Wacker Chemie reaffirms commitment to silicones

Munich, Germany – Wacker Chemie AG has renewed its commitment to the silicones market with a strategic focus on serving the growing electric vehicle industry.

The German group has set itself the goal of becoming “a leading automotive speciality silicone supplier,” aiming to expand its OEM and Tier 1 customer base and leverage R&D capabilities, Wacker stated on 19 Sept.

“We will continue to invest systematically in innovation and in expanding our global production network,” explained Christian Hartel during a capital markets day event in Burghausen, Germany.

Focusing on speciality products, Hartel said the group would intensify its efforts on “high-tech silicones to enable the energy and mobility transition.”

The Munich-based group expects to capitalise on its recent investments in silicone expansions in China (ERJ report) and Germany (ERJ report) to support growth through to 2030. 

At the core of its strategy, Wacker aims to enhance differentiation by targeting specific, high-value speciality end markets.

In particular, the group identifies a ‘megatrend’ in the sustainable automotive sector, where it says silicones are "essential" for various key components in electric vehicles.

With high heat resistance, insulation properties, and flexibility, silicones are used up to four times more in electric vehicles than in internal combustion engines (ICEs), according to Wacker.

Specifically, the group aims to focus on ‘regionalisation’ and drive growth in India and China.

In China, it noted, the transition to EVs has shifted from niche to mainstream, with over 50% of new cars registered now being electric.

There, the group plans to focus on ‘high-end’ speciality products to counter a competitive environment, supported by its site expansion in Zhangjiagang.

In India, the goal is to build on the group’s "leading position" through its partnership with Metroark Chemicals and to increase its asset base at the new site in Pangarh.

In terms of sales strategy, Wacker said it aimed to maintain its position by adjusting prices over contract durations and through portfolio management, focusing on value addition.

Wacker has reported recovery within its silicones business over the recent months, reporting strong growth in the second quarter, driven by demand in certain markets.

The division saw earnings (EBITDA) increase 73% year-on-year to €90 million in the second quarter while sales increased 3% to €719 million, Wacker reported. (ERJ report)