Wacker gets bullish on China with $100 million investment

NANJING, China—A $100 million investment to expand VAE dispersion and powder capacity in China has come to fruition for Wacker Chemie A.G., the Munich-based silicone firm said May 24.

The site in the capital of China's eastern Jiangsu Province is expected to more than double its production capacity of vinyl acetate-ethylene copolymer dispersions and powders.

And the new production lines, which include a new reactor for dispersions and an additional spray dry system for powders, represent the chemical company's nod toward 20 percent of the world's construction market.

"The capacity expansion project at the Nanjing site is a milestone for Wacker China," said Alvin Hu, president of Wacker China, during a May 24 inauguration ceremony in Nanjing that drew about 200 Wacker employees and Chinese government officials. "With the expansion, we have at the same time reserved sufficient space for subsequent production lines, allowing for the rapid construction of future expansion projects.

"It will not only meet increasing customer demand in China, but also provide Wacker with sufficient capacity for its long-term development in the region."

Specifically, Wacker's VAE dispersions and powders are used in binders for tile adhesives, cement-based sealing systems, waterproofing membranes and carpet coatings.

"Our new plant is close to our customers, thereby supporting their growth even more effectively," said Peter Summo, director of the Wacker Polymers business division (which sits within Wacker Chemicals, along with Wacker Silicones).

Nanjing is one of four production sites operated by Wacker Polymers worldwide.

The new production lines in Nanjing, the largest of their kind in the world according to Wacker, became operational May 24.

They feature an innovative dispersion polymerization process and a monitoring system that ensures "very high safety standards," and the new dispersion reactor is one of the most modern and advanced plants in the industry, Wacker said.

"With the capacity expansion in Nanjing, we are strengthening our position as the global market leader for dispersions and polymer powders based on vinyl acetate-ethylene copolymers," said Wacker CEO Christian Hartel. "China is already one of the world's most important sales markets for adhesives and thus also for polymer dispersions."

The Nanjing capacity expansion is significant, as well, in that it faced major delays due to on-and-off COVID restrictions.

"The capacity expansion in Nanjing started at the end of 2020 and has now been successfully completed after overcoming numerous challenges resulting from the coronavirus pandemic," Hartel said.

Wacker Polymers also produces materials used in paints and varnishes, non-wovens and fiber composites. The business segment has sales and technical centers in Germany, China, South Korea and the U.S.

Wacker Chemicals, Wacker Polysilicon and Wacker Biosolutions represent the three main business units for Wacker Chemie A.G.

The U.S. silicone market has Wacker's full attention, as the world's second-largest producer of silicone materials could be making a $200 million expansion at the Tennessee Valley location in Charleston, Tenn.

A feasibility study is ongoing for the project, announced in July 2022.

The expansion, which will see new silicone production facilities built in phases over the next several years (assuming the feasibility study is approved), is expected to create 200 jobs.

But investments continue for Wacker in both capacity expansions and acquisitions, as Wacker purchased ADL Biopharma of Leon, Spain, from Kartesia, a financial investor, earlier this month.

The transaction, which "exceeded $108 million," was finalized May 8, according to Wacker.

The acquisition within Wacker Biosolutions "significantly strengthens" the life sciences division, adding about 300 employees and 2,000 cubic meters in fermentation capacity for Wacker.

The division will look to achieve sales of more than $1 billion by 2030.

Last year's net sales for the unit were more than $900 million.

Wacker Biosolutions conducts research into mRNA and biopharma wearables, among other applications.

Specifically, Wacker has about $86.3 million per year pegged for capital expenditures in the biosolutions business segment.

Wacker estimates the unit, which offers pharmaceutical proteins and cyclodextrins in addition to fermented cystine, will crest the $1 billion sales mark by 2030.

Overall, Wacker has bold goals in the next decade as it looks to accelerate growth and address sustainability needs—without sacrificing one for the other.

Looking to 2030, the chemical and silicone producer is eyeing net sales in excess of $12 billion by 2030 (Wacker saw about $8.9 billion in net sales in 2022) and greenhouse gas reductions of between 25 and 50 percent.

Overall, Wacker has more than 15,700 employees at 27 production sites, 26 technical centers (the most recent of which opened in Ann Arbor, Mich.) and 51 sales offices around the world.