both of which deliver durable solutions with a natural appearance. For 2019, the division expects additional growth opportunities from new, sustainable products, such as NEXIVA® (a dispersible polymer powder for biocide-free wall paints) and VINNEX® (an additive for enhanced bioplastics).

Thanks to its high product quality, innovations and supply reliability, WACKER BIOSOLUTIONS continued to strengthen its leading position in the Chinese gum market. The division’s plant-based fermentation products also posted higher 2018 sales amid rising demand for healthy diets that incorporate non-fat, sugar-free, egg-free and vegan foods. For 2019, the division predicts further growth, spurred by new applications tailored to the Chinese market, including an alpha cyclodextrin (CAVAMAX®) used to formulate healthy drinks with foam toppings.

WACKER POLYSILICON faced headwinds, with demand and pricing for solar modules contracting strongly across the value chain from May 2018 after China announced that it would curb feed-in tariffs and cap the amount of new photovoltaic installations. As a result, WACKER POLYSILICON experienced a significant drop in volumes and average prices last year. The division used this market situation to build up its local inventories and shorten its product lead time to major customers. Given the fact that the PV market is projected to continue growing in the long term, WACKER POLYSILICON expects to increase its polysilicon volumes for mono-based solar cells and grow its market in the semiconductor market, in large part thanks to the high-quality of its polysilicon.

“The Asian Development Bank’s forecast for China’s GDP growth in 2019 is 6.3%, which is well above the world average of 3.5%,” notes Paul Lindblad, president of WACKER Greater China. “Given this forecast and thanks to our innovative products and reliability, we expect WACKER’s chemical business to grow further in 2019,” he explains. “In our polysilicon business, we project that the PV market will continue expanding in the years ahead. The main reason is that increasingly competitive prices across the value chain will continue strengthening the attractiveness of PV as an alternative energy source. China is the world’s biggest PV market and largest manufacturer for PV modules. Regardless of all the uncertainties, we expect our polysilicon business to generate long-term growth in China.”

The investment environment is steadily improving for WACKER Greater China due to the Chinese government’s determination to continue opening up the country’s markets. Encouraged by the many new pro-business policies (such as reduced import tariffs, more equal market access, reduced VAT and reinforced IP protection), WACKER will continue investing in China, enhancing its local R&D capabilities and expanding production capacity for downstream chemical products.

Last year, WACKER completed an expansion project at its Shanghai lab complex on schedule. As a result, the company started up a new food application lab there on March 20, 2019, and a technical competence center for cement and concrete on April 9. A new e-mobility competence center is also scheduled to open in Shanghai in the middle of this year. The new facilities reflect China’s increasing role in WACKER’s global technology network.

On the capacity expansion side, WACKER completed a debottlenecking project for VAE dispersions in Nanjing late last year, adding 30,000 metric tons of capacity. In Zhangjiagang, silicone-elastomer capacity is on track to increase by several thousand metric tons in mid-2019. Furthermore, a number of other new capacity expansion projects are currently under evaluation.

“WACKER has confidence in China’s economy and in the government’s determined efforts to open up markets here,” stresses Paul Lindblad. “WACKER will continue to invest in China in 2019 and beyond.”

Contact

Wacker Greater China
Media Relations & Information
Jessica He

Phone:+ 86 21 6130 2588
Email jessica.he@wacker.com
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