Wacker Silicones to double growth, concentrate on high-margin specialties

MUNICH—Wacker Chemie A.G. has set out ambitious growth plans for its silicones business as part of new strategic targets across the Munich-based chemicals group.

At a March 29 "capital market day" presentation in London, Wacker set out goals to lift overall sales to over $10.9 billion (€10 billion) by 2030 on 2020 while keeping profitability high.

The German group previously reported 2021 sales of $6.8 billion—including $2.9 billion from Wacker Silicones—up 32 percent on the previous COVID-19-impacted year.

For the Wacker Silicones division, the aim is to grow sales, via higher volumes and a better product mix, by between 6 percent and 10 percent per year.

That would accelerate an annual historic growth of 4-5 percent by a factor of 1.5 to 2.0.

Earnings (EBITDA) margin is to exceed 20 percent by 2030, up from a previous target of 16 percent.

Wacker said it will support growth of its chemicals units—silicones and polymers—with capacity expansions in key markets.

Capex across the two business areas is, therefore, planned to double to more than $439 million per year.

"Wacker Silicones is concentrating on high-margin specialties and will consistently follow this strategy going forward … and build on regional proximity to customers," said the group.

An investment, last autumn, in Chinese specialty silane manufacturer SICO Performance Material, was cited as underscoring this strategy.

"With this investment, Wacker aims to expand its range of high-quality specialties in Asia and move closer to its customers in these fast-growing markets," Wacker noted.

With its new plant in Panagarh, India, which is specialized in silicone end products, the division is continuing to strengthen its market leadership in that country.

Wacker Silicones also plans to create additional new capacity for specialties at Charleston, Tennessee, to help it "grow faster than the market through focused investments."

"We finished 2021 with record sales and strong earnings—despite headwinds from raw materials and energy," Wacker CEO Christian Hartel said. "We want to maintain this momentum and are charting our course for accelerated growth going forward."