Strategy of the WACKER Group
WACKER’s vision and five overarching strategic goals have not changed. Our strategy is focused on profitable growth and the goal of attaining a leading competitive position in most of our business fields, while observing the principle of sustainable development. For further information, visit www.wacker.com
At our Capital Market Day in London in October 2017, we confirmed our strategy for the WACKER Group until 2020. Our strategic goals for the next few years remain as follows:
- Expanding our production capacities, with capital expenditures below depreciation.
- Generating above-average growth, compared with the chemical industry.
- Focusing even more strongly on sustainability.
- Achieving attractive margins throughout the economic cycle.
- Increasing our cash inflow from operating activities.
Our capital expenditures will remain below depreciation until at least 2020. In our individual regions, we are focusing spending on plants for producing intermediates and downstream products that have a lower capital intensity than full-scale plants for upstream products.
We want to grow faster than the chemical-sector average by deploying new capacities, by expanding in emerging markets and regions, by innovating, and by substituting competitors’ products with WACKER products. Product innovations will spur momentum, as will raising the percentage of specialty products in our portfolio. Our focal regions and countries for further growth remain unchanged: China, Southeast Asia, India, the Middle East and Brazil. We also see opportunities for our chemical business to expand in our established markets in Europe and the USA.
We continuously work on reducing our raw-material consumption and improving the process efficiency of our plants. The Wacker Operating System (WOS) program helps us boost productivity along the entire supply chain, the goal being to further reduce specific operating costs. In addition, we are developing a wide range of sustainable products for renewable energy, thermal insulation and electromobility that will help reduce CO2 emissions in the use phase.
Our significantly lower capital expenditures, our continuing efficiency and cost improvements, and our planned sales growth will all lift cash flow. We want our shareholders to benefit even more from our profitability. The goal is to distribute around half of our Group net income to them. Previously, our distribution ratio was at least 25 percent of net income.
Digitalization is a further topic that affects all our business processes. That is why we launched a digitalization program in 2017. It covers all core business processes – ranging from logistics, production control and maintenance through to our distribution systems and new business models. Digital transformation is a vital aspect of WACKER’s strategy and will be given top priority in the coming years.