3. Manufactured Capital

Market to Customer

In 2018, Clariant took further steps to improve the sustainability of the product portfolio. It awarded 24 products the label, increasing the total number of products with proven sustainability excellence to 193. By piloting the first EcoTain® Partnerships, the company also underscored its commitment to solving sustainability challenges along the value chain in a collaborative way. In addition, production and research capacities were expanded considerably in 2018, with significant investments in high-growth regions, such as China and North America.

193

Clariant awarded a total number of 193 products with the EcoTain® label.

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Overview of Manufactured Capital

 

  

2018

  

2017

  

Change in %

1

For 2018, the production volume is based on a reduced reporting scope, which includes sites that are responsible for 95% of total production.

EcoTain®-awarded products

  

24

  

18

  

33.3

Research & Development Centers

  

8

  

8

  

0

Technical Centers

  

>50

  

>50

  

0

Countries with production facilities

  

39

  

39

  

0

Production sites

  

125

  

125

  

0

Raw materials procured (in m t)

  

3.57

  

3.14

  

13.7

Production (in m t)

  

4.341

  

4.60

  

—

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. In 2018, it took further steps to comply with the EU REACH regulation and promote the EcoTain® label, which designates products with outstanding sustainability properties.

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3.1.1. EU REACH

In 2018, Clariant successfully completed Phase 3 of EU REACH by submitting 100% of the necessary dossiers to the European Chemicals Agency (ECHA). Clariant continues to register newly manufactured or imported chemicals in accordance with the REACH regulation.

EU REACH
REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) is a regulation of the European Union, adopted in 2007 to protect human health and the environment from potential risks posed by chemicals, while enhancing the competitiveness of the European chemicals industry.

Since the adoption of EU REACH regulation ten years ago, Clariant has submitted more than 1 200 dossiers for chemical substances that need to be kept up to date. Currently, the focus under the EU REACH regulation is shifting toward assessing the safe handling of substances, which requires Clariant to respond to requests for additional information and react to assessments of the registered substances. This also includes demonstrating efforts taken to communicate information on safe handling of products throughout their entire life cycle along Clariant’s value chain. In 2018, Clariant launched its REACH 2018+ project, which fosters awareness for the REACH requirements in all relevant Business and Service Units to ensure future compliance.

Clariant is also active in promoting the safe use and management of chemicals across the entire value chain and ensuring compliance with REACH obligations. In addition, Clariant is represented in various trade associations, such as the European Chemical Industry Council (Cefic) and the German Chemicals Industry Association (VCI), and has taken leadership roles in workstreams relating to chemical management. As an example, the memorandum of understanding between Cefic and the European Chemical Agency (ECHA) was signed in 2018 during the tenure of Hariolf Kottmann as Cefic president.

3.1.2. Portfolio Value Program

In 2018, Clariant continued to screen innovative products before commercialization and revise existing product screenings to ensure high screening coverage.

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Product Stewardship/Sustainable Chemistry1

 

  

2018

  

2017

  

Change in %

1

The displayed data excludes Business Unit Masterbatches.

EcoTain®-awarded products

  

24

  

18

  

33.3

Cumulative number of EcoTain® products

  

193

  

169

  

14.2

Sales-based share of product portfolio screened for sustainability performance (since 2012) (%)

  

80

  

80

  

0

Sales-based share of screened products not meeting internal sustainability definition (%)

  

9.0

  

9.4

  

–4.3

In 2018, the screening coverage of the portfolio was maintained at 80%, reflecting Clariant’s efforts to assess new products. Likewise, the increase in total number of EcoTain® products showcased how innovation fuels sustainability excellence and vice versa. Innovation also helps to capture the sustainability improvement opportunities uncovered in the portfolio screening.

Among other objectives, roadmaps for these improvement opportunities focus on reducing the use of certain hazardous substances in Clariant’s product portfolio. The roadmaps typically promote alternatives that go beyond relevant regulations, which is particularly important in regions where regulatory action is lagging.

As part of such a roadmap, Clariant supports the substitution of heavy metal pigments and, given the strong portfolio and expertise of Business Unit Pigments, is in an excellent position to promote alternatives. As a result of these roadmap activities, the share of products that do not meet Clariant’s internal sustainability definition further declined in 2018.

Clariant also strengthened its reporting capabilities to link the financial performance of products with their sustainability performance. The results of the PVP Financial Reporting complement the traditional financial reporting and support decision-making toward increased sustainability and financial performance.

3.1.3. EcoTain®

During 2018, the ® label was further promoted through additional EcoTain® licensing discussions, a concept that had been launched in 2017. In a joint effort to bring more sustainable products to the market, customers purchasing EcoTain® products piloted the use of an EcoTain® label on their own products. For example, an Indonesian mattress producer used Clariant’s EcoTain®-awarded hot melt adhesive Licocene® to reduce volatile hydrocarbons and odor emissions in their mattress core. As these emissions occur during the production and use phases, the new solution benefits the health of employees and consumers alike. Additionally, using Licocene® reduced the carbon footprint of the mattress production. Given this strong sustainability performance, after a strict evaluation process, this customer received the license to use the EcoTain® label on its own products and in its marketing materials. By highlighting EcoTain® as a sustainable ingredient in their offerings, Clariant’s customers not only promote the safety of their own products, but also support the recognition of the EcoTain® brand as a safer and more sustainable product.

The Portfolio Value Program (PVP) and the EcoTain® label

In 2012, Clariant developed the Portfolio Value Program (PVP) in cooperation with the Collaborating Centre on Sustainable Consumption and Production (CSCP), founded by the United Nations Environment Program (UNEP) and the Wuppertal Institute. The program is based on a thorough analysis of sustainability trends and needs, as well as on the input and views of external stakeholders. The PVP provides the overarching framework to develop Clariant’s product and innovation project portfolio toward more innovative and sustainable products. At the heart of the PVP lies Clariant’s ambition to steer the product portfolio toward solutions that add value through sustainability for customers and society, while also ensuring long-term profitable growth. Clariant continues to be inspired by the opportunities to raise the bar in sustainability that are brought about by societal changes, market trends, existing and future regulations, customer preferences, and stakeholder expectations.

Clariant uses the comprehensive screening of the PVP to further clarify the sustainability performance of its product portfolio with its distinguishing EcoTain® label. Products awarded the EcoTain® label must have best-in-class sustainability performance in at least one of the 36 criteria, offer benefits in several product life cycle phases, and not have any significant adverse environmental or social impacts. A corporate panel of experts reviews all products in Clariant’s portfolio and awards flagship products with the EcoTain® label. At the end of 2018, 80% of the product portfolio was screened for its sustainability portfolio and 193 products were awarded the distinguishing label.

SUSTAINABILITY CRITERIA
36 criteria grouped into six categories are considered in the Portfolio Value Program (PVP) to screen the product portfolio for sustainability.

Cash flow 2017 (bar-chart)

To further rollout its 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 that highlights the importance of partnerships to solve sustainability challenges. It also draws attention to outstanding collaborations on sustainability and shows appreciation to the employees who go the extra mile to deliver sustainable value. In 2018, Clariant advanced the development of possible EcoTain® Partnerships across its markets and value chains and further refined the concept. For an example of model elements, please see the SPOTS project.


The Sustainable Palm Oil and Traceability in Sabah (SPOTS) aims to support small Malaysian palm oil producers on sustainability, certification, and supply chain traceability, and to increase productivity by 20% until 2020.

Customer to Cash

3.2. Production volume

Clariant’s production volume is comprised of finished goods that leave production sites and are sold to customers. In 2018, the reported production volume decreased to 4.34 million t. This is mainly due to a different reporting scope, in 2018 only the 79 largest sites of a total of 125 sites were considered. Natural Resources continues to provide the largest share, with 2.9 million t of produced goods, representing a decrease of 0.2 million t over 2017. Business Area Care Chemicals increased production volume by 0.02 million t to 0.98 million t. Business Area Plastics & Coatings reduced its production volume by 0.1 million t to 0.36 million t, while the volume of Catalysis remained stable at 0.06 million t. Overall, more than 40% of the production volume is manufactured in plants with a certified ISO 50001 energy management system.

3.3. Raw material procurement

Due to growing demand from customers and consumers, an evolving regulatory environment, and increasing interest in the circular economy, renewable raw materials are gaining importance. Clariant prioritizes responsible procurement of raw materials and promotes innovation using biofuels and bio-based chemicals and feedstock to solidify its role as a sustainability leader in the chemical industry.

Clariant spent about CHF 4.3 billion on goods and services in 2018. Roughly CHF 3 billion were disbursed for raw materials from approximately 7 000 suppliers. Across all Business Areas, more than 34 000 different raw materials were procured, although 92% of the purchase volume was made up of around 200 raw materials. In 2018, around 23% of purchased raw materials stemmed directly or indirectly from crude oil, about 19% were derived from natural raw materials such as bentonite, and 5% were made of renewable raw materials. The remaining materials were either base or specialty chemicals or non-chemicals.

4.3

Clariant spent CHF 4.3 billion on goods and services.

In addition to promoting renewable raw materials, Clariant prefers to procure goods and services from local suppliers in order to support the economic development of the respective regions. That said, in order to opt for local raw materials, impeccable quality as well as technical and economic feasibility must be guaranteed.

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Raw material procurement according to region in CHF m

 

  

2018

  

2017

1

Raw material spending of Clariant production sites in this region

2

Regional suppliers that supplied Clariant (production) sites

Asia-Pacific

  

672

  

627

Of which with local suppliers1

  

641

  

591

Number of local suppliers2

  

2 527

  

2 800

Europe

  

1 340

  

1 237

Of which with local suppliers1

  

1 228

  

1 122

Number of local suppliers2

  

1 514

  

1 690

Latin America

  

320

  

307

Of which with local suppliers1

  

213

  

209

Number of local suppliers2

  

1 085

  

1 092

Middle East & Africa

  

106

  

109

Of which with local suppliers1

  

57

  

56

Number of local suppliers2

  

378

  

407

North America

  

510

  

395

Of which with local suppliers1

  

464

  

359

Number of local suppliers2

  

930

  

1 002

Grand Total

  

2 948

  

2 674

Of which with local suppliers1

  

2 603

  

2 337

Number of suppliers2

  

6 434

  

6 991

3.4. Production sites and innovation facilities

3.4.1. Developments in the production site network

By the end of 2018, Clariant operated 125 production sites in 39 countries around the world.

  • Care Chemicals: Business Unit Industrial & Consumer Specialties integrated a new production plant for squalene and associated downstream products in Tarragona, Spain, which became operative in the last quarter of 2018. In addition, the Business Unit expanded several production facilities: in Coatzacoalcos, Mexico, ethylene oxide and propylene oxide (EO/PO) derivatives production was initiated; in Gendorf, Germany, an additional ethoxylation reactor began operating and a new polyethylene glycol (PEG) flake milling line was built; and capacity of the PEG-producing Clear Lake site in the United States was expanded. In Gebze, Turkey, production was halted and Clariant began selling the site’s land and equipment.
  • Natural Resources: In Cileungsi and Cimapag, Indonesia, Business Unit Functional Minerals reduced bottlenecks of existing bleaching earth production. In Casablanca, Morocco, Business Unit Oil & Mining Services closed its production facility, without affecting other Clariant businesses operating in Morocco.
  • Plastics & Coatings: Business Unit Additives successfully began operating the newly built production line of Hostavin® NOW in Muttenz, Switzerland. In Germany, debottlenecking projects focused on the expansion of plants for halogen-free flame retardants and Licocene® high-performance polymers. Business Unit opened a new production facility for white masterbatches in Yanbu, Saudi Arabia. Additionally, a compounding line serving the medical industry was installed in Lewiston in the United States.

3.4.2. Continued investments in China

Clariant has remained committed to its China strategy and harvested further growth opportunities in 2018. In Zhenjiang, Business Unit Industrial & Consumer Specialties expanded production capacity. Business Unit Functional Minerals increased desiccant production capacity, upholding China’s status as one of the largest desiccant markets in the world. Business Unit Additives invested in three new production facilities: In Zhenjiang, two plants were commissioned in the second half of 2018. The new facilities are dedicated to the production of ® synergistic additive solutions and Ceridust® micronized waxes, both of which are used in various applications across the plastics, coatings, and ink industries. Within the joint venture between Clariant and Tiangang Auxiliary Co. Ltd., construction of a plant for high-end process and light stabilizers, including the state-of-the-art Nylostab® S-EED® chemistry, began in the Cangzhou National Coastal-Port Economy and Technology Development Zone. Located about 200 km south of Beijing, the plant will eventually serve various industries, but will initially focus on the textile and automotive markets.

Idea to Market

3.4.3. Research & Development and Technical Centers

Clariant’s strong innovation infrastructure consists of eight Research & Development Centers and more than fifty Technical Centers. The centers are distributed around the world, with locations in Europe, North and Latin America, China, and India.

In 2018, Business Unit Oil & Mining Services opened a state-of-the-art laboratory in Midland, Texas, in the United States, with unique capabilities to support its customers in the oil and gas industry. The latest instrumentation enables the laboratory specialists to rapidly analyze samples and assess them for risk factors such as flow assurance, asset integrity, and oil/water quality. This strongly supports customers in lowering their operational costs for shale oil and gas extraction. Combined with other facilities in Midland, the laboratory augments Clariant’s service offerings to customers in the fastest-growing oil basin in the United States.

Prior to the opening in Midland, Business Unit Oil & Mining Services inaugurated another state-of-the-art laboratory in Clinton, Oklahoma, in the United States. This strategic investment will enable oil production companies to increase production efficiency and reduce operating expenses. Situated in proximity to customers, fast turnaround times of laboratory analyses and new solutions to be developed are ensured. Clariant is the fastest growing specialty oilfield production chemical supplier in North America, and its investments in technical facilities demonstrate its commitment to remain a key contributor in the production of oil and gas.

Business Area

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

Business Area

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

Masterbatches

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

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