Idea to Market

3.1. Three focus themes and new business fields

In 2017, the innovation efforts of Industrial & Consumer Specialties focused on three main themes:

1. Providing »smart solutions« that allow customers to differentiate with highly efficient and cost competitive formulations. This needs in-depth understanding of structure-effect relationships, supported by collaboration with partners such as the Leibniz Institute of Polymer Research Dresden (IPF).
2. Continuously shifting toward a more sustainable product portfolio by focussing on an improved renewable carbon index (RCI), which measures how much a product is based on renewable rather than fossil-fuel sources – an index of interest to key global accounts – and on the responsible and sustainable sourcing and use of renewable raw materials. As an example, Clariant has certified all its relevant production sites and is able to offer its customers sustainable palm oil derivatives certified according to the criteria of RSPO (Roundtable on Sustainable Palm Oil).
3. Anticipating regulatory changes and proactively developing compliant alternatives. For example, regulation on preservatives is increasing and Clariant focused innovation on boosters that allow customers to lower preservative concentrations and new products that support »preservative-free« claims.

Key developments in 2017 were the inauguration of the new crop greenhouse, which received very positive early feedback including joint development proposals from customers, and the launch of the new Active Ingredients Unit  to develop new powerful solutions enhancing performance and user experience in skin, hair and body care. Clariant also continued to setup R&D facilities into global trend-setting markets such as Asia Pacific for skin care or Latin America for hair care where Clariant operates its Hair Care Competence Center in Brazil, the most diversified and fastest growing region for hair care in the world.

»Our new Active Ingredients Unit is a flexible start-up to rapidly launch active ingredient innovations that meet the highly specialized product development needs of our customers and end consumers.«

Christian VangHead of Business Unit Industrial & Consumer Specialties

New Business Development strives to convert promising innovation ideas which are beyond the scope of the Business Units into profitable business. In order to make sure that new businesses can be successfully integrated into established processes, businesses are developed until they are in the market and have a proven value proposition, market channels and marketing approach. Current activities include food ingredients solutions with a special focus on helping food companies increase the health of their products with sustainable ingredients, tailored materials for 3D printing leveraging Clariant’s broad portfolio of pigments and additives, silver nanoparticle containing inks for the electronic industry and encapsulated active ingredients for the Personal Care industry, such as Vitispheres®.

Market to Customer

3.2. Clear claims and sharper focus to support value capture

In 2017, Industrial & Consumer Specialties simplified the portfolio by 20% through pruning old technology to bring more clarity to the product offerings and reduce complexity cost. In addition, the product launch process was revisited to emphasize value propositions. For example, in personal care the effect of products from an end-user standpoint were documented and in home care the mode of action of product molecules was substantiated using Electron Magnetic Resonance (EMR) facilities. Key accounts recognize Industrial & Consumer Specialties as a strategic, innovative supplier and customer satisfaction and retention further increased in 2017.

Care Chemicals further developed its comprehensive value-based pricing strategy, which focuses on end-user benefits rather than cost. For example, Genamin® Gluco 50 is currently the only label-free, renewable-based amine for paint neutralization on the market that is free of volatile/semi-volatile compounds (VOC/SVOC). It is an ideal ingredient for paints that are certified with an ecolabel, such as the German Blue Angel, the U.S. GreenSeal, or the Chinese TenRing. Its outstanding sustainability profile was recognized in 2017 with the prestigious Ringier Technology Award in China for the category Coatings Additives. Price strategy for Genamin® Gluco 50 is not based on simply being a substitute for a typical additive, but on the value of its stabilization properties and the new VOC-free claim.

In addition, Care Chemicals explores innovative go-to market routes with digital applications that help customers qualify their needs, navigate the offerings, and select the right product. Examples include the paints and coatings and crops segments, where formulation complexity and regulatory requirements are increasing, and personal care where the »Clarify« mild surfactants product navigator will be launched. In addition, to simplify order placements for routine products, Care Chemicals will open an online customer center starting with industrial applications.

Customer to cash

3.3. Increasing capacity and ensuring process safety and systems integration

In 2017, a key focus in production was broadening the technology portfolio, increasing capacity, and improving competitiveness. In Tarragona, Spain, Industrial & Consumer Specialties is building an integrated production plant for the Squalene/Squalane product portfolio. Squalane and Squalene are used in a variety of cosmetics as a natural moisturizer and are mainly produced from shark livers or olive oil distillates. The now fully integrated process in Tarragona will be based exclusively on non-edible olive oil distillates as a true renewable resource. An additional step forward is the full integration of all production steps at a single location, which will reduce the transportation distances along the value chain by a factor of 10, while improving quality and safety. In the major growth regions Asia and North America, the focus was to ensure benefits from strategic investments. For example, the cGMP pharmaceutical quality qualification is in full swing for pharma polyethylene glycol products at Huizhou, China, and the two new production lines for Ethoxylates at Clear Lake, Texas, that almost double capacity in the United States are already close to full utilization.

To maintain and even further improve high safety standards, 20 tailor-made safety awareness and leadership workshops have been conducted at the sites in Germany, Brazil, China, Japan, and India. Also, a dedicated logistics cost optimization project was set up in collaboration with the Clariant Supply Chain System (CSS) to identify cost saving potential. The pilot in the Europe, Middle East and Africa region already revealed significant cost saving potential of CHF 4.7 million per year, and global roll-out, including deep-dive analyses on outbound freight and supply chain costs, is planned.

In 2017, New Business Development focused on how to effectively and efficiently set up new businesses while ensuring optimal integration with existing systems. Since agility is key for taking advantage of emerging opportunities, standardization and flexibility need to be well balanced. Making optimal use of Clariant Excellence tools and leveraging the Clariant sales organization for new business offerings beyond established channels, such as leveraging digital marketing for a more effective and targeted customer acquisition as well as establishing an e-commerce site to support the sales of 3D printing materials.