Wacker expanding silicone production with $200 million investment

CHARLESTON, Tenn.—The U.S. silicone market has Wacker Chemie A.G.'s full attention, as the world's second-largest producer of silicone materials has announced a $200 million expansion at the Tennessee Valley location.

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

A feasibility study is ongoing for the project.

"In the U.S., demand for silicones has shown above-average growth in recent years," said David Wilhoit, president and CEO of U.S. subsidiary Wacker Chemical Corp.

"With this comprehensive investment offensive, we are further expanding our position in the world's second-largest chemical market."

The U.S. silicone market, according to market analyst Grand View Research Inc., is seeing strong growth at 4.3 percent CAGR through 2028 (about $14.4 billion in the U.S. in 2021).

Driving demand are the automotive, construction, medical, cosmetics, electronics and foodstuff industries.

"The planned expansion measures in Charleston are a further step toward making Charleston a fully integrated site with closed production loops, and an important prerequisite for accelerating our growth as planned," CEO Christian Hartel said in a July 26 release.

The Charleston location already produces fumed silica (HDK brand, a filler and anti-caking agent) for captive use and sale; as well as high-purity polysilicon (highly-refined silicon metal from quartzite) for the solar and semiconductor industries.

With the expansion, the site will see increased production of high-consistency silicone rubber and silicone sealants for construction applications.

A total annual capacity with the expansion was not immediately known.

In measures taken over the last year alone, Wacker has pushed to vertically integrate its operations, expanding its upstream refined silicon metal production in Norway.

In the latter phases of the Charleston project, Wacker plans to add production facilities for silicone intermediates, as well as silane-terminated polymers, typically used in adhesives and sealants.

"This business is of strategic importance to us," Hartel said. "Demand for high-performance specialty silicones is showing particularly strong growth. Such specialties enable innovative, tailor-made solutions in key industries such as automotive, construction, electronics and medical technology.

"By expanding our capacities, we aim to support our customers to the best of our ability."

Wacker Chemie is eying sales of more than $10.1 billion by 2030, with an EBITDA of more than 20 percent.

The global silicone market is expected to crest $28 billion by 2030, according to Grand View Research.

With record sales in 2021 despite raw material pricing volatility and supply chain challenges, Wacker has remained on a growth trajectory.

In the last year, Wacker has invested more than $107.3 million in expanded capacity projects for HCR and LSR at facilities around the globe, including sites in the Czech Republic, Japan, China and India.

The company intends to increase growth in its chemical divisions by focusing on product specialties, especially silicone rubber product specialties.

It expects additional LSR capacity to originate from expansions in Burghausen, Germany, set for an end-of-year completion; and at a new, U.S.-based production facility in Adrian, Mich., with an eye toward the North and Central American markets.

Total global capacity increase for LSR was not known, nor was a timeline for the Adrian, Mich., expansion.

The Panagarh, India, site is the closest to beginning production (HCR), Wacker told Rubber News earlier this month.

The Panagarh expansion, announced July 5, is three times the size of another Wacker production plant that sits about 100 miles to the southeast of Panagarh in Amtala, near Kolkata.

On the research and development side, Wacker recently announced a multi-million dollar biotechnology center to be built in Munich for 90 research engineers, set to open in 2024 and focus on biopharmaceuticals and advanced medicines.

And in late May, the company opened the doors to a new 140,000-sq.-ft., $50 million innovation center in Ann Arbor, Mich.

For more on the Charleston expansion, see the Aug. 8 issue of Rubber News.