3. Manufactured Capital

Market to Customer

3. Manufactured capital

Protecting customers, consumers, and the environment by providing safer and more sustainable solutions is one of Clariant’s top priorities. In 2019, Clariant continued screening products as part of the Portfolio Value Program and further promoted its EcoTain® label. In addition, Clariant prioritized responsible procurement of raw materials and solidified its role as a sustainability leader by promoting the production of bio-based chemicals and biofuels.

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Overview Manufactured Capital

 

  

Continuing

  

Discontinued

  

Total 2019

  

2018

  

Change
in %

1

For 2018 and 2019, 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

  

3

  

27

  

24

  

12.5

Research & Development Centers

  

 

  

 

  

8

  

8

  

0

Technical Centers

  

 

  

 

  

>50

  

>50

  

0

Countries with production facilities

  

 

  

 

  

38

  

39

  

–2.6

Production sites

  

66

  

52

  

118

  

125

  

–5.6

Raw materials procured (in m t)

  

2.79

  

0.34

  

3.13

  

3.57

  

–12.3

Production (in m t)1

  

3.99

  

0.26

  

4.25

  

4.34

  

–2.1

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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 . 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 with respect to sustainability, which 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 challenges and awards flagship products with the EcoTain® label. By the end of 2019, 76% of the product portfolio of the continuing operations had been screened for its sustainability profile and 220 products were awarded the distinguishing label.

Sustainability Criteria

36 criteria grouped into six categories are considered in the Portfolio Value Program (PVP) when screening the product portfolio for sustainability.

Portfolio Value Program (PVP) (graphic)

3.1. Product stewardship/sustainable chemistry

Clariant puts customer safety and the environment at the forefront of its solutions.

3.1.1. Global regulations and EU REACH

Product Stewardship enables with global regulations and ensures compliant communication across the supply chain through efficient information and document management. To ensure the company complies with all relevant regulations and raises awareness on emerging regulations, Clariant monitors global regulatory developments, runs impact assessments, reviews its product portfolio, and supports business preparedness. Clariant’s business compliance was confirmed in 2019 by several REACH enforcement and regulatory bodies in Belgium, Spain, and Germany.

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 chemical industry.

Once all REACH registrations for existing chemicals are completed, Clariant will continue to register newly manufactured or imported chemicals in accordance with the EU REACH regulations and ensure that all product dossiers are kept up to date. Since the adoption of EU REACH in 2007, Clariant has submitted and updated more than 1 200 dossiers for chemical substances. With the focus of EU REACH regulation shifting toward dossier evaluation, Clariant is proactively reviewing all submitted dossiers and responding to potential requests for additional information from the European Chemicals Agency (ECHA).

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. For example, Clariant contributed to the preparation of the Cefic REACH Dossier Improvement Action Plan launched in 2019, which provides a framework for REACH registrants to evaluate safety data previously submitted in REACH registration dossiers in steps.

3.1.2. Portfolio Value Program (PVP)

As part of the PVP, 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 Chemistry

 

  

Continuing

  

Discontinued

  

Total 2019

  

2018

  

Change
in %

1

Figure restated for continuing businesses

EcoTain®-awarded products

  

24

  

3

  

27

  

24

  

12.5

Cumulative number of EcoTain® products

  

171

  

49

  

220

  

193

  

14.0

Product portfolio screened for sustainability performance (sales %)

  

76

  

 

  

 

  

761

  

—

Screened products meeting internal sustainability definition (%)

  

68

  

 

  

 

  

681

  

—

Screened products not meeting internal sustainability definition (%)

  

8

  

 

  

 

  

81

  

—

Product portfolio not screened for sustainability performance (sales %)

  

24

  

 

  

 

  

241

  

—

In 2019, the total number of EcoTain® products increased, demonstrating how innovation fuels sustainability excellence and vice versa. The screening coverage of the continuing operations’ portfolio was maintained at 76%, reflecting Clariant’s efforts to assess new products.

Clariant maintains roadmaps to uncover sustainability improvement opportunities in the product portfolio and drive innovation. Currently, these 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.

In 2019, Clariant further strengthened its reporting capabilities to better link the financial performance of products with its sustainability performance. The results of the PVP financial reporting support decision-making that enhances both sustainability and financial performance.

Additionally, Clariant introduced sustainability designators that enable customers to identify products with key advantages, for example, for water savings or enabling circularity. Promoted products are identified based on the outcome of the product screenings and meeting the thresholds for each of the sustainability designators. Read more in

3.1.3. EcoTain®

During 2019, the EcoTain® label was further promoted through the rollout of  – a standard for establishing 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. Moreover, Clariant advanced the development of possible EcoTain® Partnerships across its markets and value chains and further refined the concept. Clariant awarded 27 products the EcoTain® label, increasing the total number of products with proven sustainability excellence to 220.

GRI Online Report

Management Approach Product Stewardship/Sustainable Chemistry

Customer to Cash

3.2. Production volume

In 2019, the reported production volume decreased by 2.1% to 4.25 million tons. Natural Resources continues to provide the largest share, with 2.97 million tons of produced goods, representing an increase of 0.7 million tons. This is mainly due to the different reporting scope that includes Business Unit as of 2019. Production volume of Business Area Care Chemicals decreased by 0.02 million tons to 0.96 million tons. The production volume of Business Area Catalysis remained stable at 0.06 million tons. Overall, more than 39% 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 supports the shift to renewable raw materials by promoting innovation in biofuels, bio-based chemicals, and feedstock. By doing so, Clariant strengthens its role as a sustainability leader in the chemical industry.

Clariant spent about CHF 4.2 billion on goods and services in 2019. Roughly CHF 2.6 billion were disbursed for raw materials from approximately 6 800 suppliers. Across all , more than 20 000 different raw materials were procured, although 93% of the purchase volume was made up of around 200 raw materials. In 2019, 24% of purchased raw materials stemmed directly or indirectly from crude oil; about 21% were derived from natural raw materials such as bentonite; and 6% were made of renewable raw materials. The remaining materials were either base or specialty chemicals or non-chemicals.

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 Region1 in CHF m

 

  

Continuing

  

Discontinued

  

Total 2019

  

2018

  

Change
in %

1

Duplicate counts possible. One supplier may supply to continuing and discontinued operations.

2

Raw material spending of Clariant production sites in this region

3

Regional suppliers that supplied Clariant (production) sites

Asia-Pacific

  

283

  

314

  

597

  

672

  

–11.2

Of which with local suppliers2

  

270

  

294

  

564

  

641

  

–12.0

Number of local suppliers3

  

1 061

  

1 539

  

2 422

  

2 527

  

–4.2

Europe

  

886

  

346

  

1 232

  

1 340

  

–8.1

Of which with local suppliers2

  

853

  

264

  

1 117

  

1 228

  

–9.0

Number of local suppliers3

  

795

  

788

  

1 416

  

1 514

  

–6.5

Latin America

  

202

  

60

  

262

  

320

  

–18.1

Of which with local suppliers2

  

149

  

26

  

176

  

213

  

–17.4

Number of local suppliers3

  

657

  

556

  

1 088

  

1 085

  

0.3

Middle East & Africa

  

49

  

50

  

99

  

106

  

–6.6

Of which with local suppliers2

  

28

  

26

  

55

  

57

  

–3.5

Number of local suppliers3

  

162

  

253

  

395

  

378

  

4.5

North America

  

338

  

114

  

453

  

510

  

–11.2

Of which with local suppliers2

  

320

  

99

  

419

  

464

  

–9.7

Number of local suppliers3

  

538

  

483

  

979

  

930

  

5.3

Grand Total

  

1 758

  

884

  

2 642

  

2 948

  

–10.4

Of which with local suppliers2

  

1 620

  

710

  

2 330

  

2 603

  

–10.5

Number of local suppliers3

  

3 213

  

3 619

  

6 300

  

6 434

  

–2.1

3.4. Production sites and innovation facilities

3.4.1. Developments in the production site network

By the end of 2019, Clariant operated 118 production sites in 38 countries around the world.

  • Care Chemicals: To further enhance product quality, enable higher production yields, and improve process reliability at its ethylene oxide production plant in Gendorf, Germany, Business Unit Industrial & Consumer Specialties added a production line of alkoxylates and installed a new distillation column that will operate from 2020 onward. At its site in Bonthapally, India, the Business Unit inaugurated a new state-of-the-art wastewater treatment plant. Read more in Further, the Business Unit started plant upgrade work at its site in Mount Holly, USA. A plant at the site in Santa Clara, Mexico, was divested.
  • Catalysis: Business Unit announced a plan for significant expansion of the capacity of its maleic anhydride catalysts production facility in Panjin, China. The investment will further optimize the existing facility and enable the creation of a new state-of-the-art production line for Clariant’s SynDane™ maleic anhydride catalyst.
  • Natural Resources: Business Unit Oil and Mining Services expanded its infrastructure in 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. It also opened a new supply base in Bojonegoro, Indonesia, which enhanced operational efficiency and increased service levels for customers while providing improved safety, sustainability, and optimized supply chain performance. Business Unit Functional Minerals added a new production line for activated bleaching earth at its site in Yuncos, Spain. After opening two new facilities at its site in Zhenjiang, China, Business Unit Additives achieved full operational capacity for its additives and Ceridust® in 2019. In addition, the Business Unit advanced a new light stabilizer plant in Cangzhou, China, and capacity expansion of its Licocene® production in Frankfurt, Germany.
  • Discontinued Operations: Business Unit opened a facility for high-end blue pigments for the automotive industry in Cuddalore, India. At its site in Pogliano, Italy, Business Unit launched a competence center for recycling by constructing a recycling miniplant that will become operational in 2020. Read more in

3.4.2. 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 2019, Clariant inaugurated a new Consumer Care Innovation Center in the New York City area, USA, to strengthen collaborative innovation with North America’s consumer care brands. Read more in In addition, Clariant opened its third High-Throughput Experimentation (HTE) Laboratory in Houston, Texas, USA. The location is key as the new facility is the first of its kind supporting the Oil & Gas industry, offering new and sophisticated solutions for customers. Read more in

Stakeholders

Stakeholders are people or groups whose interests are linked in various ways with those of a company. They include shareholders, business partners, employees, neighbors, and the community. View entire glossary

Compliance

Compliance is a key element of Corporate Governance. It refers to compliance with the law and directives as well as with voluntary codes within the company. View entire glossary

Value chain

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

Business Area

For the financial reporting, Clariant grouped its businesses in three core Business Areas: Care Chemicals, Catalysis, and Natural Resources. View entire glossary

Additive

A substance added to products in small quantities to achieve certain properties or to improve a product. View entire glossary

Business Area

For the financial reporting, Clariant grouped its businesses in three core Business Areas: Care Chemicals, Catalysis, and Natural Resources. View entire glossary

Catalyst

A substance that lowers the activation energy, thereby increasing the rate of a chemical reaction without being consumed by the reaction itself. View entire glossary

Pigments

Pigments are substances used for coloring; they are used in a technical manner, for example in the manufacture of dyes, varnishes, and plastics. 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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