Care Chemicals

General information

In the 2022 financial year, the Business AreaBusiness AreaFor the financial reporting, Clariant grouped its businesses in three core Business Areas: Care Chemicals, Catalysis, and Natural Resources. As of 1 January 2023, the Group conducts its business through the three newly formed Business Units Care Chemicals, Catalysts, and Adsorbents & Additives and will report accordingly as of the first quarter of 2023.View entire glossary Care Chemicals comprised the Business Unit Industrial & Consumer Specialties (ICS). As a leading provider of specialty chemicals and application solutions for consumer care and industrial markets, Care Chemicals delivers high-performance ingredients and formulation expertise at the best cost-to-performance ratio with an integrated value chain that responds quickly to consumer trends.

CARE CHEMICALS IN THE 2022 FINANCIAL YEAR

OVERVIEW

In the 2022 financial year, the Business AreaBusiness AreaFor the financial reporting, Clariant grouped its businesses in three core Business Areas: Care Chemicals, Catalysis, and Natural Resources. As of 1 January 2023, the Group conducts its business through the three newly formed Business Units Care Chemicals, Catalysts, and Adsorbents & Additives and will report accordingly as of the first quarter of 2023.View entire glossary Care Chemicals comprised Industrial & Consumer Specialties (ICS), which serves customers in the personal & home care, crop solutions, paints & coatings and industrial applications markets.

APPLICATIONS

Business Unit Industrial & Consumer Specialities

• Automotive Fluids
• Aviation
• Construction chemicals
• Crop Solutions
• Health Care
• Home Care
• Industrial Lubricants
• Paints & Coatings
• Personal Care
• Special solvents

PRIORITY SDGs

• SDG 2 Zero Hunger
• SDG 3 Good Health and Well-being
• SDG 6 Clean Water and Sanitation
• SDG 12 Responsible Consumption and Production
• SDG 15 Life on Land

Care Chemicals sets a clear focus on highly attractive, high-margin, and low-cyclicality segments. The business area operates in seven different markets: personal & home care, crop solutions, paints and coatings, industrial lubricants, automotive fluids, and aviation. Offering approximately 2 000 products to around 5 000 customers, it operates in Europe, Middle East, and Africa, Asia-Pacific, North America, and Latin America. Approximately two-thirds of the business is consumer-facing in consumer care and industrial applications.

The business area benefits from several business drivers:

• growing relevance of lifestyle-driven consumers focused on comfort and well-being;
• an increased interest in green and sustainable products that are based on natural ingredients and free of harmful substances;
• the desire of the agricultural industry to better fulfill global nutrition requirements;
• the general trend toward responsible production and consumption, including a demand for solutions that reduce the carbon footprint in the value chain

As of January 2023, the former Business Units ICS and Oil and Mining Services make up the Business Unit Care Chemicals. This reorganization is part of the simplified organizational and leadership structure that is outlined in greater detail in the chapter »Business model and strategy – organizational structure.«

Market dynamics in 2022

In 2022, global supply chain disruptions and surging freight costs continued to drive supply chain strategies toward regionalization and higher resilience. Increasing supply chain uncertainties and cost volatility put pressure on inventories along the supply chain. As a result of the disruptions faced in 2021 and 2022, customers increasingly require suppliers to ensure supply chain resilience and transparency.

In 2022, a growing global need for more sustainable ingredients also became evident, particularly in terms of their environmental footprint. Ingredients with a lower carbon footprint and a higher renewable carbon index (RCI) are key driving forces for innovation in the market. Customers are looking for ingredients that can deliver significant improvements in both factors while maintaining the technical performance of their formulations and products.

How Business Area Care Chemicals created value in 2022

In the full year 2022, sales in the Business AreaBusiness AreaFor the financial reporting, Clariant grouped its businesses in three core Business Areas: Care Chemicals, Catalysis, and Natural Resources. As of 1 January 2023, the Group conducts its business through the three newly formed Business Units Care Chemicals, Catalysts, and Adsorbents & Additives and will report accordingly as of the first quarter of 2023.View entire glossary Care Chemicals increased by 28 % in local currency and by 24 % in Swiss francs, with the full integration of Beraca contributing approximately 1 % of this sales growth. Both Consumer Care as well as Industrial Applications sales rose at rates exceeding 20 % on the back of strong market demand, especially during the first nine months of the year. The absolute Care Chemicals sales levels in 2022 significantly exceeded full year 2019 pre-pandemic levels.

The EBITDAEBITDAEarnings before interest, taxes, depreciation, and amortization.View entire glossary margin in the full year 2022 increased to 22.3 % from 20.7 %. This positive development resulted from active price management to address raw material cost inflation, supply chain constraints, and energy and logistic cost increases, as well as from the continuous portfolio improvement toward more innovative and sustainable offerings to address customer needs. The full year 2022 was a strong year in terms of launches of innovative and sustainable solutions to Clariant’s customers as described in the next section.

New partnerships and products

In February 2022, Clariant unveiled new Vita 100 % bio-based surfactants and polyethylene glycols. With a Renewable Carbon Index (RCI) of at least 98 %, these products help to remove fossil carbon from the value chain. They are based on sugar cane or corn, which are fully segregated along the value chain from the field to the final consumer product. Vita surfactants have a significantly lower carbon footprint compared to their fossil analogues. At the same time, they are chemically equivalent to Clariant’s fossil versions, offering the same performance and efficiency to formulators and brand owners. Therefore, Vita products support manufacturers in maximizing the bio-based carbon content of consumer goods such as detergents, hair and body shampoo, paint, industrial lubricants, and crop formulations.

In August 2022, Clariant reached a definitive agreement for the divestment of its Quats business to Global Amines Company Pte. Ltd., a 50/50 joint venture owned by Clariant and Wilmar, Asia’s leading agricultural business and oleochemicals business globally. The divestment is a further step in Clariant’s portfolio transformation to focus operations purely on specialty chemicals. Quats are quaternary ammonium compounds, a group of chemicals used for a variety of purposes, including as preservatives, surfactants, and as antistatic agents. They are used in a wide range of commercial, industrial, and consumer products. The business maintains an excellent reputation as a leading supplier of quats with proprietary technology and a good service reputation. The transaction is subject to regulatory approvals and customary closing conditions and is expected to be consummated in the first half of 2023.

In September 2022, Clariant showcased one of the largest ingredient portfolios of natural actives, oils, butters, and clays in the industry. This range of naturals for the cosmetics market is provided by Beraca, a Brazilian personal care specialty company that was fully acquired by Clariant in 2021. Beraca is located in the Amazon region and has outstanding expertise in natural and organic certified ingredients such as fats, oils, and botanicals. Ethical sourcing commitments in close collaborations with local communities help to keep natural environments intact, while brands benefit from the transparency and traceability from plant to ingredient. The new product line features products such as the innovative new skin care ingredient Ethience® Protect and offers proven efficacy and science-backed claims for skin, hair, and body care.

FEATURED STORY

Sustainable sourcing – protecting the skin by protecting the Amazon forestThe »Queen of the Amazon« is a tall, strong beauty who regularly showers the floor of the rainforest with precious gifts – Brazil nuts. By using a byproduct from Brazil nut oil extraction for our skin care ingredient Ethience® Protect, we contribute to the Sustainable Development Goals 3, 12 and 17.Learn more

In October 2022, Clariant launched Genapol® Complete, a new product for the high-performing automatic dishwashing segment. Genapol® Complete is the first environmental label-compatible surfactant capable of achieving excellent rinse and very good overall drying performance, cleaner machines, and CO₂ product footprint savings. It is derived from natural oil and is readily biodegradable. The natural origin of Genapol® Complete ensures a substantially lower carbon product footprint for final formulations than is possible with standard surfactants. It achieves CO₂ savings of 30 % compared to the best-in-class benchmark, with no loss in rinse performance, thus providing brands with a significant differentiating advantage for their products.

In agriculture, there is a growing interest in the data-driven and outcome-oriented practices of precision farming. Drones already play a relevant role in the targeted application of fertilizers, and drone spraying is also a highly interesting approach when it comes to pesticides. However, drone-assisted pest management still has to overcome a number of challenges: As drones have small tanks, they need to carry a highly concentrated mix of actives. Also, they have to spray very fine drops to be effective – but if the droplets are too small, wind drift makes the application less efficient. In order to tackle these issues, Clariant has created DropForward™, a focused approach to drone-specific adjuvants and formulations. The first DropForward™ solution, called Synergen® DRT, was introduced to the markets in April 2022. This adjuvant helps to control the drift and volatility of droplets, while also improving the coverage and penetration of the actives in the leaves. This boosts biological performance and makes drone spraying more sustainable and environmentally friendly.

New locations

In December 2022, Clariant held a groundbreaking ceremony to expand its Care Chemicals facility in Day Bay, Huizhou, China, to boost its support for pharmaceutical, personal care, home care, and industrial application customers. The CHF 80 million investment will see capacity increases for existing products as well as the introduction of new products by the end of 2024. The site will also become a new global hub for Clariant’s healthcare business support, speeding up the supply of high-quality ingredients for life-changing medicines.

Innovation activities

In June 2022, Clariant launched »BeautyForward™ 6« – a digital tool that facilitates the research and selection of natural ingredients for personal care formulations. The tool features standardized data on the Renewable Carbon and Natural Origin Indices of over 800 ingredients for personal care applications, including over 300 ingredients from Clariant’s own portfolio. BeautyForward™ 6 calculates the percentage of natural content of any formulation according to the ISO 16128 methodology and showcases the individual impact of specific ingredient choices on formulation naturality. Available on Clariant’s own ClariHub platform, the tool allows users to create their own natural formulation from scratch or to choose and edit a series of exemplary and customizable skin and hair care formulations.

In October 2022, Clariant launched ClariCoat, a new digital platform for paints and coating specialists. ClariCoat’s offering is unique in the paints and coatings industry. It allows for customized property selection covering a wide range of performance criteria, from liquid paint stability and workability to sustainability, to name a few. Once the criteria selection is complete, the product recommendation engine proposes the most suitable additives covering the needs of the paint formulator. The platform is available for registered users on the Clariant website.

Q&A

Christian Vang

Business President Care Chemicals and Americas

Member of the Executive Steering CommitteeExecutive Steering CommitteeThe Executive Steering Committee (ESC) is authorized by the Board of Directors to steer the company. It has overall strategic and financial responsibility, including for our profit and loss statement. The ESC consists of the Chief Executive Officer (CEO), the Chief Financial Officer (CFO), and the three Business Presidents.View entire glossary

In the Business Unit Care Chemicals, consumer trends have a major influence on Clariant’s business. Which trends are most important, and what does Clariant have to offer with respect to these trends?

Most trends today are anchored around sustainability, with CO₂ footprint reduction driving both our innovation and sourcing. We recently established a joint venture in India, Clariant IGL Specialty Chemicals Private Limited. In doing so, we have taken a lead position in providing the world with products and solutions based on our bio-derived ethoxylates.

You also have responsibility for the complete Americas region. What drives Clariant’s business in this part of the world?

Clariant has a long-standing presence in the Americas region. But despite the growth in recent years, we are still underrepresented compared to our presence in other regions. So, the drive is to further lead innovation and optimize the manufacturing footprint in the Americas region.

What is your vision for the business unit?

I want to continue our growth path by delivering innovative solutions and products that support our customers and end markets in their sustainability transformation. I also intend to further optimize our portfolio by pursuing both organic and inorganic growth opportunities. And I want to make sure that everyone feels comfortable with our new organizational setup and embraces this positive change.

Clariant recently introduced a new set of values. Which of these values has played the biggest role in your career so far?

I feel a very strong connection to the value »Win with our customers«. First of all, I think that our customers are the reason why we exist as a company. But I also believe that winning with customers can be a truly rewarding experience for everyone at Clariant. That is why I would like everyone in this company to appreciate that every little decision in our work can have a meaningful impact on our customers.

Certifications and awards

In February 2022, Clariant’s TexCare® series received Henkel’s »Best Innovation Contributor Award Laundry & Home Care 2021 – Runner Up.« TexCare® is an advanced soil release polymer technology for laundry detergents that combines best-in-class dirt protection with environmental benefits: Polymers form a protective film on clothes that reduces staining and graying. This helps to reduce the number and temperature of washing cycles, which in turn saves water and energy.

In 2022, Clariant further strengthened its position in the Active Ingredients market with the launch of three new award-winning Active Ingredients. In particular, Clariant was awarded several BSB Innovation Awards 2022 for Active Ingredients: Gold for Rootness® Awake in the category »Environment,« Silver for Galactinol Advanced in the category »Actives,« Silver for Prunizen® in the category »Natural Products,« and Silver for the formulation concept Beauty Wizard in the category »Applied Concepts.« Clariant was also awarded the Ringier Technology Innovation Award 2022 for Prunizen® in China, which recognizes innovative ingredients based on criteria such as product efficacy, functionality, and safety.

Ongoing developments

Clariant is a worldwide technology leader in premium rheology modifiers for Personal Care, with the well-known Aristoflex® range. Premium rheology modifiers are a growing sector in Personal Care, driven by premiumization of skin care products aiming to deliver a sophisticated sensory experience to consumers. Clariant has been upgrading its premium rheology modifiers range with one additional product: Aristoflex® ECO-T. This Aristoflex® version was designed to address customers aiming to have the sophisticated premium sensory of Aristoflex® while improving the sustainability profile of their formulations. Aristoflex® ECO-T is a combination of a natural bio-polymer with Clariant polymerization technology, achieving a Renewable Carbon Index of 71 % and a readily biodegradable profile, surpassing alternative technologies available in the market.

Business Area Care Chemicals