Photo gallery: Wacker opens R&D center in Michigan

ANN ARBOR, Mich.—Wacker Chemie A.G. has opened its Silicones R&D Center in Ann Arbor that will be used to develop new products for its customers in the Americas.

The 10,000-sq.-ft. site represented a "single-digit million dollar investment" that will be operated by Wacker Chemical Corp., Wacker's Adrian, Mich.-based subsidiary for North and Central America and the North Andean Region of South America. The silicones center is located at the co-work campus of the Michigan Innovation Headquarters and includes laboratories for research and development, along with analytics.

Initial staffing will be 10 "highly specialized experts in the field of silicone and polymer chemistry," Wacker officials said at the June 13 grand opening of the center. Long-term plans will be to employ 25 scientists at the center.

"We have completed the necessary preparation work and installation of equipment for several labs focusing on research and development," said David Wilhoit, Wacker Chemical Corp. president and CEO. "Right from the start we are engaged in projects involving health and medical care, paints and coatings, electronics and personal care products, all of which are key industry growth segments, particularly for silicone-based chemistry."

Axel Schmidt, Wacker Chemical vice president for silicones, said the research at Ann Arbor will be focused on "developing advanced and forward-looking solutions in concert with regional trends that can be quickly brought to market."

He added that the center complements Wacker's strategic business model of being close to its customers to be able to serve market trends.

Focus on Americas

Wilhoit said the new center is part of a changing philosophy on R&D within Munich-based Wacker over the past several years. The firm historically had done much of its R&D work at a centralized facility at its site in Berghausen, Germany.

But that focus now has changed to a more regional approach, with R&D centers located on a regional basis, with a site put in South Korea to focus on electronics and another in China to focus on silicone rubber. The Silicones R&D site in Ann Arbor will focus on health and wound care, though it also will work on projects for other industries.

"The main focus now is the American market," Wilhoit said. "Of the capital investment over the past five years, the majority of it has been in the U.S."

He pointed to $10 million in investment projects at Adrian over the past couple years, and two major investments in Tennessee, including a new facility for fumed silica in Charleston that just recently had a groundbreaking ceremony. "With this investment in the region, the confidence we have in growth in the region and the confidence of the team we have here, we have decided to build an R&D center in the U.S.," he said.

He added that the center was located at the incubator facility rather than added on at Adrian because space was limited at Adrian, and Wacker was able to get the facility up and running in less than a year at the incubator.

Mark Smith, who oversees the incubator, said the site has housed more than 20 firms—with Wacker being the largest tenant—and is populated with a wide range of capabilities, from polymer chemists, physicists, drug compounders, biologists and testing labs. About 90 percent of the tenants are tech companies, some with just one or two employees.

"Diversity is really key to success on our vision," Smith said. "We want people with diverse points of view being able to share ideas or solve problems."

Growth in silicones

Schmidt has been VP of the Silicones Division at Wacker Chemical Corp. for the past four years, and said the company expects growth rates of 3-5 percent a year for silicones, well above what is forecast for GDP. He added that silicones fit in well with the global trends that Wacker has identified, including health care, mobility and resource savings.

From a regional perspective, he said Peru and Columbia have strong growth rates, Mexico has a strong automotive industry, and Wacker has solid silicones sales in the U.S., particularly in Ohio, Michigan and California. Besides Adrian, Wacker operates Sil-Mix custom compounding operations in Ohio and California.

The firm's three-pillar strategy for silicones includes value creation, cost containment and innovation. And with Wacker committed to spending 3 percent of sales annually on R&D, the new site is a natural. "Opening this center is really a key milestone for us in that regard to focus more on innovation in order to open new markets and create new products based on local demands," Schmidt said.

Areas where Wacker sees opportunities to create new solutions include such areas as wound care, resource saving, construction and e-mobility. The latter is one area that Wacker once saw as a threat because it reduced the need for heat-resistant silicone rubber in vehicles.

"We now see e-mobility as an opportunity because there is way more electronics in the car," he said, "and for protection of these electronic components, silicone really is the material of choice."

Another potential area for growth is in 3D printing applications, with Schmidt noting Wacker was the first company to print 3D silicone components.

Long-term research

While the official opening came June 13, the Ann Arbor center became operational at the end of March. Its initial 10 employees are working on six projects currently, and Schmidt said the R&D work in Ann Arbor will focus more on long-term research, as opposed to the short-term formulations work done at the labs in Adrian.

Projects may be driven by a customer need, or by an opportunity Wacker has identified for potential future applications, he said.

Christoph Briehn will head up the center as director of R&D for silicones innovation. He started his career working in long-term R&D, then moved onto the business team for silicone rubber, where he worked a lot in health care and baby care products. There he learned about the business side of technical work.

"Coming to the U.S., it is very interesting for me now to apply both: do research while making customers (internal and external) satisfied with our developments."

He added that while some of the work may be for a specific customer, the typical projects will have broader applications. "We have more time for working on mid-term solutions," Briehn said. "We listen to our colleagues as to what the trends are, then we define the projects. Then ideally within a time frame of one to three years we will have a development to present to the market."

There are more potential projects in Ann Arbor for liquid silicone rubber and room-temperature vulcanized silicone rubber rather than solid HTV silicone elastomers, he said, because HTVs would require bringing in a rubber mill.

For 2016, the Wacker Silicones business accounted for $2.22 billion of Wacker Chemie's $5.14 billion of global sales. The Americas business unit posted $916 million of the overall company's sales. The silicones unit's key technologies include elastomers, hybrids, emulsions and resins.