The WACKER Group’s Prospects
Based on our assumptions, we expect the global economy to grow in 2020. Most momentum will come from emerging markets in Asia, with stable growth expected in the USA. Growth rates will remain low in Europe.
Investment Spending and Production
As in 2019, our capital expenditures in 2020 will concentrate on production plants for intermediates and downstream products. At around €350 million, capital expenditures will be on par with last year and below the level of depreciation /amortization. WACKER SILICONES will be the focus of investments, accounting for around 50 percent. Spending there will concentrate on intermediate and downstream plants in Burghausen and Nünchritz (Germany). In the course of the year, WACKER POLYMERS will complete a dispersion reactor under construction in Ulsan (South Korea).
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Location |
Projects |
Start-Up |
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Ulsan, South Korea |
VAE dispersion reactor |
2020 |
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Burghausen, Germany |
Gas turbine |
2020 |
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Future Products and Services
WACKER SILICONES is leveraging diverse applications in the construction, electronics, automotive and personal care industries. In the construction sector, there are new opportunities for silane-modified hybrid polymers, e.g. as sealants and adhesives, and in wear-resistant protective coatings for concrete floors. Plenty of potential is offered by our new, silane-based cement additives. They save energy during the production of cement, improve its storage stability, and increase the quality and durability of concrete. To improve concrete formulations, WACKER maintains special competence centers in China and India, both key growth regions. We are benefiting from rising demand for specialty silanes in microelectronics and for silicone products in the consumer goods sector, with the latter products increasingly being manufactured using renewable raw materials. Thermally conductive silicone elastomers are becoming an indispensable material for electromobility, where their cooling properties make them an important thermal-management component of state-of-the-art battery cells. In the automotive, entertainment and medical industries, our new electroactive silicone laminates are supporting the development of innovative touchscreens.
WACKER POLYMERS is intensifying its activities in polymeric binders for sophisticated coating and construction applications. A significant trend here is growing customer demand for sustainable, environmentally compatible solutions. WACKER POLYMERS is actively seizing these market opportunities and developing corresponding product lines. For example, the division is able to offer a commercial-scale line of VAE (vinyl acetate-ethylene) copolymer dispersions incorporating renewable raw materials.
For WACKER BIOSOLUTIONS, the pharma and food markets currently offer growth potential. The pharma market is steadily shifting toward bioengineered medicines. Our acquisition of the Amsterdam production site means we have new capacity for continued growth as a contract development and manufacturing organization (CDMO). The division sees additional growth potential in biologics, vaccines and live microbial products – all areas in which the Amsterdam site is a certified producer. In the food market, we are supporting the “healthy eating” trend – for example, with the innovative approach of complexing the antioxidant curcumin with cyclodextrins to produce vegetable-based dietary supplements. In the vegan sector, our cyclodextrins offer a solution for egg-free baked goods.
In the coming years, demand for high-quality polysilicon will rise further. In particular, demand is growing constantly for monocrystalline cells, which are highly efficient and generate more electricity from the same amount of sunlight. WACKER occupies a strong position here. With our hyperpure polysilicon, we are ideally placed to supply the fast-growing segment for monocrystalline cells. In addition, we are increasing our share of high-quality polysilicon for semiconductors.
Research and Development
The Group’s research and development work remains focused on key strategic projects. WACKER intends to spend 12 percent of its R&D budget on these projects in 2020 (2019: 10 percent). Our R&D work is prioritizing the highly promising fields of energy, electronics, automotive engineering, medical technology, consumer care, biotechnology and construction applications. One area of special emphasis is energy storage and renewable-energy generation.
Digitalization
WACKER’s ongoing digitalization program is progressing with a wide range of individual projects. Spanning every company sector, the projects aim to make workflows and processes leaner and more efficient.
Employees
We expect employee numbers to decline in 2020. Reducing the headcount is part of the Shape the Future restructuring and efficiency program. The focus is on getting by with fewer jobs in indirect, functional departments.
Sustainability
WACKER’s sustainability goals for the next few years are described in the Non-Financial Report. In 2020, the regional focus of WACKER’s sustainability management activities will be on Asia, where we will examine environmental, health and safety (EHS) aspects at individual sites.
The new gas turbine installed in the combined heat and power (CHP) plant at the Burghausen site will help reduce carbon dioxide emissions substantially compared with the old turbine, while producing the same amount of electricity.