In 2017, Clariant continued its efforts to make the product portfolio more sustainable, awarding 18 products the EcoTain® label for outstanding sustainability performance. It also increased the share of renewable raw materials in procurement, underscoring the commitment to sustainability throughout all business activities. Clariant expanded production capacity with several new facilities and considerable investments in high-growth regions, such as China.

3.1. Product stewardship/sustainable chemistry

Protecting customers, consumers, and the environment by providing safer and more sustainable solutions is one of Clariant’s top priorities. Therefore, ensuring compliance for its products is key. Product Stewardship contributes to the safety and legal compliance of products through carefully managed assessment, testing, and customer engagement processes.

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Management Approach Product Stewardship and Sustainable Chemistry

Clariant’s approach to product stewardship is globally oriented. Local and regional Product Stewardship teams are an integral part of a Global Product Stewardship organization, supporting business and external customer communication. Clariant also monitors and assesses the impact of changes in chemicals management regulations worldwide in order to be prepared for any shifts in the regulatory landscape.

Clariant is fully committed to the REACH targets: the company continuously prepares and submits required information for the successful registration of substances that are under the scope of the third phase of the EU REACH regulation. Clariant has put in place clear targets and management processes to meet the upcoming May 2018 registration deadline. In 2017, information for 85 % of all relevant substances was submitted. Clariant is on track to register 100 % of applicable and relevant substances in 2018.

Clariant goes beyond mere compliance: In a Cefic (European Chemical Industry Council) LRI (Long Range Research Initiative) project, its Toxicology & Ecotoxicology group has initiated and co-developed the so-called AMBIT tool — a new IT-based system on a predictive toxicity model. AMBIT helps predict the unknown properties of one chemical using the known properties of similar chemicals. The European Chemicals Agency (ECHA) supports this tool by giving access to non-confidential registration data.

Beyond product safety, screening for sustainability is a mandatory step for all major product development projects at Clariant. Under the Portfolio Value Program (PVP), Clariant systematically assesses its product portfolio for strengths and weaknesses in terms of sustainability by taking impacts across the entire life cycle into account. The product portfolio is screened for sustainability performance on 36 criteria that consider all three dimensions of sustainability: performance, people, and planet. Clariant awards products that show an excellent sustainability profile based on the PVP criteria with its EcoTain® label. These products are nominated by Business Units and undergo the scrutiny of the internal EcoTain® panel, comprised of representatives from Corporate Sustainability & Regulatory Affairs (including relevant Product Stewardship experts), Group Technology & Innovation, and Group Communications.

In 2017, 18 products were awarded the EcoTain® label, bringing the total number of Clariant products branded with this sustainability excellence label to 169. As for the overall product portfolio, Clariant announced in its Sustainability Dialog held in Frankfurt in 2015 that 80 % of its product portfolio had been screened for sustainability performance since the inception of the program in 2012. This evaluation determined that 75 % of the product sales being considered meet Clariant’s sustainability definition, while 25 % are targeted for improvement opportunities. Roadmaps for these improvement opportunities include, among other objectives, a focus on reducing hazardous substances across the Clariant products portfolio. As examples, in 2017 Clariant’s Business Unit Oil & Mining Services began to proactively offer alternatives to the use of nonylphenol-ethoxylates, in anticipation of possible future regulatory requirements. In 2015, Clariant’s Business Unit Masterbatches committed to gradually phase out the use of heavy metal–based pigments in its masterbatches and offer its customers alternatives. Progress is ongoing, with phase-out already achieved in Europe and North America in 2016 and good progress in several sites in the regions Latin America, Middle East, Africa, and Asia Pacific during 2017. Focus and progress will continue in 2018.

EcoTain® Partnerships will be established as a new standard in sustainable value chain collaborations.

During 2017, the EcoTain® label was further promoted. At the request of customers and in a joint effort to bring more sustainable products and solutions to the market, customers purchasing EcoTain® products piloted and successfully launched the use of the EcoTain® label on their own products during 2017. By highlighting their use of EcoTain® as a sustainable ingredient in their offerings, Clariant’s customers are supporting the growth of the brand. This initiative illustrates the recognition given to the EcoTain® label and Clariant’s work in positioning and offering safer and more sustainable products to the market.

To further roll out their initiative to promote sustainability in the market and society in general, Clariant is also piloting EcoTain® Partnerships, a standard for establishing value chain collaborations on sustainability. The partnership model outlines criteria for ensuring business and sustainability benefits and will be launched to the public in 2018. For an example of model elements, please see the SPOTS project.

3.2 Production volume and products

In 2017, production volume, which represents finished goods that left production sites and were sold to customers, increased by 12.5 % to 4.60 m t. With 3.11 m t produced goods, Business Area Natural Resources accounts for around two-thirds of the total production volume. While all four Business Areas contributed to the rise in total production volume in 2017, additional production of 0.34 m t by Business Area Natural Resources is responsible for the largest share. Business Area Care Chemicals was able to increase its production volume from 0.95 m t in 2016 to 0.96 m t in 2017. Compared to the previous year, Business Area Plastics and Coatings enlarged its production volume by almost 40 % to 0.46 m t and Business Area Catalysis by 50 % to 0.06 m t. More than 40 % of production volume is manufactured in plants that implemented an ISO 50001 certified energy management system.

3.3. Raw material procurement

The use of renewable materials is increasingly important in the chemical industry due to the growing demand from customers and consumers. As a sustainability leader in the chemical industry, Clariant prioritizes responsible procurement of renewable raw materials, increased use of renewable raw materials in products, and development and production of innovative bio-based chemicals and biofuels.

In 2017, Clariant bought goods and services worth approximately CHF 3.9 billion. Of this, roughly CHF 2.7 billion was spent on raw materials from around 7 000 suppliers. Clariant purchased over 36 500 types of raw material, with 35 % of the total raw materials representing 20 major commodities and approximately half representing 30 other products. In total, 200 raw materials make up 95 % of the purchased volume. Around 23 % of the raw materials purchased currently originate directly or indirectly from crude oil, more than 16 % are derived from natural raw materials such as bentonite, and 5.8 % are from renewable raw materials.

Clariant favors purchasing goods and services from the region in which the company or the production site is located, as long as the quality is compatible, and the purchase is technically and economically feasible. In doing so, Clariant’s activities support the economic development of the respective regions.

3.4. Production sites and innovation facilities

3.4.1. Expanding the production sites network

At the end of 2017, Clariant’s production network consisted of 125 production sites in 39 countries. Compared to 2016, the total number of production sites increased by five: two new sites were opened in the U.S. acquired in 2016 by Business Unit Oil & Mining Services are now included in the reporting, and one site is taken out as it is now only a warehouse activity. In Surabaya, Indonesia, Clariant opened a new bleaching earth production site for its Business Unit Functional Minerals that increases regional production capacity for bleaching earth by 35 %. Additionally, the new site’s infrastructure facilities make it possible to increase value to customers through shorter lead times. A new site in Bonthapally, India was acquired for Business Unit Industrial & Consumer Specialties in 2016, and is the first time included in the reporting. In Cuddalore, India, Clariant opened a healthcare packaging production site for its Business Unit Masterbatches. The new site not only augments Clariant’s production capacity for desiccant canisters, it also adds to Clariant’s ability to meet Business Continuity Planning (BCP) requirements of global customers by producing identical products at multiple sites worldwide. As production starts only in 2018 this site is not yet included in the 2017 reporting.

3.4.2. Investments in China

Clariant underscored its commitment to Asia with a multi-million CHF investment by its Business Unit Additives to ensure local manufacturing in China of solutions for the plastics, coatings and inks industries. The expansion will enable Clariant to shorten supply lead times and deliver customized, high-tech solutions more rapidly in this region. The new facilities at Clariant’s well-established site in Zhenjiang are expected to come online in 2018. Clariant also bought land in China’s Hebei province, together with Tiangang Auxiliary Co., Ltd., a privately owned producer and leading supplier of light stabilizers, in order to build a production facility for joint manufacturing of process and light stabilizers. Production is scheduled to begin in the first half of 2019 and will initially focus on textile-related stabilizers and solutions for the automotive industry. In 2017, Clariant also came to an agreement with Xuzhou HaiDing Chemical Technology Co. Ltd. to develop a custom-built CATOFIN® catalyst and propane dehydrogenation (PDH) unit in cooperation with its technology partner CB&I. The unit, which will be built in China’s Jiangsu Province, is designed to produce 600 kilotons of propylene per year, based on Clariant’s CATOFIN® catalytic dehydrogenation technology. (Chapter The Voice of China Becoming More Important)

3.4.3. Further step for the commercialization of bio-ethanol, licenses, and enzymes

In 2017, Clariant approved the investment in a new full-scale commercial plant in southwestern Romania to produce cellulosic ethanol from agricultural residues using its sunliquid® technology. The flagship plant will have an annual production capacity of 50 000 tons, confirming competitiveness and sustainability of the sunliquid® technology at commercial scale. The plant is anticipated to deliver its first batch of product in 2020. At full capacity, the new plant will process approximately 250 000 tons of wheat straw and other cereal straw annually. Peak sales from the sunliquid® cellulosic ethanol plant are expected to be in the mid double-digit million range.

3.4.4. New Research & Development and Technical Centers

Clariant operates a strong innovation infrastructure consisting of eight Research & Development Centers in North America, China, India, and Europe, and more than 50 Technical Centers in Europe, North and Latin America, India, and China. In 2017, Clariant opened its first Competence Center for haircare ingredients in Sao Paulo, Brazil. This Competence Center positions Clariant closer to leading users, producers, and experts of haircare products and enables a better understanding of the varying needs across differing hair properties. In Tokyo, Japan, Clariant opened a new laboratory dedicated exclusively to supporting Japan’s Personal Care industry. Located inside the Tokyo Metropolitan Industrial Technology Research Institute (TIRI), the new laboratory offers local customers easy access to technical facilities and expertise to boost their research and development activities.