How Natural Resources Creates Value
Business Area Natural Resources, which comprises the Business Units Oil and Mining Services, Functional Minerals, and Additives, offers high-performing solutions for mineral, oil, and gas extraction businesses, as well as for plastics, coatings, and inks applications. Driven by growing consumption of oil, metals, and food, and increased electrification around the globe, the Business Area addresses challenges in multiple industries while also capturing emerging trends.
001 NATURAL RESOURCES
1. Capturing positive market dynamics to drive business growth
In 2019, Business Unit Functional Minerals benefited from increased edible oil use in emerging countries, changing food consumption patterns, and stricter food quality standards. These developments provided growth opportunities for purification products and increased demand for Clariant’s products that bleach edible oil and reduce concentrations of harmful substances in end products.
The global automotive industry is undergoing significant changes, with increasing pressure to reduce emissions in foundries and to decrease fossil energy consumption for transportation. This trend supported Clariant’s sales of low-emission foundry additives and increased demand for specialty adsorbents based on second-generation biofuels made from agricultural residues and other waste.
Business Unit Oil and Mining Services improves efficiencies in aging mines, thereby increasing the demand for solutions such a such FLOTIGAM™ 7100, HOSTAFLOT™ 7257, and MONTANOL™ 800. Despite the slowdown of Chinese mining activities and reduced chemical expenditure, Clariant registered increased demand for its high-quality products that improve efficiency. Business Unit Oil and Mining Services also captured the trend of rising demand for solutions that ensure production efficiency with oil and refinery customers.
Sustainability prevails being the main transformation for the portfolio of Business Unit Additives in 2019. For example, Clariant’s wood-coating solutions, such as Ceridust® 8090 Vita, a surface modifier based on renewable raw materials, have become more popular as the use of wood in the building sector has increased. Clariant’s portfolio of sustainable and safe solutions for the electrics and electronics industry, including Exolit® flame retardants and Nylostab® S-EED®, is sought after as the age of digitalization generates further demand for materials that support new electrification, electronic equipment, and smart devices.
Electromobility provides new business opportunities
Electromobility is expected to reduce carbon emissions from road transportation. This presents opportunities for Clariant’s nonhalogenated flame retardants as electric vehicles have their specific material and safety requirements. Because of the high energy content of the battery and the high voltages and currents employed, not only flammability is a risk but also electrical arcing, which can in turn lead to a fire. Being phosphorus-based and halogen-free, choosing Exolit® OP as a flame retardant is not only a safer and an environmentally superior option compared to legacy brominated flame retardants, but it also helps reduce the weight of automotive parts as well. Exolit® OP continues to deliver the same high-level fire protection throughout many recycling and reuse cycles, and provides manufacturers with a genuine alternative to the use of new material.
Idea to Market
2. Innovating for sustainability and increased efficiency
In 2019, Business Unit Functional Minerals addressed circular economy concerns by enhancing its mineral-based performance dewatering system Invoque®. Invoque® improves liquid-solid separation for operational processes, tailing circuits, and reprocessing in mines. This enables the mining industry to decrease costs, increase yield, and reduce water usage and dependency on tailing dams. Clariant also focused on the development of Tonsil® grades for the edible oil industry, which remove harmful substances and reduce the risk of their formation, thereby increasing food safety.
Additionally, Low Emissions (LE+) products in the Ecosil™ and Geko® LE+ range were optimized for the foundry industry. Development projects focused on preventing the creation of volatile organic compounds (VOCs), allowing customers to reduce harmful emissions and overall costs while increasing quality. A substantial amount of development effort was also spent on second-generation green diesel to supply high-performing adsorbents and provide superior technical support.
With regard to digitalization, Clariant’s Electronic Lab Notebook and Laboratory Information Management System improved the use of data analytics to customize products in an economically viable way. For example, data on variations of bentonite revealed unknown correlations for potential customer applications and helped Clariant fulfill specific customer needs faster and more economically. Read more in Intellectual Capital
Business Unit Oil and Mining Services invested in several innovation activities to enhance infrastructure and supply security in new regions across Asia, Africa, and the Americas. In North America, Clariant Oil Services opened a High-Throughput Experimentation (HTE) laboratory in Houston, Texas, a first for the Oil and Gas industry. The HTE laboratory is a fast-response unit for application, discovery, and development of optimized formulations for customers. Read more in Intellectual Capital
Making Additives fit for re- and upcycling
The Fraunhofer Institute confirmed that Clariant’s Exolit® OP 1400 flame retardant fully supports the demanding recycling conditions for PA6 and PA66 engineering plastics used in the transportation and electronics industries.
Business Unit Oil and Mining Services has expanded infrastructure in new regions such as Western and Sub-Saharan Africa, enabling copper, gold, and oil development activities. This supports the oil and mining industries in Algeria, Angola, Mozambique, South Africa, and Zambia.
Business Unit Additives focused on translating sustainability and performance requirements into innovative solutions for customers. In particular, Clariant is enhancing the circularity of plastics by developing additives that improve recyclability. Furthermore, solutions using renewable, bio-based additives to boost resource efficiency are being developed. For example, bio-based additives derived from rice bran wax, a non-food-competing by-product of rice bran oil production, support high performance processing and enhance surface properties of plastics and coatings. Another example are the new Licocene® solutions used in adhesion applications to bond or de-bond challenging materials.
Intellectual CapitalA safer, better alternative to Xanthates
HOSTAFLOT™ 7257 and HOSTAFLOT™ 7800 allow operators in mining to discontinue the use of sodium isopropyl xanthate and potassium amyl xanthate. Xanthate is a hazardous material typically used in sulfide flotation that is liable to spontaneous combustion and produces decomposition products that are toxic for humans and the environment. In the form of a copper flotation and disposal solution, Clariant developed alternatives that enable safer handling and disposal solutions for mines, lower capital expenditure, and a longer shelf life than solid xanthate.
Market to Customer
3. Addressing customer needs with new products and solutions
In 2019, Clariant brought to market a number of products that combine innovation and sustainability. The mineral filler Opazil™ controls migration of mineral-oil-based impurities present in recycled paper pulp and thus enables producers to safely use recycled paper and cardboard fiber for food packaging.
The Humitector® Type 2 Humidity Indicator Card was launched to provide a fully compliant, yet more environmentally friendly, non-reversible humidity indicator for electronic components. The indicator is used in dry pack environments for moisture sensitive products such as surface mount devices (SMD), and is halogen- and cobalt dichloride-free.
Business Unit Oil and Mining Services introduced WAXTREAT™ SubZero Pour Point Depressant technology for cold climate regions. The innovative product received the EcoTain® label and helps oil production customers increase operational efficiency by improving the flow properties of oils while mitigating paraffin buildup in crude oil pipeline systems.
Additionally, the Business Unit has invested in expanding the application field beyond iron ore flotation to leverage mining expertise into dewatering, filtering, and tailings treatment, following environmental pressure on mining companies to grow flotation operations.
Business Unit Oil and Mining Services also expanded its overall services to customers by implementing the hardware and software application VERITRAX™ 3.0 SAP across North America. The improved digital chemical management system eases communication between Clariant and oil producers with real-time information on the entire chemical management process, thereby increasing efficiency.
To enable recycling in combination with low resource consumption as the basis of a circular economy, Business Unit Additives, for example, developed AddWorks® PKG 906 Circle. A proprietary recycling aid, which enables manufacturers of polyolefin film, such as food packaging film, to incorporate recycled content by up to 30% without loss in quality and while improving process efficiency.
Clariant teamed up with renewable hydrocarbon producer Neste to offer a wide range of additives based on mass balance-certified ethylene and propylene from renewable feedstock. These additives include the adhesives and plastic additives Licocene® Terra and the flame retardants Exolit® OP Terra. Other new products brought to market include rice bran wax-based Licocare® RBW Vita, a renewable processing aid for formulators of engineering plastic and bioplastic compounds. Terra, Vita, and Circle represent three of four sustainability designators that Clariant introduced in 2019. Read more in Planet
Sustainability efforts are also exemplified by the fast development of EcoTain®-labeled products, which made up a significant percentage of sales volume in Business Unit Additives in 2019. Clariant is committed to further grow the share of EcoTain®-labelled products through innovation and strategic partnerships. Read more in Manufactured Capital
»Customers are at the heart of what we do. We take individual input very seriously and come up with customized solutions.«
Sven Schultheis Head of Business Unit Functional Minerals
4. Strengthening customer centricity
Customer centricity is an integral part of the strategic objectives of the Business Units Functional Minerals and Oil and Mining Services, and customer-oriented targets are a key element of the leadership performance objectives. In 2019, Business Unit Additives further strengthened customer centricity by refining the customer segmentation and undertaking a Value-to-Customer (V2C) initiative. With need-based segmentation, Clariant better addresses customer requirements and creates the basis for systematic value-based pricing and selling. In addition, it allows careful matching between Clariant’s technical expertise and portfolio with selective growth opportunities.
In 2019, Business Unit Additives carried out two marketing excellence projects in China to accelerate business development in new market areas and better respond to customer needs. It also began collaborating with key brand owners to advance sustainability and performance. Together with Neste, Clariant started to develop state-of-the-art solutions based on renewable olefins from used cooking oils and other waste oils. Other industries such as electronics were also proactively approached with ideas on applying new technologies and solutions that benefit the entire value chain.
Increased interactions with customers and regular feedback amplifies Clariant’s focus on customers. The 2018 customer satisfaction survey underscored the importance of »Technical Services,« which was rated as the second most important buying criterion, right after »Products and Packaging« in the Business Unit Additives.
Manufactured capitalCustomer to Cash
5. Increasing global capabilities
In 2019, Business Unit Functional Minerals continued to debottleneck its production in Spain, Germany, Mexico, and Indonesia to improve efficiency and flexibility. Business Unit Oil and Mining Services successfully opened a state-of-the-art laboratory in South Africa as a regional hub for mining operators in 2019. In addition, Clariant entered a partnership with ChemQuest in South Africa, which is now a distributor of Clariant products for mining operations, to increase metallurgical efficiencies and provide tailored chemical solutions to the mining sector. In Bojonegoro, Indonesia, Clariant inaugurated a new supply base for regional oil production customers. The investment demonstrates Clariant’s customer focus and will enhance accessibility of products and services for major customers in the region.
In line with the goal of becoming an industry leader in China, Business Unit Additives achieved full operational capacity of its new Zhenjiang, China, plant for the production of AddWorks® and Ceridust® products. In addition, the project to expand capacity for Licocene® production in Germany and the plan for a new light stabilizer plant in Cangzhou, China, were advanced.
6. Emphasizing the importance of health and safety
In 2019, Clariant emphasized safety awareness, the identification of workplace hazards, and improved flow of communication. Functional Minerals rolled out its Environmental Safety and Health Affairs (ESHA) strategy to enhance its safety performance. The strategy is based on continuous improvement of its safety culture, systematic identification, evaluation, and elimination of risks, and reasonable and sustainable use of natural resources. The rollout included the reinforcement of the safety policy across all levels, leader’s safety awareness trainings, and the development and implementation of safety concepts for the specific risks on the site level.
24 years without a lost time accident
Clariant’s Mining site Lara in Australia celebrated its 24th year without a lost time accident (LTA). This accomplishment gave the Lara site the record among Clariant’s entire worldwide network for the longest LTA-free period.
Business Unit Oil and Mining Services concentrated its health and safety improvement activities mainly on the North American region. Among other initiatives, the Business Unit implemented SmartDrive, a video-assisted safety program that helps truck drivers prevent accidents. Read more in Occupational Health, Safety and Well-Being
Business Unit Additives focused on stringent safety in all plants by intensifying its awareness program with trainings, safety checks, and accident-avoidance projects.
7. Achieving environmental protection in operations
In 2019, Clariant focused on optimizing its environmental footprint and further investigated how to support customers and the chemical industry overall to overcome potential waste and emissions issues along the entire value chain.
Business Unit Functional Minerals achieved emission reductions thanks to leveraging its dense network of production sites. With shorter transport distances and more reliable supply chains, Functional Minerals is closer to its customers now. Moreover, it increased the Sardinian sun-drying operation of bentonite. By using solar energy to dry bentonite, it can be transported with a significantly lower percentage of liquid, thereby reducing weight, costs, and environmental impact. Additionally, the sun drying method allows to keep higher proportions of the active product than any other heating process.
To assess the environmental performance in the supply chain, Business Unit Oil and Mining Services uses individualized review processes for suppliers. Active supplier communication and regular interactions help Clariant raise awareness on sustainability requirements.
Business Unit Additives began transitioning the production plant in Knapsack, Germany, entirely to renewable energy in 2019. This plant also achieved a significant reduction in water and energy consumption while simultaneously increasing capacity. Production processes and workflows are constantly reviewed and optimized for improved environmental performance.
Manufactured capital, Production volumeTargets
Growth potential per year
EBITDA target margin
Input
Performance
2.0 %
R&D spend of sales
629
Raw material procured
in CHF m
> 145
Active innovation projects
39
Production sites
3 697
Number of raw materials procured
People
47 993
Training hours
1 776
Raw material suppliers
Planet
1 033.32
Energy consumption in m kWh
Output
Performance
1 874
Sales in CHF m
4 %
Growth in local currencies
2.971
Production volume in m t
People
3 948
Staff in FTE at year-end
(2018: 3 276; excl. Business Unit Additives)
Planet
134.82
Waste in thousand t
1072
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
A substance added to products in small quantities to achieve certain properties or to improve a product. View entire glossary
Usually solid substances which are able to selectively accumulate certain substances from adjacent gaseous or liquid phases. View entire glossary
A substance added to products in small quantities to achieve certain properties or to improve a product. 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
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