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. 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
Although significant challenges are jeopardizing economic growth, WACKER sees good, medium-term opportunities for growing at a faster pace than global chemical production, especially in young markets and sales regions. The strongest momentum, in our view, will come from Asia in the next few years. 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 to our high standard of service and customer proximity. Additional growth potential for WACKER stems from programs in the USA and Europe to strengthen crucial technologies and industry sectors in regions where we are already present, and to locally strengthen the value chains involved. This includes semiconductor production, for example.
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, the reduction of carbon emissions, the world’s increasing mobility needs, and the growing demand for products that improve health and 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 composite materials. Our aim is to meet this growth with innovative products and technologies. We use rising sustainability requirements as opportunities for our sustainable products.
We see good growth prospects for the Silicones division 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. Electric vehicles require high-performance batteries. And we offer the thermally conductive silicones needed to enable effective thermal management, thus ensuring long-lasting, maintenance-free batteries. We also see further market opportunities for medical and wound care applications.
At the Polymers division, 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. The scarcity of raw materials, like sand for example, boosts the use of high-quality building materials. Our products contribute to durability by affording protection from damage, which means fewer repairs and, as a result, fewer resources. The use of dispersible polymer powders for modifying dry mortar remains a key aspect here. 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. The Polymers division continues to see growth potential in environmentally friendly water-based paints and coatings. We work continually to avoid substances of very high concern such as volatile organic solvents or formaldehyde. The importance of a circular economy continues to grow, and we are supporting trends such as the use of renewable raw materials and the replacement of plastic packaging with paper.
The Biosolutions division 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. Our mRNA competence center in Halle, which opened in 2024, reinforces our position in this forward-looking market segment. Due to the integration of ADL BioPharma S.L.U. in Spain, Biosolutions is able to commercialize biotech-related product and process innovations faster and in a more targeted manner for the food and cosmetics markets. We are in a position to strengthen our toll manufacturing business at our site in León, Spain.
The main growth opportunities for our polysilicon activities come from 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. In the photovoltaics segment, the trend toward monocrystalline solar cells continues to gather pace. These cells offer particularly high levels of efficiency (n-type solar cells) and also entail particularly high demands in terms of polysilicon quality. WACKER considers itself to be one of the leading providers in the n-type market segment. To seize the opportunities provided by these trends, our Polysilicon division is focusing on producing polysilicon of the highest quality possible. Additional opportunities for the division stem from programs in the USA and Europe to strengthen crucial technologies, such as semiconductor and photovoltaic production, in the regions where we are present, or to re-establish local value chains there.
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. In 2025, though, our capital expenditures in this area will be significantly below the high prior-year level. Our investments will mainly focus on manufacturing plants for intermediates and downstream products, as well as on measures to optimize and maintain existing facilities.
The Silicones division will account for the largest share of investment spending. The prime focus here in 2025 will be on expanding the site in Zhangjiagang (China) and on a new site in Karlovy Vary (Czech Republic) to increase production capacities for specialty silicones. New capacities for specialties are also expected to come on stream in Burghausen, South Korea, Japan and at our SICO joint venture in China during 2025 and subsequent years.
One of the capacity-expansion projects at the Polymers division is for VAE dispersions in Calvert City, USA. At the Polysilicon division, we are expanding semiconductor-grade polysilicon capacity in Burghausen and will bring this new facility on stream in 2025. The Biosolutions division’s competence center for mRNA actives in Halle went on stream as planned. The focus is now on investments in its site in León.
Performance-related opportunities
WACKER has a number of opportunities for improving its cost structures, processes and productivity. At the Polysilicon division, 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. In addition, WACKER is working on specific measures to optimize workflows in the area of maintenance and technical spending.
