Clariant bets on booming NEV sector

More than half of the world's chemical production growth over the next five years will take place in China, which makes the country the world's largest producer and consumer of chemical products, a core strategic market for Clariant and all chemical companies, the CEO of the Swiss specialty chemicals firm said.

The company announced last week the completion of a 100 million Swiss franc ($124.3 million) expansion of its Daya Bay production facility in Huizhou, Guangdong province.

The investment, which brings a second production line to full operation in November, solidifies Clariant's strategic anchor in the world's fastest-growing chemical market, driven by the strong growth in Asia, which has surpassed other regions in global chemical output, said Conrad Keijzer, CEO of Clariant.

The investment strengthens Clariant's capacity to meet surging demand for sustainable flame-retardant solutions, particularly in the rapidly expanding e-mobility and electrical and electronic segments, he said.

Keijzer noted that the expansion allows the firm to "more closely focus on the core market of South China", a region experiencing robust growth.

Geopolitical shifts, tariff pressures and evolving supply chain dynamics underscore the importance of local production, he added, stating that this move ensures supply chain resilience.

According to Keijzer, approximately 50 percent of Clariant's products supplied to the Chinese market are manufactured locally, with about 80 percent of the required raw materials sourced domestically.

China currently accounts for around 10 percent of Clariant's global sales, a figure the CEO aims to lift to approximately 14 percent in the coming years through such targeted investments.

The new facility will serve downstream sectors including new energy vehicles, pharmaceuticals, personal and home care, industrial applications and agrochemicals, he said.

He believes the demand for flame retardants is rising significantly, especially as EVs transition to 800V and higher voltage systems, requiring more stringent fire safety solutions for battery components, charging equipment, cables and connectors, as China's booming NEV sector is creating massive opportunities across the industry chain.

The global chemical industry is especially in need of advanced products, particularly new chemical materials and high-end fine chemicals, said Fu Xiangsheng, vice-president of the China Petroleum and Chemical Industry Federation.

Angela Cackovich, president of the adsorbents and additives business unit, and member of the executive steering committee of Clariant, said the investment will better support the growth of engineering plastics.

China's NEV fleet has "enormous growth potential" for high-performance, environmentally friendly flame retardants, she said.

"Our continued investment in the Daya Bay facility underscores our commitment to supporting the significant growth of engineering plastics applications in e-mobility, and electrical and electronic segments."