How Plastics & Coatings Creates Value
Through continuous innovation, Plastics & Coatings satisfies the increasing demand for sustainable products while also meeting stricter regulations. By tracking megatrends and engaging with customers, the Business Area develops solutions tailored to each market. Continuous improvements to the supply chain ensure a reliable, steady supply of raw materials, which support the On-Time, In-Full deliveries of finished products that are critical to Clariant’s profitability.
001 PLASTICS & COATINGS
1. Creating promising business opportunities from demand for sustainable products and stricter regulations
Plastics & Coatings is increasingly challenged by rising environmental awareness. Customers ask for products that are free of hazardous substances or feature renewable raw materials. In addition, new regulations and toxicological reclassifications regarding ingredients such as biocides and impurities such as heavy metals, amines, and polychlorinated biphenyls (PCBs) are necessitating the development of alternative products. In food packaging, products free of allergens or genetically modified organisms (GMOs) are also being requested. To proactively adapt or develop solutions, Clariant closely monitors legislative developments that could ban or impact the use of critical substances.
Fueled by increasing awareness of the persistence of plastics in the environment, particularly in the oceans, the circular economy is poised to have the largest impact on the plastics industry in recent history. Read more In response, bio-based and bio-compostable products are gaining in popularity as potential solutions. Clariant is addressing the persistence of plastics by promoting improved recyclability and usage of biomaterials in its product development cycle. In 2018, Clariant also joined the Plastics Recyclers Europe Association (PRE) as well as the Responsible Packaging Coalition in South East Asia.
»The key challenge is that the industry needs to connect along the value chain to develop tangible solutions adressing various circular economy topics.«
JOCHEN AHRENS Head of Global Marketing & Innovation Business Unit Masterbatches
Together, increased environmental awareness and the trending circular economy are driving demand for sustainable products and creating opportunities to accelerate product-related innovation and sustainable growth. In addition, a globally growing middle class and the advance of the Internet of Things further support sales growth. For example, as demand for electronic devices for smarter homes and smarter cars rises, so does demand for safe flame retardants.
Idea to Market
2. Innovating for a sustainable future
In 2018, Business Unit Additives made strong progress in transforming to a more market-driven organization by advancing innovation and sustainability collaborations with its customers. This was supported by intense technical consultation and development to address new technical requirements in markets affected by digitalization, such as solutions for smarter homes, smarter cars, and mobility. Additives increased its offering of EcoTain® products to 32 Read more and expanded partnerships for more sustainable value chains. One example is the introduction of Licocare® RBW, a high-performing lubricant, which is based on a renewable and non-food-competing by-product of the rice oil production. Another example is the partnership with Neste, which will result in further possibilities to produce additives based on renewable materials. The Business Unit also engaged in the development of new additives to substitute for persistent, bio-accumulating, and toxic substances (PBT). Clariant’s flame retardant product portfolio, already known for being halogen-free, was further strengthened by improving processability, durability, and electrical properties. Future developments will enable highly efficient recycling processes that align with goals of the circular economy.
In 2018, Business Unit Masterbatches placed sustainability at the core of its innovation activities and entered a collaboration with »We are Spindye«, a company that colors textiles by dyeing yarn prior to weaving rather than bathing finished products in color dye. Its innovative process greatly reduces water usage, water contamination, and energy consumption, making it an effective alternative to conventional dyeing and a promising pathway for the textile industry to reduce its environmental footprint. Another major innovation project for this Business Unit was the development of oxygen barrier technologies for polyethylene terephthalate (PET) and polyolefins, both of which are used in food packaging. The technology is expected to prolong shelf life of packaged products and reduce food waste.
Business Unit Pigments focused its innovation activities on increasing product safety and adapting to regulatory changes. In addition, to improve the cost structure of the product portfolio, the Business Unit investigated process innovation and examined technologies such as micro reactors and process automation. This supports growth targets, while simultaneously increasing sustainability of products and production processes.
Performance, Intellectual CapitalMarket to Customer
3. Launching products successfully
In 2018, Business Unit Additives launched the flame retardant Exolit® OP 945, a micronized version suited for adhesive layers used, for example, in the electronics sector. Due to miniaturization of electronic equipment, these layers have become ever thinner requiring that flame retardants adapt in size as well. Another launch was the 100% polymer adhesive Licocene® PP 2502 for mattress construction, which enabled the production of the first EcoTain®-labeled mattresses. Licocene® PP 2502 is purer, less energy-consuming, and can be based on renewable monomers – clear advantages when comparing the product with conventional alternatives. Several new solutions were launched under the AddWorks® brand, for example, AddWorks® PKG 906, which enhances post-manufacturing waste recycling in polyolefin films for packaging.
Near-infrared (NIR)
NIR spectroscopy is used in plastics recycling. Typically, black colored plastic blocks NIR and thus hinders the recycling process. Clariant developed a NIR-transparent black color to avoid this problem.
In order to increase and simplify plastics recycling, Business Unit Masterbatches successfully developed a near-infrared (NIR) transparent black color, which enhances sorting of black plastic articles in recycling plants. Black-colored articles typically blind the NIR detectors, potentially contaminating waste streams. This breakthrough solution helps to solve this problem.
Business Unit Pigments worked on reformulating pigment preparation ranges. Tangible outcomes include future-oriented formulations of Colanyl® 500, Hostatint™ 500, and Hostafine® pigment preparations for decorative and wood coatings, meeting the latest and upcoming environmental and application requirements. In Latin America, new tailor-made Agrocer preparations for seed coloration were launched to fulfill the unmet customer need regarding technical performance and batch-to-batch quality consistency.
4. Engaging with customers
Gaining insights into customer demands and expectations is paramount to business success. To acknowledge the importance of marketing and customer relations, the new Leading Marketing Organization (LMO) has been implemented within Business Area Plastics & Coatings. The LMO strengthens business segment focus with commercial and technical marketing. Read more
In 2018, Business Unit Additives further strengthened its go-to-market organization by widening its portfolio as well as its technical and marketing capabilities. This resulted in several customer collaborations for joint innovation or sustainability projects. Particularly through collaborations with specifiers along distinctive value chains, new insights were shared and initiatives started in order to find answers to future challenges.
»We increased our market insight and customer intimacy with strong value propositions along sustainability and innovation as well as intense value chain collaborations.«
Wolfgang Wanzke Sustainability Manager Business Unit Additives
In 2018, Business Unit Masterbatches attended several industry-specific fairs in order to strengthen customer relationships and enable experience of new products, and hosted customer days in various countries. Customer feedback solicited through the Clariant 2018 customer survey will also help to continuously improve and tailor solutions to customer needs.
Business Unit Pigments focused on the introduction of the LMO and strategic key account management process in 2018. Both will lead to a better understanding of market trends and demands, resulting in more collaborative projects with customers. In addition, Business Unit Pigments offered technical training to its customers’ new staff, for which demand was high.
The 2018 customer satisfaction survey underscored the importance of »Technical Services«, which were rated as the second most important buying criterion, right after »Products and Packaging«. For the latter, Plastics & Coatings maintained its high satisfaction score of 83 points (2016: 83), while the score for »Technical Services« decreased slightly to 75 points (2016: 77). Overall customer satisfaction reached 76 points (2016: 78), while the Customer Loyalty Index scored 80 points (2016: 84).
83
Plastics & Coatings maintained a high satisfaction score of 83 points in the category »Products and Packaging« of the customer satisfaction survey 2018.
Customer to Cash
5. Securing raw material availability
Having a safe and reliable supply chain is crucial for a seamless Customer to Cash process. Read more In 2018, a supplier dashboard that collects and updates relevant information was introduced, enabling rapid screening of factors such as price, lead time, environmental performance indicators, and, if existing, possible connections to indicators of child labor and conflict minerals.
Availability of raw materials and intermediate products posed a challenge to Plastics & Coatings in 2018. Stricter environmental regulations in producing countries, such as China and India, as well as several forces majeures led to supply shortages, impacting Clariant’s ability to ensure supply security to customers. In order to increase flexibility, Plastics & Coatings implemented several countermeasures. For example, sourcing strategies were expanded to include multiple suppliers for the most important raw materials and de-specification of raw materials was advanced, enabling Plastics & Coatings to use alternative feedstock for some products and reduce dependence on other raw materials.
6. Increasing reliability of the operational chain
Market dynamics require continuous improvement of the operational chain as well as reductions in delivery time. Plastics & Coatings worked on several measures in 2018 to advance these topics.
Business Unit Additives invested in expansions of existing plants as well as the commissioning of two new plants in China. Supply chain upgrades included capability building and process enhancements regarding planning, logistics, and communication. In addition, new digital tools were evaluated to improve processing and information flow.
Business Unit Masterbatches started a project to evaluate the possibility for customers to place and track orders online, which will enable customers to receive regular, real-time updates on the order status.
Business Unit Pigments initiated project »Clockwork« in order to improve effectiveness and efficiency of the end-to-end supply chain, which will lead to optimized transparency, reliability, and predictability as well as improved inventory levels and lead times.
7. Ensuring safe operations
Plastics & Coatings is committed to protecting employee safety, health, and well-being and aspires to the company-wide goal of zero accidents. Within the Avoiding Accidents program, managers and employees are trained to optimize safety behavior and culture to reduce accidents that cannot be eliminated technically. Read more
Business Unit Additives has intensified its awareness program with behavioral training, safety checks, and accident avoidance projects. By implementing and providing management support for a stringent safety focus in all plants, Business Unit Masterbatches significantly improved safety performance in recent years, which shows in the stark decline of the Lost Time Accident Rate (LTAR) of 4.6 in 2008 to 0.11 in 2018. In the future, local, regional, and global standards will be harmonized in order to apply the strictest safety regulations across all operations. Business Unit Pigments implemented site-specific programs to improve overall accident and incident rates, e.g., physical exercises to improve overall fitness and body awareness in Suzano, Brazil, and Shizuoka, Japan, or awareness trainings regarding walking, ascending and descending stairs, stumbling in Höchst, Germany, near miss recording, analysis and deduction of specific measures in all sites. Additional refresher training such as the Clariant Safe Behavior Training (CSBT) as well as Safety Moments at the beginning of each meeting and the Avoiding Accidents at Clariant Program further raise awareness among employees.
8. Improving environmental performance
Plastics & Coatings is focused on achieving Clariant’s Environmental, Safety and Health (ESH) targets. Read more Production processes and workflows are constantly reviewed and optimized for improved environmental performance.
All European facilities of Business Unit Additives are certified with the Energy Management system ISO 50001. Plants to be commissioned and built outside of Europe will be certified in due course. Specially trained energy managers drive energy efficiency enhancement projects, waste avoidance, closed-loop manufacturing, and carbon footprint reduction.
Business Unit Masterbatches applies three layers of environmental protection. First, strict compliance with all local regulations, laws, and permits of the production sites is ensured. Second, Clariant’s ESHA guidelines, which typically go beyond local regulations, are followed at all sites. Third, all production sites operate along ISO 9001/14001 standards.
Within Business Unit Pigments, numerous projects to save energy, reduce waste, and use chemicals in a more efficient and sustainable way are being conducted. These projects are part of Clariant’s long-term oriented excellence programs such as the Production System Yield, Energy, Environment (YEE) and Clariant Production System (CPS).
Performance, Production volumeTargets 2021
Growth potential per year
Input
Performance
1.4 %
R&D spend of sales
1 149
Raw material procured
in CHF m
> 105
Active innovation projects
62
Production sites
15 305
Number of raw materials procured
People
28 459
Training hours
4 746
Raw material suppliers
Planet
9522
Energy consumption in m kWh
Output
Performance
2 703
Sales in CHF m
1 %
Growth in local currencies
15.2 %
EBITDA margin before exceptional items
0.361
Production volume in m t
People
6 793
Staff in FTE at year end
(2017: 6 759)
Planet
482
Waste in thousand t
7742
Greenhouse gas emissions
in kg/t production
1 For 2018, the production volume is based on a reduced reporting scope, which includes sites that are responsible for 95 % of total production.
2 Every three years, Clariant validates environmental data from all production sites. The last full reporting campaign was in 2017. In interim years, including 2018, the reduced reporting scope comprises the larger sites responsible for 95 % of production.
In 2013 Clariant adjusted its reporting segments and grouped its businesses with similar end-user markets and growth drivers into four distinct Business Areas: Care Chemicals, Catalysis, Natural Resources, and Plastics & Coatings. View entire glossary
These are plastic additives in the form of granules with dyestuffs or other additives used to dye or alter the properties of natural plastic. View entire glossary
The pool of funds available to the company for use in the production of goods or the provision of services. This can include funds obtained through financing, such as debt, equity, or grants, and funds generated by the company, for example through sales or investments. View entire glossary
Knowledge-based intangibles used and created by the company, often in collaboration with partners. This can include intellectual property, such as patents, trademarks, copyrights, software, rights, and licenses, and »organizational capital« such as tacit knowledge, systems, procedures, and protocols. View entire glossary
Manufactured physical objects such as buildings, equipment, and products. These can include objects that are available to the company for use in the production of goods or the provision of services, or that the company produces for sale to customers or for its own use. View entire glossary
The company’s staff and its composition, competencies, capabilities, experience, and motivation to innovate. This can include employees’ alignment with corporate values and their ability to understand and implement the company’s strategy. View entire glossary
Key relationships including those with significant groups of stakeholders and other networks. This can include shared values, the trust and willingness to engage that the company has developed, and related intangibles associated with its brand and reputation. View entire glossary
Renewable and nonrenewable environmental resources and processes that support the past, current, or future prosperity of the company or are affected by it. Examples can include resources related to air, water, and land that are utilized or impacted for example by emissions. View entire glossary