Annual Report 2022

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Creating tomorrow’s solutions

Opportunities Report

Opportunity Management System

WACKER’s opportunity management system remained unchanged from the previous year. It is both a divisional and Group-level instrument. We identify operational opportunities and leverage them in our business divisions, as they have the detailed product and market expertise required for these tasks. We continuously use market observation and analysis tools to obtain, for example, a well-structured evaluation of industrial, market and competitor data. In addition, we conduct customer interviews to evaluate future opportunities. The monitoring process – how WACKER seizes opportunities – is based on key indicators (such as rolling forecasts and current-status reporting).

Strategic opportunities of overriding importance – such as strategy adjustments, potential acquisitions, collaborations and partnerships – are handled at the Executive Board level. Such opportunities are incorporated into WACKER’s annual strategy-development and planning process, with current issues discussed at regular Executive Board meetings. As a general rule, we elaborate different scenarios and risk-opportunity profiles for these issues before making decisions.

WACKER has identified a whole range of opportunities for advancing the Group’s success over the next few years.

Overall Economic Opportunities

Despite the slowdown in global economic output projected by many economic analysts for 2023, WACKER continues to see good opportunities to grow faster than global chemical production in the medium term, especially in young markets and sales regions. The strongest momentum, in our view, will continue to come from Asia, especially India and Southeast Asia. We are constantly expanding our presence in these markets in order to seize the opportunities there. Our technical competence centers and the WACKER ACADEMY are pivotal in achieving WACKER’s high standard of service and customer proximity. Additional growth potential for WACKER stems from programs in the USA and Europe to strengthen critical technologies and industry sectors, or to bring the corresponding value chains onshore again. These include not only semiconductor production, but also the individual stages in the photovoltaic value chain.

Sector-Specific Opportunities

Sector-specific opportunities primarily result from our broad product portfolio, which puts us in an excellent position to meet global megatrends. For example: the advance of urbanization, the trend toward conserving natural resources and energy, efforts to reduce carbon emissions, the world’s increasing mobility needs, and the growing demand for products that enhance the quality of life. These trends remain as important as ever to our business.

Rising affluence in emerging-market economies, particularly in Asia, coupled with ever more stringent market and customer requirements, is fueling demand for products incorporating high-value silicones. To benefit from this trend, WACKER intends to keep raising the percentage of high-value specialty silicones in its portfolio versus standard products. Areas of special focus range from the automotive and cosmetics sectors to personal care, health, medicine, electronics and clothing. Our aim is to meet this growth with innovative products and technologies.

We see good growth prospects for WACKER SILICONES in the electrical and electronics market, especially in automotive electronics. Growth is being spurred by digitalization, connectivity and electromobility. Electronic automotive assistance systems, for example, are becoming increasingly important and are indispensable for autonomous driving. Silicone gels and silicone encapsulants reliably protect the sensors and electronic components needed in such vehicles. In the coming years, electromobility is likely to gain further momentum. Forecasts put the global number of electric vehicles at 116 million in 2030. That would be a tenfold increase in the global EV fleet compared with 2020. Electric vehicles also require high-performance batteries. That is why we have developed thermally conductive silicones. These enable effective thermal management, thus ensuring long-lasting, maintenance-free batteries.

At WACKER POLYMERS, growth potential stems from the rising affluence of emerging economies, from increasing urbanization, and from the trend toward conserving natural resources and cutting carbon dioxide emissions. The shift away from conventional building materials and construction methods to value-added systems is set to continue. A key aspect here is the use of dispersible polymer powders for modifying cement. The addition of these powders enables mortar mixtures not only to be processed more easily and applied more thinly, but also to have substantially improved properties. At the moment, unmodified dry-mix mortars account for some 70 percent of the total used in the building sector. In many regions, construction experts have only just started to appreciate the benefits of polymer-modified dry-mix mortars. WACKER POLYMERS also sees growth potential in environmentally friendly water-based paints and coatings.

WACKER BIOSOLUTIONS expects major growth opportunities from bioengineered products. One focal point here is on the production of actives based on messenger ribonucleic acid (mRNA) for therapeutic agents and vaccines. Through the sites acquired in Amsterdam (2018) and San Diego (2021), the division has considerably expanded its capacities and expertise in these fields. The ongoing transformation of our Halle site into a technical competence center for mRNA will consolidate and strengthen our position in this highly promising market segment. In cyclodextrins, we are developing new applications, including for food supplements with anti-inflammatory and antioxidant properties.

The main growth opportunities for our polysilicon activities stem from the strong demand for semiconductors and for the monocrystalline silicon used in highly efficient solar cells. We produce polysilicon of consistently very high quality – the kind that is crucial for making increasingly powerful semiconductors. Polysilicon from WACKER can already be found in nearly half the computer chips worldwide. In the photovoltaics segment, the trend toward monocrystalline solar cells continues to gather pace. Monocrystalline silicon of particularly high purity (known as “n-type mono”) is needed to achieve the highest possible conversion efficiency. WACKER considers itself to be the world’s leading provider in this segment. In order to make the most of the opportunities presented by these trends, WACKER POLYSILICON has placed its strategic focus firmly on the manufacture of polysilicon of the highest quality. Additional opportunities for the business division stem from programs in the USA and Europe to strengthen critical technologies like semiconductor and photovoltaic production in the respective local regions, or to bring the corresponding value chains onshore again.

Strategic Opportunities

In order to make the most of our divisions’ opportunities for further growth, we will concentrate on meeting rising customer demand and bolstering our downstream-product capacity, particularly for specialties. The capital expenditures required for this will continue to increase in 2023. The focus here is on expanding capacities at all of our four business divisions. At our Nünchritz and Burghausen sites in Germany, Panagarh in India and Charleston, Tennessee in the USA, we are currently building new facilities for a range of specialty silicones, such as solid and liquid silicone rubber for electromobility and medical-technology applications. At Nanjing in China, we are building new production facilities for dispersible polymer powders to supply the construction sector. WACKER BIOSOLUTIONS is currently expanding the Halle site in Germany, transforming it into a technical competence center for mRNA actives. We are also expanding our capacities for electronic-grade silicon at Burghausen.

Performance-Related Opportunities

WACKER has a number of opportunities for improving its cost structures, processes and productivity. At WACKER POLYSILICON, we are continuing to implement our program to cut production costs. At our chemical divisions, we are tapping further cost-cutting potential with our productivity and efficiency program – the Wacker Operating System. Our various cost-cutting levers include: specific costs for auxiliaries; productivity advances on the manufacturing side; and broadening our choice of suppliers to secure more attractive purchasing terms.

Cyclodextrins belong to the family of cyclic oligosaccharides (i.e. ring-shaped sugar molecules). They are able to encapsulate foreign substances such as fragrances and to release active ingredients at a controlled rate. WACKER BIOSOLUTIONS produces and markets cyclodextrins.
Dispersible Polymer Powders
Created by drying dispersions in spray or disc dryers. VINNAPAS® polymer powders are recommended as binders in the construction industry, e.g. for tile adhesives, self-leveling compounds and repair mortars. They improve adhesion, cohesion, flexibility and flexural strength, as well as water-retention and processing properties.
Substance outputs, noise, vibrations, light, heat or radiation emitted into the environment by an industrial plant.
A polymer is a large molecule made up of smaller molecular units (monomers). It contains between 10,000 and 100,000 monomers. Polymers can be long or ball-shaped.
Hyperpure polycrystalline silicon from WACKER POLYSILICON is used for manufacturing wafers for the electronics and solar industries. To produce it, metallurgical-grade silicon is converted into liquid trichlorosilane, highly distilled and deposited in hyperpure form at 1,000 °C.
After oxygen, silicon is the most common element in the Earth’s crust. In nature, it occurs without exception in the form of compounds, chiefly silicon dioxide and silicates. Silicon is obtained through energy-intensive reaction of quartz sand with carbon and is the most important raw material in the electronics industry.
General term used to describe compounds of organic molecules and silicon. According to their areas of application, silicones can be classified as fluids, resins or rubber grades. Silicones are characterized by a myriad of outstanding properties. Typical areas of application include construction, the electrical and electronics industries, shipping and transportation, textiles and paper coatings.
Wacker Operating System (WOS)
The Wacker Operating System (WOS) program pools, promotes and processes corporate projects for systematic process improvement. It is the basis for a groupwide improvement initiative by WACKER.