Sector-Specific Conditions

In 2021, economic trends in the industries relevant to our business will remain under the cloud of the coronavirus pandemic. Varying rates of infection could lead to uneven trends across market segments and regions. But we expect our key industrial sectors to grow again in the medium term.

Chemical Industry Likely to Grow in 2021

After a difficult year for the German chemical and pharmaceutical industry, the country’s Chemical Industry Association (VCI) anticipates that production will increase by 1.5 percent and sales by 2.5 percent in 2021. On the other hand, the VCI expects employment to edge down 1 percent due to the sector’s structural transition, which the pandemic is accelerating.

Given the uncertainties surrounding the future course of the pandemic, WACKER’s chemical divisions face significant risks. Nonetheless, the strength of our broad product portfolio has already proved itself in the present crisis. In 2021, we expect to continue benefiting from this strength, for example in the medical technology sector, in label manufacturing, and as a producer of highly pure silanes for the electronics industry. Moreover, long-term trends remain intact and will accelerate in some cases. In the medium-term, the BRICS countries and other emerging economies will continue to offer growth opportunities. Rising affluence in emerging economies will bolster our sales in countries such as China and India, and across Southeast Asia. WACKER’s portfolio has many high-value products that appeal to new customer groups, spurring demand for WACKER technologies from industrial customers. Moreover, part of our product portfolio is used in highly automated, industrial manufacturing processes. In these areas, WACKER is generating above-average growth, including in advanced economies.

Construction Industry Recovers

According to market research institute B+L Marktdaten GmbH, the construction industry is set to grow in the medium term after its decline in 2020. On average, global construction volume is expected to rise by about 2 percent annually through 2023.

Similarly, WACKER POLYMERS forecasts an upward trend in 2021, driven by renovation, energy efficiency and sustainability. Around the world, the many government incentives, such as the European Green Deal, are likely to create additional momentum for the construction industry.

At WACKER SILICONES, the percentage of value-added specialty products is expected to grow further in many segments. Prospects are good for hybrid polymers, which are used to formulate high-performance adhesives and sealants. The same applies to silane-based cement additives, which not only offer energy-savings in production and an improved shelf life, but also enhance the quality and durability of concrete. There are also good opportunities for our “eco” product line, with its focus on sustainability.

Construction-Industry Growth Rates by Region, 2021–2023

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Upswing in the Electrical and Electronics Sector

The German Electrical and Electronic Manufacturers’ Association (ZVEI) forecasts a return to growth in 2021. It expects global market volumes to expand by about 6 percent. The rebound will be driven by both emerging and advanced economies.

In the automotive industry, WACKER continues to see generally good growth prospects, fueled for example by the increasing use of driver-assistance systems, sensors and optical displays, and by the growing importance of electromobility. Moreover, a catch-up phase in automotive sales versus 2020 may add momentum.

Further Increase in Installed Photovoltaic Capacity Likely in 2021

Economic conditions for photovoltaics (PV) will remain dynamic and challenging in 2021. On the one hand, intense competition is creating market uncertainty. On the other, levelized costs for solar power continue to drop, making PV more competitive relative to other energy sources. Solar energy is also an important component in achieving global climate-protection targets, since it significantly reduces specific carbon-dioxide emissions compared with fossil fuels. Both the cost effectiveness of PV and the political goal of keeping global warming below 2 °C are opening up new markets. The PV market is expected to continue growing. China will remain the world’s largest and most important market in 2021. Other markets adding large amounts of capacity are the USA, European countries, Japan and India. Highly promising growth regions include Central and South America, Southeast Asia, the Middle East and Africa. Based on its own market surveys and those of third parties, WACKER expects newly installed PV capacity to be between 150 and 180 gigawatts (GW) in 2021.