Wacker increases silicones capex to €90m in first half

Munich, Germany – Wacker Chemie AG’s silicones unit expanded its capital expenditures in the first six months of the year to increase production capacity across global sites.

The German supplier said it invested €89.3 million during the first half of the year in projects which included expanding production capacity for silicone speciality products at Nunchritz, Germany.

Up from last year’s €81.4 million, the capex also went towards expanding production capacity for organofunctional silanes at the Jining site of subsidiary Sico Performance Material (Shandong) in China, Wacker said 27 July.

The related investment projects, Wacker informed ERJ, are 'either ongoing or within the context of previously announced expansion projects.'

Over the six-month period, Wacker's silicones unit reported a 73% year-on-year decline in earnings (EBITDA) to €148 million, on sales 21% lower at €1.45 billion.

The German-based group linked the declines to lower prices and reduced volumes for specialities.

“Large customer inventories and ongoing caution when ordering also left their mark,” the group added in its first half report.

According to Wacker, “virtually all” application areas saw sales decrease “substantially”, with the dip on revenue especially pronounced for consumer applications.

Specialised silicones for automotive and energy sectors remained “comparatively stable”, the group further commented.

Earnings, according to Wacker, were significantly impacted by reduced plant-utilisation rates as well as lower prices, especially for standard products.

“Persistently high” energy and raw material prices also negatively affected earnings.