Sector-Specific Conditions

We expect economic trends in the sectors relevant to our business to be largely positive in 2019.

Chemical Industry Expected to Post Slight Gains in 2019

After a good year in 2018, the German Chemical Industry Association (VCI) anticipates moderate growth for 2019. According to the VCI, chemical production will climb by 1.5 percent. The VCI forecasts that total sales will rise 2.5 percent. In addition to the weaker economy in Germany and diminished economic growth worldwide, the industry is confronted with political challenges such as the USA’s trade conflicts with the EU and China.

WACKER’s chemical divisions see major growth opportunities in BRICS countries and other emerging markets. Rising affluence in emerging economies will continue to lift WACKER’s sales in countries such as China and India, as well as across Southeast Asia. WACKER’s portfolio has many value-added products that are in demand among new customer groups.

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 is expected to rise by about 1.9 percent annually until 2021, with Asia as the main growth driver. B+L estimates that construction in Europe and South America is also on track for further growth, albeit at a slower pace than in Asia. North America’s construction market, on the other hand, is contracting slightly.

Construction-Industry Growth Rates by Region, 2019 to 2021

In the coming years, renovation, energy-efficiency and sustainability projects will continue to offer WACKER good growth opportunities. At WACKER POLYMERS, we expect to grow our construction sales in every region during 2019. The main growth drivers, in our view, will be low-emission interior paints and dry-mix mortars. At WACKER SILICONES, we intend to carry on increasing the percentage of value-added specialty products in a multitude of segments. Growth prospects are good for hybrid polymers (used to formulate high-performance adhesives and sealants) and for silicone sealants sold under our own brand.

Electrical and Electronics Sector Anticipates Moderate Growth in 2019

The electrical and electronics industry expects global market volumes to expand by 4 percent in 2019. According to the German Electrical and Electronic Manufacturers’ Association (ZVEI), most expansion will be spurred by emerging economies and Asia, with slight gains anticipated in Europe and the Americas.

WACKER sees good growth prospects in silicone gels and silicone encapsulants for electronic components and in customized silicones for automotive applications, such as driver-assistance systems, sensors and optical displays.

Market Remains Challenging, But Installed PV Capacity Likely to Continue Growing in 2019

Economic conditions for photovoltaics (PV) will again be dynamic and challenging in 2019. On the one hand, intense competition is creating market uncertainty.

On the other, levelized costs for solar power continue to drop, strengthening the competitiveness of PV relative to other energy sources. In addition, solar energy has a key role to play in achieving global climate-protection targets, since it significantly reduces specific carbon-dioxide emissions compared with fossil energy sources. New markets are opening up to PV due to its cost effectiveness and to political efforts to keep global warming below 2 °C. The PV market is expected to deliver further growth. China will remain the world’s largest and most important market in 2019. Other markets likely to add large amounts of capacity include India, the USA, Europe and Japan. Regions with strong growth potential include Central and South America, Southeast Asia, the Middle East and Africa. Based on our own market surveys and those of third parties, WACKER expects newly installed PV capacity to range from 110 to 130 gigawatts (GW) in 2019.