Investments
In 2010, WACKER’s investment strategy remained unchanged, its focus being on polysilicon. We intend to participate in further photovoltaic-sector growth and maintain our position as one of the leading polysilicon manufacturers worldwide. The lion’s share of investments therefore flowed into the expansion of polysilicon capacities. The start-up of Burghausen’s expansion stage 8 (nominal capacity: 10,000 metric tons) and further productivity gains boosted capacity from 2009’s 18,100 metric tons to around 30,500 metric tons in 2010.
In November 2010, we concluded a key investment project in China with our partner Dow Corning Corporation. After four years of construction, an integrated production complex for silicones was officially opened at Zhangjiagang (China). It ranks among the largest and most modern silicone sites worldwide. From this location, we can meet the soaring demand for silicones in China, and Asia as a whole. Both partners’ total investment amounts to US$1.8 billion. In two joint ventures with Dow Corning there, we manufacture siloxane and pyrogenic silica. Both are important feedstocks for manufacturing downstream silicone products, which WACKER and Dow Corning make independently at the Zhangjiagang site. WACKER has a
25-percent share in the siloxane-production joint venture; our stake in the
pyrogenic-silica facility is 51 percent.
We have also completed our supply chain for various intermediates and finished silicone products at Zhangjiagang. In October 2010, we officially commissioned a new production facility for silicone polymers there. The total investment was about €30 million.
The Group opened a new facility in Jena (Germany) in March 2010 to expand pharmaceutical-protein production at WACKER BIOSOLUTIONS. Pharmaceutical proteins (biologics) are used to treat various conditions, such as cancer, multiple sclerosis or hepatitis. The expansion, together with the new process-development and quality-control buildings completed back in 2009, brings WACKER’s total investment in the Jena facility to some €18 million.
Acquisitions
WACKER’s acquisition of the Fesil Group’s silicon-metal plant at Holla (Norway) was a key strategic milestone. Silicon metal is one of WACKER’s most important raw materials, needed to produce silicones and hyperpure polysilicon. The acquisition enables backward integration of WACKER’s supply chain, secures our raw-material supplies and makes us more independent of silicon-metal price trends. Through the acquisition, WACKER took over all of FESIL’s production facilities in Holla, including the site’s 129 employees and the associated real estate. Holla Metall’s production capacity is just under 50,000 metric tons of silicon metal per year, which corresponds to about a third of WACKER’s current annual needs. The purchase price was €66.5 million.
To round out our Asian activities, WACKER took over the South Korean Lucky-Silicone brand from Henkel Technologies Ltd. (Korea) in October 2010 for €14.7 million. As part of the acquisition, we obtained the rights to the brand and its customer base, the production plant in Jincheon (South Korea), and the inventories and receivables belonging to the business. WACKER kept on the 40 Lucky-Silicone employees. The Lucky-Silicone brand mainly comprises silicone sealants, manufactured and marketed for use in construction and other industries. Henkel had generated sales of around €20 million with this product in 2010. The Lucky-Silicone business started to be consolidated into the WACKER Group on December 6, 2010.
Divestitures
In contrast, WACKER sold its share in Planar Solutions, a joint venture consolidated using the equity method. WACKER’s 50-percent interest was acquired by FUJIFILM Electronic Materials, with whom we founded the joint venture back in 1998. Based in Adrian, Michigan (USA), Planar Solutions produces CMP slurries for semiconductor wafers. As this business is not one of WACKER’s core competencies, the investment was sold – for roughly US$35 million (€25 million). The profit from this transaction was €18.5 million. However, WACKER will continue to supply pyrogenic silica, a key component of these slurries, to FUJIFILM Electronic Materials. Planar Solutions’ most recent annual sales figure was US$60 million.