Business Area How Care Chemicals creates value

By developing environmentally compatible products in response to lifestyle-driven megatrends, Care Chemicals has strengthened Clariant’s market position and corporate image. Comprised of Industrial & Consumer Specialties, New Business Development, and the industrial Biotechnology business, Care Chemicals focuses on highly attractive, high-margin, and low-cyclicality segments.

Applications

Industrial & Consumer Specialties

  • Automotive fluids
  • Aviation
  • Construction
  • Crop solutions
  • Gas treatment
  • Heat transfer fluids
  • Industrial & home care
  • Industrial lubricants
  • Paints and coatings
  • Personal care
  • Special solvents

New Business Development

  • Conductive inks
  • Electronic materials
  • Food additives for the dairy, bakery, and meat industries

Biotechnology

  • Bioethanol and alternative fuels
  • Biobased chemicals

Shaping today and tomorrow

Market insights, cutting-edge technologies, and a forward-looking approach to business comprise the core of Care Chemicals. The Business Unit Industrial & Consumer Specialties is one of the largest providers of specialty chemicals and application solutions for consumer care and industrial markets.

New Business Development explores business opportunities beyond the current scope of the Business Units. New areas include for example conductive inks, electronic materials, and additives for the dairy, bakery, and meat industries. Group Biotechnology focuses on biobased processes and products from renewable resources. The sunliquid® process for the sustainable and economic conversion of lignocellulosic material to cellulosic ethanol or biobased chemicals is now fully developed and ready to launch in industrial plants with a production capacity of 50 000 to 150 000 tons of cellulosic ethanol per year. Its benefits are being demonstrated in the precommercial plant in Straubing, Germany.

Rising disposable incomes and sustainable buying behaviors as growth driver

Increasing urbanization, scarcer arable land, and the consequent need for increased agricultural productivity, emerging market growth, and rising disposable incomes are key growth drivers for Care Chemicals. The relevant market for the Business Area is growing by 4 to 5% each year, which also represents the growth target for Care Chemicals. Since the average living standard in emerging market economies equalizes with living standards in developed economies, emerging markets offer rich opportunities for growth in all segments of Care Chemicals. Fast urbanization in emerging markets also creates a demand for more convenient and differentiated solutions that perform better at lower prices. In the home care market in China, for example, a switch from powder detergents to liquid detergents is underway.

The low oil price in 2016 created pressure for oil derivatives such as surfactants, resulting in a window of opportunity for sugar-based, renewable chemicals such as glucamides. The use of renewable resources, sustainable production processes, and biotechnological innovations is rapidly increasing in importance as markets try to capture consumers that are focused on a healthy lifestyle and respect for natural resources. While a shift to bio-based solutions can already be observed in the Personal Care and Home Care markets, Clariant estimates that by 2030 approximately 20% of chemical sales will be bio-based chemicals.

The 2016 acquisition of Vivimed and strategic investments in Beraca and BioSpectrum enhanced Care Chemicals’ ability to provide natural and renewable ingredients for personal care. Furthermore, these portfolio additions enable Care Chemicals to offer customers a one-stop shop experience with access to the unique Asian and Brazilian cosmetics know-how.

Increased consumer focus on personal well-being and adoption of more sustainable consumption behaviors also impact the home care market. Sustainable building materials, including water-borne paints that are free of air pollutants, hazardous substances, and allergens, are increasingly prioritized. Since keeping track of potentially harmful substances is difficult, consumers rely on eco-labels in their buying decisions. With the company’s label EcoTain®, which awards products with excellent full life cycle sustainability profiles, Clariant clearly signals its commitment to sustainable offerings. Market traction is underscored by the rapid growth of EcoTain® labelled products over others in the portfolio.

sunliquid® awarded EcoTain® label
Watch the sunliquid® movie
Watch the TexCare® movie

»Questions are increasing about how we can live more sustainably.«

Bintan Titisari Textile Designer
Bandung, Indonesia

Not only do industry solutions matter to the Business Area Care Chemicals, but the products are devoted to consumer needs as well. Whether it be in personal care, cleaning supplies, or food, consumer desire for a sustainable lifestyle is gaining speed. And this is a global development. To illustrate, the Discover Value story provides an exemplary look into Indonesia, one of the most densely populated countries. More than just textile exporters, Indonesians themselves are demanding, fashion-conscious consumers, also concerned about sustainability: How are textiles produced? Which raw materials were used? How can I save energy and water during washing? Gone is the era in which the consumer doesn’t think about the effect of his consumption. This market shift means that relevant industries require a quick and satisfying response.

Interview Detergents that preserve textiles

Gabi Ohlendorf, Technical Application Manager, Business Unit Industrial & Consumer Specialties (portrait)
Gabi Ohlendorf Technical Application Manager
Business Unit Industrial & Consumer Specialties

Daily every household around the globe is doing laundry. Consumers increasingly desire a more gentle detergent. Gentle not only on their clothes, but also on the environment. A multifunctional detergent additive like TexCare® can handle these demands. Gabi Ohlendorf, Technical Application Manager at the Clariant Innovation Center in Frankfurt, explains how TexCare® works.

How do people in Europe do their washing?

Gabi Ohlendorf European children love to eat chocolate and spaghetti with tomato sauce. Around the Mediterranean Sea, red pepper and olive oil are very popular and known to be hard to remove. Very tough stains found in all countries are sebum and sweat. In Germany, almost everyone uses front-loader washing machines and the washing temperature is usually 40°C. However, lower temperatures are being promoted in order to save energy and money. Both liquid and powder detergents are commonly used. In some parts of the Middle East and Africa, hand washing also plays a significant role. Soap bars are the common tool for this method of washing.

What does this mean for your daily work?

In our laundry lab, we adapt our tests to the different needs of our regional customers. We can modify the water hardness and perform our tests on different fabrics soiled with various standardized stains. To make the results most meaningful for our customers, we aim to simulate official test setups.

Can you actually prove that a product works?

Soil Release Polymers form a protecting film on the fibers. This can be proven by using special microscopy techniques. For the effect on detergency, we use both visual and photometric assessment of the stains after washing. The physical assessment for sure is more precise. However, in the end we are aiming for an effect that can be seen by the consumer. That’s why it’s important to combine both evaluation methods. The Soil Release effect tested with dirty motor oil is especially impressive and you don’t need to be an expert to see the benefit of TexCare®.

What are the benefits to the consumer?

Soil Release Polymers protect the fabrics from graying and therefore consumers benefit from an increased lifetime of their clothes. Protection from stains, as well as soil-lifting activity, have a positive effect on the washing result. This increased washing power is something the consumers can directly see and enjoy.

Less energy

Due to a more powerful soil-release effect, TexCare® allows the consumer to wash clothes at lower temperatures, resulting in saving both energy and the planet.

Less wear & tear

TexCare® forms a protective layer that allows for lower temperatures and gentler washing. This helps your favorite clothes last longer.

Performance guarantee

TexCare® allows for more sustainable living with no compromise in performance.

Did you know? What does a t-shirt have to withstand?

Frequent washing gradually damages clothes. Everything starts with stains. Fabric stains are dirty marks comprised of fat, protein, starch, and dyes. Usually, these components penetrate deeply, making them difficult to remove. Then the dirt floats in the washing water, penetrates the other fabrics and dazzlingly white t-shirts gradually turn gray. And finally, why do fabrics shrink in the washing machine after every first washing? The answer surprisingly is relaxation: New textiles are stretched before selling. When they are washed in hot water, the fibers relax.

Business Area Value Creation Phases

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To meet ambitious growth and profitability targets, close cooperation with customers, a high level of innovation, and dedicated evidence of sustainability are imperative. The use of renewable materials is a primary focus for Biotechnology research, as demand for environmentally compatible applications grows. Furthermore, since 2016, sustainability is the main focus of all opportunities pursued by New Business Development. At the Sustainability Trend Meeting, which is chaired by New Business Development and takes place two or three times a year, Clariant identifies sustainability challenges that can be developed into new innovation focus fields. In 2016, New Business Development launched the Prelect® TPS Nano Silver Conductive Inks for printed electronics, opening up the sustainability and performance advantages of direct printing of high-conductivity electrical traces to new areas of the Electronics Manufacturing Industry. These nano silver formulations are cost-efficient, high-performance solutions for emerging printed electronics markets such as displays, photovoltaics, and touch screens.

Watch the Prelect® TPS movie

Developing sustainable products from renewable resources without compromising – or even exceeding – performance has been a central innovation goal in 2016. Examples of the focus on high-performing, sustainable products include GlucoPure® SUN, an extension of the renewable glucamide surfactants line that provides superior cleaning performance in hand dishwashing detergents, and TexCare® SRN 260, a multi-functional polymer that allows the formulation of laundry detergents that deliver outstanding cleaning results even under unfavorable washing conditions.

Pressing customer needs are identified via structured customer workshops, particularly in Asia. These workshops help Clariant lay the groundwork for tailored regional and global innovation projects. The Business Unit Industrial & Consumer Specialties is moving global product development capabilities to regions such as Latin America and Asia/Pacific, where hair and skin care industries are setting worldwide trends. With global key customers, Clariant has entered a new phase of collaboration, namely co-location. By creating joint project teams on specific topics and utilizing the laboratory or office facilities of either Clariant or the customer, Clariant can better understand the way customers think, innovate, and operate.

GlucoPure® SUN The sunflower oil based surfactant is the ideal blend for mild hand dishwashing liquid detergents. Its main component has a renewable carbon index of 96%.

Market to Customer Effectively creating and capturing value

In the Business Area Care Chemicals, profound knowledge of market trends and customer and consumer needs is successfully combined with high-performance ingredients and formulation expertise to offer the best value. In addition to comprehensive customer needs analyses, leading market researchers are engaged and expert interviews are conducted to make sure a strong value proposition with clear market positioning is delivered. Value propositions are determined both in technical and marketing terms and include quantified benefits that demonstrate the additional value created by Clariant products. In this regard, Care Chemicals is taking a holistic approach, going beyond purely formulation-oriented advantages and including sensory and emotional benefits. With the VITIPURE® series, for example, Clariant has developed tailor-made solutions for the food and beverage industry that help succeed with a variety of challenges such as sugar reduction, coloring, juiciness, and texture, but also shelf life-extension, protein and fiber enrichment.

VITIPURE®SR VITIPURE®SR solutions enable customers to formulate healthier products by improving the nutritional profile while maintaining sensory characteristics.

In the Personal Care segment in particular, Care Chemicals focuses on providing brandable concepts. For example, customers have greatly appreciated the BeautyForward® platform, which identifies early consumer trends and matches them with products and formulations they can use and customize. Although home care is a mature market, Care Chemicals has succeeded in 2016 by creating and capturing value through carefully pricing innovations. For example, by using the NanoCon® technology, a team in Latin America created a liquid emulsion of Carnauba Wax – used in furniture polishes – that allows the customer to produce in a continuous process instead of the traditional batch-to-batch process. By using the Clariant product – Hostapur® CP – customers were able to reduce production time, save energy, and generate more consistent quality. These benefits were captured in the price point.

BeautyForward® This new inspirational guide decodes current trends to help drive innovation in the Personal Care segment.

Customer to Cash Securing supply chains to compete effectively

A vital aspect of commercial success is ensuring that the product is available where it is needed, in the required quality, at the right time. For that reason, Care Chemicals collaborates closely not only with customers, but also with its suppliers. Trusted relationships ensure more secure supply chains and create added value across the value chains. Regarding sustainability in particular, value chain transparency is a key differentiating factor. Sourcing sustainable palm oil is of particular importance to Care Chemicals since it is the most widely used renewable material. In 2016, Clariant achieved mass balance certification by the Roundtable for Sustainable Palm Oil (RSPO) for all production plants. A stringent process was implemented to identify single raw material supply situations and assess the associated operational and business risks in order to mitigate any issues. The initiative will become a fully-fledged supplier development process in 2017. The objective is to combine the sourcing and operations know-how to qualify new suppliers more quickly, increase competition, and avoid higher costs.

In order to ensure cost competitiveness, Care Chemicals is working on cost reductions in operations by improving productivity and offsetting inflation. Key measures include the application of asset-light backward integration models for raw materials, life cycle innovation projects for the existing product portfolio, and »fill the mill« task forces. Furthermore, a global inventory task force has been set up to optimize stocks in consideration of cash flow, global asset footprint, and lead times, as well as customer requirements.

Over the course of 2015 and 2016, investments in major growth regions in Asia and North America have been finalized. Besides new capacities in China and Indonesia, two production lines for Ethoxylates that almost double the capacity in the United States were started in North America. In all production sites, Care Chemicals emphasizes good manufacturing practices. To support the goal of continual safety and security improvements, tailor-made safety awareness workshops have been developed based on the analysis of the accident and incident reporting.

Ethoxylates Ethoxylated products including Polyethylene Glycols (PEGs) are a cornerstone of the growth strategy in the Americas.

Business Area Key Performance Indicators

Business model

Care Chemicals transforms capitals for additional value creation.

business model

Targets

4–5%

Growth potential per year

18–19%

EBITDA target margin

Input

Performance
3% R&D spend of sales
771 Raw material procured
in CHF m
80 Active innovation projects
People
30326 Training hours
1217 Raw material suppliers
Planet
12 Production sites (in scope of current performance reporting)
3317 Number of raw materials procured
745 Energy consumption
in m kWh

Output

Performance
1465 Sales in CHF m
5% Growth in local currencies
18.8% EBITDA margin before exceptional items
People
2574 Staff in FTE at year end
(2015: 2 321)
91% Customers want to continue doing business
84% Customers plan to intensify business relationship
Planet
0.95 Production volume
in m t
209 Greenhouse gas emissions
in kg/t production
26.8 Waste in thousand t
  • Financial capital
  • Intellectual capital
  • Human capital
  • Relationship capital
  • Manufactured capital
  • Natural capital