Sector-Specific Conditions

We expect economic trends in the sectors relevant to our business to be largely positive in 2018.

Chemical Industry to Post Slight Gains in 2018

After a good 2017, the German Chemical Industry Association (VCI) expects the chemical sector to remain on a positive trajectory in 2018. According to the VCI, chemical production will climb by 2 percent. The VCI forecasts that total sales will rise 3 percent. On the export side, Germany’s chemical companies will continue to benefit from the robust global economy. In domestic markets, they will be supported by strong industrial demand.

WACKER’s chemical divisions see major growth opportunities in BRIC countries and other emerging markets. Rising affluence in emerging economies will continue to lift WACKER’s sales in countries such as China and India, as well as across Southeast Asia. WACKER’s portfolio has many value-added products that are needed by new customer groups.

Global Construction Industry to Remain on Growth Trajectory

According to research institute B+L Marktdaten GmbH, the construction industry will continue expanding over the next few years. On average, construction volume is expected to rise by about 2.1 percent annually until 2020, with Asia as the main growth driver. B+L estimates that construction in Europe and South America is also on track for further growth, albeit at a slower pace than in Asia. North America’s construction market, on the other hand, is contracting slightly.

Construction-Industry Growth Rates by Region, 2018 to 2020

Source: B+L Marktdaten GmbH

In the coming years, renovation, energy-efficiency and sustainability projects will continue to offer WACKER good growth opportunities. At WACKER POLYMERS, we expect to grow our construction sales in every region during 2018. The main growth drivers, in our view, will be low-emission interior paints and dry-mix mortars. At WACKER SILICONES, we intend to carry on increasing the percentage of value-added specialty products in our construction-industry portfolio. Growth prospects are good for hybrid polymers (used to formulate high-performance adhesives and sealants) and for silicone sealants sold under our own brand.

Electrical and Electronics Industries Anticipate Moderate Growth in 2018

The electrical and electronics industries expect global market volumes to expand by 4 percent in 2018. According to the German Electrical and Electronic Manufacturers’ Association (ZVEI), most expansion will be spurred by Asia and the Americas, with slight gains anticipated in Europe. The ZVEI expects the electrical and electronics industries in Germany to grow by 2 percent in 2018. WACKER sees good growth prospects in silicone gels and silicone encapsulants for electronic components and in customized silicones for automotive applications, such as driver-assistance systems, sensors and optical displays.

Market Remains Challenging, But Installed PV Capacity Likely to Grow in 2018

Economic conditions for photovoltaics (PV) will again be dynamic and challenging in 2018. On the one hand, intense competition and potential new trade barriers for PV products are creating market uncertainty. On the other, levelized costs for solar power continue to drop, strengthening the competitiveness of photovoltaics relative to other energy sources. In addition, solar energy has a key role to play in achieving global climate-protection targets, since it significantly reduces specific carbon-dioxide emissions compared with fossil fuels. New markets are opening up to photovoltaics, due to its cost effectiveness and to political efforts to keep global warming below 2 ° C. The photovoltaic market is on track for further growth. China will remain the world’s largest and most important market in 2018. Other countries likely to add large amounts of capacity include India, the USA and Japan, according to market researchers at IHS. Regions with strong growth potential include Central and South America, Southeast Asia, the Middle East and Africa. Based on our own market surveys and those of third parties, WACKER expects newly installed photovoltaic (PV) capacity to range from 110 to 125 gigawatts (GW).