We expect economic trends in the sectors relevant to our business to be largely positive in 2017.

Chemical Industry Expected to Grow Slightly in 2017

After a mixed year in 2016, the German Chemical Industry Association (VCI) predicts that chemical-sector momentum will remain weak in 2017. According to the VCI, global chemical production will rise only 0.5 percent, while total sales will grow 1 percent. Growth in Germany’s chemical sector will continue to be export-driven. Based on VCI projections, however, the difficult economic environment will hamper upward momentum.

WACKER’s chemical divisions anticipate growth opportunities primarily in the BRIC countries and other emerging markets. Increasing emerging-economy affluence will enable us to further boost our sales in China and India, for example, and in Southeast Asia. WACKER’s portfolio has many value-added products that address the needs of new customer groups.

WACKER’s Key Customer Sectors

Global Construction Industry to Remain on Growth Trajectory

According to research institute B + L Marktdaten GmbH, the construction industry will continue expanding over the next few years. On average, construction volume should climb by about 1.7 percent annually through 2019, with Asia being the main growth driver. B + L anticipates that the construction industry in Europe and North America will continue growing, albeit at a slower pace than in Asia. In South America, on the other hand, the construction market is stagnating.

In the coming years, renovation, energy-efficiency and sustainability projects will continue to offer WACKER good growth opportunities. At WACKER POLYMERS, we expect our construction-sector sales to climb in every region during 2017. The main growth drivers, according to our projections, will be low-emission interior paints and dry-mix mortars. At WACKER SILICONES, the percentage of high-value, specialty products in our construction-industry portfolio should continue rising. Growth prospects are good for hybrid polymers (for formulating high-performance adhesives and sealants) and for silicone sealants sold under our own brand.

Electrical and Electronics Industries Anticipate Moderate Growth in 2017

The electrical and electronics industries expect global market volumes to expand by 3 to 4 percent in 2017. According to the ZVEI (German Electrical and Electronic Manufacturers’ Association), this growth will be fueled primarily by Asia, with slight gains anticipated in Europe and the USA. In the German electrical and electronics sectors, the ZVEI forecast is for growth of 2 percent in 2017. WACKER expects good growth opportunities from silicone gels and silicone encapsulants for electronic components and from customized silicones for the automotive industry, e. g. for driver-assistance systems, sensors and optical displays.

Photovoltaic Market Growth to Continue in 2017 Amid Challenging Conditions

Conditions will remain challenging in the photovoltaic industry in 2017. Market uncertainty stems mainly from the low profitability levels of many solar companies, from production overcapacity and from low prices. Both solar module costs and global prices for solar modules fell in the course of 2016, in some cases by as much as 30 percent, making photovoltaics even more competitive compared with other energy sources in all regions of the world. In December 2015, 190 countries attending the Paris Climate Conference agreed to measures aimed at keeping global warming well below 2 ° C, ideally at only 1.5 ° C. The majority of the countries taking part in the conference have since signed the agreement. Photovoltaics (PV) have a crucial role to play in achieving the agreed climate targets as they can reduce specific carbon emissions by a substantial margin compared with fossil fuels. As a result of these political parameters and the increased competitiveness of photovoltaics, new markets for PV technology will open up and this segment of the global renewables market will continue to grow. In 2017, China will remain the largest and most important market worldwide. According to market researchers at IHS, other countries likely to add large amounts of capacity include the USA, India and Japan. Regions with high growth potential include Central and South America, Southeast Asia, the Middle East and Africa. WACKER’s own market research indicates that the photovoltaic market will see further growth in 2017. Newly installed PV capacity is likely to reach between 75 and 85 gigawatts (GW).

Photovoltaic-Market Trend in 2017

Demand for Semiconductor Wafers Likely to Rise in 2017

Market researchers at IHS Markit Technology expect silicon-wafer demand by surface area sold to increase by 5.1 percent in 2017. The main factor fueling this trend is semiconductor-market expansion. IHS Markit Technology anticipates that the silicon-based semiconductor market will post sales growth of 4.8 percent in 2017.