How Care Chemicals Creates Value
The Business Area Care Chemicals encompasses Industrial & Consumer Specialties (ICS) and New Businesses. With high-performing ingredients, formulation expertise, and an integrated value chain, Care Chemicals concentrates on markets with high margins and short cyclicality and responds quickly to consumer-driven trends.
001 CARE CHEMICALS
1. Addressing market developments and changing consumer behavior
Growing consumer demand for sustainable, safe, and convenient ingredients creates a favorable business environment for Business Area Care Chemicals. With its high-performing, sustainable products and customized solutions, Clariant meets global market expectations while also addressing the rising importance of fulfilling local customer needs.
The Personal Care market is confronted with a dynamic and demanding marketplace as end-consumers increasingly challenge brand owners to create positive social and environmental impacts. By developing new solutions for an increasingly diverse population, Clariant is helping to transform the beauty industry into a more innovative and multifaceted industry.
In the Industrial and Home Care market, the rise of e-commerce has increased demand for easy-to-use solutions that balance customers’ concerns about size and weight to ship such end products while maintaining the added benefits. In the industrial lubricant area, despite new tariffs and their impact on the global manufacturing industry, Clariant was able to respond to the sustainability and electrification trends by providing environmentally friendly solutions at the best cost-benefit ratio.
With increasing regulatory requirements regarding ecolabel criteria and discerning consumer preferences, the Paints and Coatings business capitalized on the demand for safer and more ecological ingredients by offering an extensive portfolio of neutralizing additives, wetting and dispersing agents, emulsifiers, and products to formulate biocide-free paints, which contribute to a healthier indoor environment.
The Crop Solutions business has been affected by new technologies, regulations, trade tensions, and increasing demand for bio-based solutions. Thanks to digitalization, farming practices now require new and adapted solutions, such as drone technologies. With specialized adjuvants, Clariant aims to exploit the full potential of drone application and reduce dose rates and water volumes, leading to considerable cost savings for farmers and optimized yields in the harvest season. Further, with its previous investment in a modern crop greenhouse, Clariant is now in a strong position to benefit from the continuing global trend toward sustainable crop protection for the world’s increasing nutrition requirements.
Idea to Market
2. Combining innovation and sustainability
Care Chemicals is striving for innovations in the sustainability field by finding new solutions based on renewable resources and developing more environmentally friendly substitutes. Creating disruptive innovation requires a diversified toolset, the use of new technologies, and close collaboration among different corporate functions.
Business Area Care Chemicals aims to increase the use of renewable raw materials and achieve an innovation pipeline that is predominantly based on renewable feedstock coming from agricultural waste streams. In 2019, this share was increased again.
As customization and sustainability became predominant in the Personal Care sector, Clariant developed a set of substantiated, naturally active ingredients with scientifically proven high performance. This includes the award-winning B-Circadin™ and Epseama®. Read more in Product Stewardship/Sustainable Chemistry
Epseama® for skin rejuvenation
The new active ingredient Epseama® pioneers the targeting of long non-coding RNA nc886 to rejuvenate skin self-renewal and self-defense abilities and preserve skin youth. It is extracted from the seaweed Laminaria japonica (Kelp or Kombu), known as the »superfood of the sea.«
Through its worldwide network of local partners, Business Area Care Chemicals has access to age-old plant knowledge and exotic biomes around the globe. Complemented by transparent sourcing, responsible cultivation, and advanced formulation expertise, Clariant has developed solutions that combine sustainability and performance.
In the paints and coatings business, as trends are shifting from solvent- to water-borne systems, Clariant continued to reformulate and develop dispersants for products that are free from ingredients under scrutiny, such as biocides and alkylphenol ethoxylates (APEO)/nonylphenol ethoxylates (NPEO). Dispersogen® PLF 100, for instance, is APEO/NPEO-free, low in semi-volatile and volatile organic compounds ((S)VOCs), and free of biocides. It further improves performance and efficiency by suppressing leaching effects in paints.
3. Becoming a preferred innovation partner
To increase the speed and quality of innovation, Business Area Care Chemicals expanded its pilot of the Innovation Garage (iGarage) to develop new products and solutions according to customer needs. Two new iGarages were completed while one iGarage was conducted in collaboration with a customer from the Industrial and Home Care business. Read more in Intellectual Capital Within a short time, the combined team created early-stage prototypes using concepts and technologies from both companies and tested them with real customers. Based on the exciting outcome, the companies will investigate next steps to further develop the concepts into new products. The successful collaborations significantly enhanced trust in the developing relationships between Business Area Care Chemicals and major consumer care brand owners.
Catalysis, Advancing through innovation and collaborationMarket to Customer
4. Launching high-performing and eco-friendly solutions
Product launches in 2019 included a number of solutions that meet customer needs for safe and natural products.
Clariant launched its new »Envisioning Beauty« platform in 2019. Based on market and customer insights, Clariant defined five product clusters – Actives, Functional Claims, Sensorial Effects, Preservation, and Naturals – to help customers differentiate their cosmetics as sustainable, inspiring, and easy to use.
In 2019, Clariant introduced its new plant-based Plantasens® Flash 80 and Flash 100. The two ingredients represent a major milestone for formulations as they are not only eco-friendly and affordable, but also high-performing market alternatives for silicone. Another highlight was the launch of the new CareMag™ D, which draws on Dead Sea salts and is a suitable replacement for aluminum derivatives in deodorants. The product enables aluminum-free, alcohol-free, and paraben-free deodorant formulations. Moreover, NeutroTain® DMG was launched. The 75% sugar-based, renewable, and readily biodegradable neutralizing agent is used for hair and skin products. In the Home Care business, Clariant unveiled the new concept CleanJoyable, which is comprised of TexCare® SRN 260 and EcoTain®-labeled GlucoPure® Sense and Aristocare® Smart. GlucoPure® consists of 95% renewable raw materials. Read more in Manufactured Capital
Clariant Naturals
The flagship platform enables manufacturers to create even 100% natural formulations. The definition of »natural« is, for example, based on the ISO standard 16128, which uses the widely accepted Renewable Carbon Index (RCI) as its main metric to reflect the degree of naturality.
5. Capturing regional trends to strengthen customer centricity
In 2019, customer events and innovation workshops across the globe helped Business Area Care Chemicals develop client-specific solutions. The Business Area intensified its focus on the life cycle of substances that are or will be under public concern or scrutiny, to develop substitutes that will ensure its customers are ahead of their competitors. The cosmetics industry, for instance, is focusing on products that are preservative-free and use minimal water. To address this major trend, Clariant launched ReMAGINE, a water-free platform containing six formulations for daily personal care routines. The formulations contain little or no water and are a successful follow-up to last year’s »Essence« initiative, which delivered 15 formulations without questionable ingredients that achieved the same performance and sensorial benefits as conventional ones.
»By monitoring and anticipating consumer trends, we develop sustainable solutions that do not compromise on performance and place our customers ahead of the market.«
Vincent Gass Head of Global Marketing, Business Unit Industrial & Consumer Specialties
Through the trend-monitoring platform BeautyForward®, Business Area Care Chemicals can respond quickly to market trends and customer needs in the personal care sector. For the third edition of BeautyForward®, Clariant went from a global to a more local perspective, concentrating on regional formulations. In 2019, Clariant identified five regional trends and provided illustrative full formulations.
Translating five regional beauty trends into concrete formulations
USA – Blue Gold
Due to increasing water scarcity in North America and demand for water saving products, Clariant designed an exceptionally gentle Polish Powder Cleanser with no sulphates, betaines or fragrances that uses up to 60% less water compared to liquid cleanser.
Brazil – #Consciousbeauty
The Peace & Love Mineral Sunscreen SPF 30 is free from chemical UV filters, silicones, and fragrances and adapts to all skin types. Being vegan and 75% plant-based, this sunscreen is COSMO-certified and enables natural beauty care routines.
China – Guardian Angel
To protect the skin against sun, environmental pollutants, and oxidative stress, Clariant developed Urban Skin Age Defense Lotion Broad Spectrum SPF 50 PA+++.
France – Redefining Eden
Clariant’s My Synchronizer Face Roll On is an anti-fatigue face roll-on characterized by a watery and silky sensory that is targeted to all genders, thereby countering conventional gender stereotypes in skin care.
Indonesia – Blue Gold
To respond to Indonesia’s lacking water infrastructure, Clariant designed the Beautiful Days Perfume Body & Hair Balm from 100% natural ingredients. With 0% alcohol, it uses 90% less water when compared to a regular liquid splash.
The presence of sales, technical, and marketing expertise across the globe allows Business Area Care Chemicals to reveal regional and local market insights. In 2019, a Consumer Care Innovation Center in the New York City area, United States, was inaugurated to develop solutions derived from customer needs in North America. In the testing center, lab results can be correlated with actual consumer testing, and the collaboration space allows interactive and creative thinking. This center enhances Clariant’s innovation capabilities to leverage customer formulations and reinforces beneficial relationships in North America.
Catalysis, Creating value with innovative products and servicesCustomer to Cash
6. Connecting the supply chain
In 2019, Clariant’s Manufacturing Execution System was further rolled out to provide a real-time view of the production status. By applying analytical methods and data-driven tools, Business Area Care Chemicals further optimized the production processes. For example, it conducted a pilot project to increase efficiency in the supply chain by applying Radio Frequency Identification technology (RFID). Also, Business Area Care Chemicals explored the possibilities of automation and digitalization for its supply chain activities in order to optimize process control, reduce wait time in production, and minimize the risk of errors by better connecting and integrating its planning tools. In addition, the newly established global Supply Chain Team supported the harmonization and optimization of supply chain processes around the globe.
To improve traceability and transparency in the supply chain, Business Area Care Chemicals is looking into integrated tracking system solutions that provide customers with timely information about orders and shipments. This supports Clariant’s efforts to connect suppliers with end customers.
7. Enhancing capabilities and increasing capacities
To further improve product quality and quantity at its ethylene oxide production plant in Gendorf, Germany, Business Area Care Chemicals added a production line of alkoxylates and installed a new distillation column that will operate from 2020 onward. In addition, Clariant and Saudi Kayan are currently evaluating the potential of an alkoxylates joint venture.
8. Improving the environmental footprint in operations
Business Area Care Chemicals continues to ensure sustainability and environmental protection alongside Clariant’s growth strategy. In 2019, individual sites implemented several measures to improve their environmental footprint. Through improved chilled water systems and compressed air systems, as well as the installation of LED technology for illumination, Business Area Care Chemicals was able to decrease its electricity consumption. Steam consumption was also reduced by optimizing the seasonal control and temperature level of water systems as well as improving the integration of steam condensate. To reduce water and wastewater, the recovery rate of water demineralization units and waste gas treatment were optimized through a better separation of rainwater.
9. Enhancing safety along the entire supply chain
Business Area Care Chemicals places a high priority on safety. Frequent audits at all plants contributed to rigorous improvements in product quality, environmental protection, health and safety precautions, and reduced accident risk. In 2019, the Business Area undertook important steps toward Clariant’s goal of zero accidents. The AvoidingAccidents program was implemented at all sites while refresher trainings were conducted at all sites that had already implemented the program. The newly inaugurated wastewater treatment plant in Bonthapally, India, also successfully launched the AvoidingAccidents program, which will be completed at the beginning of 2020. At the sites in Suzano, Brazil, and Gendorf, Germany, the Business Area implemented the Clariant Global Operational Discipline initiative. The initiative consists of safety trainings and an awareness-raising campaign. Other sites will follow over the course of 2020.
To ensure that safety is also a priority in the supply chain, the site in Suzano, Brazil, developed a new contractor management procedure to safeguard the occupational health and safety of its contractors’ employees. The system will be implemented at the beginning of 2020. Additionally, Business Area Care Chemicals continued to equip its ethylene oxide transportation units, which carry potentially harmful substances, with real-time information on safety conditions such as temperature and location.
Catalysis, Improving supply chain managementTargets
Growth potential per year
EBITDA target margin
Input
Performance
2.9 %
R&D spend of sales
857
Raw material procured
in CHF m
> 70
Active innovation projects
13
Production sites
2 714
Number of raw materials procured
People
32 172
Training hours
1 672
Raw material suppliers
Planet
757.22
Energy consumption in m kWh
Output
Performance
1 600
Sales in CHF m
–1 %
Growth in local currencies
0.961
Production volume in m t
People
2 614
Staff in FTE at year-end
(2018: 2 541)
Planet
65.42
Waste in thousand t
2092
Greenhouse gas emissions
in kg/t production
1 For 2019, 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 the interim years, including 2019, the reduced reporting scope comprises the larger sites responsible for 95 % of production.
For the financial reporting, Clariant grouped its businesses in three core Business Areas: Care Chemicals, Catalysis, and Natural Resources. View entire glossary
The value chain describes the series of steps in the production process, from raw materials through the various intermediate stages to the finished end product. View entire glossary
A substance added to products in small quantities to achieve certain properties or to improve a product. View entire glossary
For the financial reporting, Clariant grouped its businesses in three core Business Areas: Care Chemicals, Catalysis, and Natural Resources. View entire glossary
Joint ventures are all activities in which Clariant is involved with another partner. The accounting method applied for joint ventures depends on the specific conditions of the participation. View entire glossary
Earnings before interest, taxes, depreciation, and amortization. View entire glossary
The EBITDA margin is calculated based on the ratio of EBITDA to sales and shows the return generated through operations from sales before depreciation and amortization. View entire glossary
Exceptional items are defined as non-recurring costs or income that have a significant impact on the result, for example expenses related to restructuring measures. 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