Wacker-Chemie GmbH

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Type: Jointly Owned by Hoechst AG and Dr. Alexander Wacker
Address: Hanns-Seidel-Platz 4, D-81737 München, Germany
Telephone: (49)(89) 6279-01
Fax: (49) (89) 6279-1770
Web: http://www.wacker.com
Employees: 16,220
Sales: DM 4.86 billion ($2.48 billion) (1999)
Incorporated: 1914
NAIC: 325211 Plastics Material and Resin Manufacturing; 325212
SIC: 2821 Plastics Materials & Resins; 2822 Synthetic Rubber; 3674 Semiconductors & Related Devices; 2869 Industrial Organic Chemicals Nec

Wacker-Chemie GmbH is a worldwide leader in the manufacture of specialty chemicals. It is the world's second largest manufacturer of silicone carbide and number three among the manufacturers of silicone wafers for integrated circuits. Headquartered in Munich, Germany, the company also produces basic organic and inorganic chemicals and materials including catalysts, polymers, and sealants. About one-third of Wacker's sales come from its semiconductor's division; a quarter is generated by the polymers division; 37 percent derive from the silicones division; and about five percent come from the materials division. Wacker-Chemie has over 60 subsidiaries around the world, with manufacturing plants throughout Europe, the United States, and Asia. Descendants of the Wacker family own 50 percent of the company.

The origins of Wacker Chemie may be traced to Alexander Wacker, who was born in 1846 in the German city of Heidelberg. As a young man Wacker hoped to attend a university but ended up apprenticing as a clerk in the textile industry. The business skills he learned there would prove an important asset when he met Sigmund Schuckert in 1877.

Schuckert, a gifted mechanic, had invented a flat ring dynamo machine that transformed water power into electricity. Together, Wacker and Schuckert started a business partnership at Schuckert's Nuremberg workshop. While Schuckert ran the workshop, Alexander Wacker oversaw the business, which employed 12 assistants and three apprentices. As a result of Wacker's successful marketing efforts, S. Schuckert & Co. grew rapidly. By 1885 the company employed 46 clerks and 228 workers. The company's dynamos powered Munich's first electric tram line which started service in 1886.

Along with such dynamic growth came financial pressures, and Alexander Wacker decided to take the company to the next level. In 1892 he reorganized the company as the Elektrizitä× AG, vormals Schuckert & Co. The same year his partner Sigmund Schuckert retired, and Wacker became managing director. Within only ten years, the so-called 'Schuckertwerke' had earned a worldwide reputation. By 1902 the company had 7,413 workers and 1,082 clerks on its payroll. Its employees worked in 36 branches and technical offices in Germany. In addition to that, the Elektrizitä× AG set up a worldwide sales network.

In 1902 Wacker started a new venture of his own. Backed with financial support from a friend, he bought out the electro-chemical side of the Schuckert business, specifically its carbide factories. Together with three business partners--Bosnian Bosnische Elektrizitä× AG, Swiss Lonza AG, and Norwegian Aktieselkabet Hafslund--he formed a new company for the production of carbide. One year later Wacker transformed the electrochemical laboratory he had founded before the turn of the century into the Consortium für elektrochemische Industrie, an independent limited liability company. The Consortium became the central research lab for the new group of chemical companies which were all shareholders in the facility. Alexander Wacker defined its goal as the development of technologies for the industrial use of acetylene, which made him a pioneer in acetylene chemistry. Acetylene would become one of the most important basic chemicals until well into the 1960s when its place was taken by petrolchemistry. The Consortium was a breeding ground for numerous patents.

Around 1907, Alexander Wacker took the next steps in his career as a businessman. He tested Bavarian rivers for their potential as an energy source in order to secure a supply of sustainable energy for the energy-intensive production of basic chemicals. He also researched the best location for a new carbide plant. Finally, he purchased a property in the Burghausen forest on the banks of the Bavarian river Salzach. Two months after Germany declared war on Russia, in 1914, Alexander Wacker registered the first enterprise of his own under the name Dr. Alexander Wacker, Gesellschaft für elektrochemische Industrie KG, eventually shortened to Wacker-Chemie.

Finally, at age 70, he completed what he had dreamed of for most of his life. In December 1916 Wacker-Chemie started the first mass production of the basic chemicals acetaldehyde, acetic acid, and acetone in the plant in the Bavarian city of Burghausen. That same year, company headquarters were moved to Munich. At that time Wacker-Chemie employed 403 workers and 51 clerks.

Acetone was one of the chemicals most urgently needed by Germany's war economy, so the plant went into operation without its own power supply. Power was provided by nearby Reichenhall by means of Bavaria's first high-voltage power line. The first tank full of acetone was shipped from the Burghausen plant in January 1917. In 1918 the Burghausen plant started producing tetrachloroethane and trichloroethylene, and Wacker's research lab was also moved to Munich. The same year Elektrobosna and Aktieselskabet Hafslund withdrew from the partnership business. In 1919, during the first year of peace after World War I, Wacker-Chemie began the production of acetic ester, oxybutyric aldehyde, crotonaldehyde, butanol and butyl acetate.

The 1920s brought economic turmoil to Germany and the world. In 1923 a new currency, the Rentenmark, was introduced in Germany after hyperinflation had hit its peak. The second severe economic downturn came with the stock market crash in 1929 followed by the Great Depression. However, for Wacker-Chemie the 1920s were a decade of dynamic growth. In 1920 the production of ethyl acetate began in the Burghausen plant. A year later a new technology for acetylene purification was implemented and chlorine-alkali electrolysis with diaphragm cells made the production of chlorinated hydrocarbons possible. In 1922 Wacker-Chemie produced shellac, its first synthetic, and started developing pesticides as well. This was also the year that Alexander Wacker died, at age 75.

Over the following years Wacker-Chemie continued to expand its product range, introducing low-carbon ferroaloys, polyvinyl alcohol, actetic anhydride from actetic acid, Wacker acetate silk from acetyl cellulose, and vinyl acetate. Wacker's copper oxychloride-based 'Kupferkalk' turned out to be a powerful fungicide for infested hop crops and vineyards. Wacker-Chemie also played a role in the development of stainless steels as Germany's only producer of calcium-silicon alloys and low-carbon ferrochromium. Another important product for Wacker-Chemie during this time was carbide as an end product, for example welding carbide.

The 1920s were also successful years for the Consortium. In 1922 it registered a patent for a technology to produce anhydride from cellulose acetate, or ketene. Another field for research was in the usefulness of chlorine products as pesticides. In 1924 researchers at the Consortium discovered polyvinyl alcohol, which led to the production of the first solely synthetic fiber called Polyviol. In 1928 the Consortium published for the first time results of their work on the polymerization of vinyl chloride and started intense testing the year after.

During this time Wacker-Chemie significantly expanded its production infrastructure. The necessary financial boost came from a new business partner, Farbwerke Hoechst AG, which acquired 50 percent of Wacker's share capital in 1921. In 1922 Wacker's own water-power station--the 'Alzwerke'--delivered electricity for the first time to the Burghausen plant. The war had delayed the project which at times employed as many as 3,000 workers. In the same year the company's own railway station was opened. The Burghausen plant was expanded, three new production plants were acquired or built and a share was bought in Wacker's Bavarian distribution partner Christian Dederer GmbH. In 1924 Wacker obtained a lease on a salt mine for 30 years which secured the supply of rock salt for chlorine electrolysis.

By 1930 Wacker's Burghausen plant had grown into a significant chemical production complex. However, because the economy was still depressed, Wacker's workforce was cut by ten percent and work hours were shortened. In 1933 Wacker-Chemie acquired Elektroschmelzwerk Kempten, a silicon carbide producer, and new production lines were opened almost every year. The highlight for Wacker-Chemie research was the development of a suspension technology for the production of polyvinyl chloride (PVC) which opened a new chapter in the history of plastics. In 1938 PVC Wacker-Chemie started PVC production in Burghausen. Other Wacker products of that time included synthetic belt drives, medical sutures, shatter-proof glass, and Drawinella, the first acetate staple fiber similar to wool.

By 1939, the year Hitler attacked Poland and World War II began, Wacker-Chemie had 4,125 employees and was generating 75 million marks in sales. Basic chemicals were needed during the war, and Wacker-Chemie once more expanded its production capacities. However, when the Western Allies intensified the war against Germany, Wacker-Chemie suffered significant setbacks. First of all, the Consortium and laboratories at its headquarters were completely destroyed by bombings in 1943 and 1944. In 1945 Wacker-Chemie came under American administration. Three anti-Nazi activists were killed at Wacker's Burghausen just before the surrender to the Allies, and two managing directors were arrested after the surrender. Nearly all of Wacker's production facilities were closed down between May and October 1945. Two of Wacker's production plants, the salt mine and the Alzwerke power plant, were split from the company in order to prevent too great a concentration of economic power. Most significant of all, after the facilities in Burghausen were dismantled by the Soviets, Wacker's two eastern German production plants were expropriated and nationalized. Those two plants in Mückenberg and Tschechnitz accounted for two-thirds of Wacker's total output. In the first postwar years, it did not seem likely that Wacker-Chemie would be able to survive--but it did.

In 1947, when research started again in Burghausen, Wacker-Chemie opened the silicon chapter of its history. Three years later, the research had turned out to be so promising that an experimental production facility was established. That facility produced silanes--the first preliminary ingredient for silicones--as well as the first silicon products such as a silicone-insulated high-voltage motor. In 1951 the range of Wacker-Chemie silicon products was expanded to include impregnating agents for textiles, release and antifoam agents, pastes, and emulsions. In 1953 Wacker Chemie produced the first hyperpure silicon for semiconductors as well as the first silicon rubber. In 1955, the year when the Federal Republic of Germany regained sovereignty and the last prisoners were returning from Russia, Wacker-Chemie started building its first facility for the mass production of silanes and silicones.

In 1953 a law was passed that gave 51 percent of Wacker-Chemie to Alexander Wacker's heirs while 49 percent remained the property of Farbwerke Hoechst AG. At the company's first regular business meeting, on April 8, 1953, the company was transformed into a limited liability private company, and its name changed to Wacker-Chemie GmbH. In 1958 the share ratio between the Wacker family and Farbwerke Hoechst was changed again to 50 percent each. By the end of the 1950s the number of Wacker employees exceeded the prewar number.

The German economy boomed in the 1960s and so did the German plastics industry. It was during the same time period that polyvinyl plastics based on carbide were succeeded by more economical petrochemical-based materials. In 1960 a new Wacker plant in Cologne started operation. It was the first production line that used ethylene instead of carbide acetylene to make acetaldehyde. Three years later the acetylene-based production of acetaldehyde at the Burghausen plant was closed down. In 1965 Wacker Chemie, Farbwerke Hoechst, and Marathon Oil agreed to built a petrochemical refinery in Burghausen. The refinery began deliveries of ethylene and petrochemical acetylene three years later. Finally, on May 9, 1969, the carbide production in Burghausen, which had significantly contributed to the early success of Wacker-Chemie, was closed down. Other production lines that were shut down during the 1960s included chemical purification equipment, the cellulose acetate fiber Drawinella, and hexachlorethane. At the same time, demand for silicon products was on the rise. Beginning in 1961, hyperpure silicon was produced regularly and semiconductor production was expanded in Burghausen. In 1960 Wacker's hyperpure silicon was sold to the United States for the first time. In 1965 Wacker-Chemie acquired Monosilicon, a manufacturer of hyperpure silicon based in Los Angeles and established its American subsidiary Wacker Chemicals Corp. based in New York.

Three years later Wacker's German silicon activities were organized under the new Wacker-Chemitronic Gesellschaft für Elektronik Grundstoffe GmbH in Burghausen. Another important step for Wacker-Chemie in the 1960s was the acquisition of the Stetten salt mine, which secured the supplies of rock salt needed for the chemical processes at the Wacker plants.

The 1970s marked the beginning of massive international expansion for Wacker Chemie. Initiated by two of Wacker's top executives--CEO Ekkehard Maurer and marketing director Hans Denis--the company started establishing numerous foreign subsidiaries around the world. Wacker-Mexicana S.A. was set up in 1971 and followed by Wormerveer-based Wacker-Chemie Nederland B.V. in the Netherlands and Vienna-based Wacker-Chemie Ges. m.b.H. Salzburg in Austria in 1972. In 1973 marketing subsidiaries Wacker-Chemie (Schweiz) AG in Liestal and Wacker-Chemie S.A. in Brussels were set up. Subsidiaries in Denmark, Great Britain, Brazil, and Spain were founded between 1975 and 1978. Moreover, in 1978 Wacker-Chemie founded two more companies in the United States: Wacker Siltronic Corporation based in Portland, Oregon, and silicon carbide producer ESK Corporation based in Hennepin, Illinois. In 1979 Wacker bought a share in the Canadian firm Henley Chemicals Ltd. located in Ontario, which had represented Wacker in Canada.

With personal computers and other electronics products based on microchips flooding the world, silicon was Wacker's flagship product in the 1980s. In 1980 a brand-new silicon factory was opened at Wacker Siltronic in Portland, Oregon; another began production in Sao Paulo, Brazil, the following year. In 1985 the first Wacker plant started making silicone in Japan, and by 1987 Wacker-Chemie was the third largest producer of silicone in the world. In 1988 the silicone division contributed DM 713 million or 26.5 percent to Wacker's total sales. Besides the well-known silicon wafers used in the microelectronics industry, Wacker-Chemie made over 1,500 silicon products used in the construction, transportation, pharmaceutical, cosmetics, paper, textile, and many other industries in the from of fluids, resins, or elastomers. These products were made in the most sophisticated production facility of its kind in Europe, in Burghausen, where all production stages were carried out under one roof, as well as in the United States, Mexico, Brazil, Australia and Japan.

During the 1980s Wacker's network of worldwide subsidiaries was expanded significantly into Italy, Portugal, Greece, Sweden, Finland, Singapore, and South Africa. In 1988 the company was reorganized into five business divisions: vinyl acetate, polymers and organic chemicals; silicones, silanes and silicas; PVC and chlorine derivatives; semiconductors; and materials. Each division was headed by a director with worldwide responsibility. Wacker's sales passed the DM 3 billion mark for the first time in 1988; 14,000 people worldwide were on the company's payroll. In 1995 Peter-Alexander Wacker joined the company's management board. The great grandson of Wacker Chemie's founder was the first Wacker family member since the 1960s to join the top management team.

In the late 1990s, Wacker Chemie's semiconductor division suffered during the Asian economic crisis; in 1998 Wacker's profits decreased by two-thirds. Despite this setback, Wacker continued to pursue a vivid globalization strategy. In 1998 Wacker-Chemie entered a joint venture with India's largest silicone manufacturer, Metroark. In the same year the company launched two joint ventures with Air Products and Chemicals: emulsions producer Air Products Polymers L.P. (APP) and redispersible powders producer Wacker Polymer Systems L.P. (WPS). A new production facility for silicone wafers in Singapore began production in 1999; technical service centers were also opened in Sao Paulo and Shanghai. In spring 2000 Wacker announced that it would sell its two PVC joint ventures with Celanese, Vinnolit Kunststoff GmbH, and Vintron GmbH, which concluded the company's divestment strategy in the field of inorganic chemicals.

To secure future growth Wacker-Chemie worked in five strategic areas, including biologically-produced building blocks for the life sciences such as cysteine and cyclodextrin, a new production process for actetic acid from cheap raw materials, new materials for hard discs, a pilot line for the mass production of 300-mm hyperpure silicone wafers, and ceramics materials for the auto industry. In 1998 partner Hoechst announced that the company was planning to sell its 50 percent share in connection with the merger of Hoechst AG and Rhone-Poulenc to form Aventis S.A. Since then Wacker-Chemie continued to look for a new solution that would ensure the financial resources necessary to secure Wacker's future growth.

Principal Subsidiaries

Wacker-Chemie GmbH, Werk Burghausen (Germany); Elektroschmelzwerk Kempten GmbH (Germany; 99.67%); Wacker Polymer Systems GmbH & Co. KG (Germany; 80%); Wacker Siltronic Gesellschaft für Halbleitermaterialien AG (Germany); Wacker Siltronic Singapore Pte. Ltd. (80%); Wacker Siltronic Corporation; Wacker Asahikasei Silicone Co., Ltd. (Japan); Céramiques & Composites S.A. (France); Wacker Metroark Chemicals Limited (India; 51%); Wacker Mexicana, S.A. de C.V. (Mexico); Elektroschmelzwerk Delfzijl B.V. (Netherlands; 99.67%); Wacker Biochem Corporation; Wacker Engineered Ceramics, Inc.; Wacker Polymer Systems L.P.; Wacker Chemicals Holding International B.V. (Netherlands); Wacker Chemical Holding Corp.; Kelmar Industries (80%).

Principal Divisions

Semiconductors; Polymers; Silicones; Materials.

Principal Competitors

Dow Corning Corp.; General Electric Company; Compagnie de Saint-Gobain S.A.

Further Reading

'Air Products, Wacker-Chemie Launch Venture,' Adhesives Age, December 1998, p. 38.

Alperowicz, Natasha, 'Wacker-Chemie Confirms Huls Deal,' Chemical Week, December 9, 1998, p. 17.

------, 'Wacker Forms Silicones Joint Venture,' Chemical Week, November 4, 1998, p. 26.

Chapman, Peter 'Wacker Building US Facility to Enter Cyclodextrin Market,' Chemical Market Reporter, March 24, 1997, p. 1.

Hume, Claudia, 'Wacker Family Negotiates Purchase of Hoechst's 50% Stake,' Chemical Week, November 10, 1999, p. 24.

Milmo, Sean, 'Wacker Targets Biochemistry for Rapid Growth,' Chemical Market Reporter, November 8, 1999.

'75 Years Wacker: Pictorial Chronology of a Company,' (special issue) Werk + Wirken, Munich: Wacker-Chemie GmbH, 1989, 96 p.

'Wacker; Chemische Spaltung,' Focus, May 31, 1999, p. 254.

'Wacker erhöht die Investitionen in Sachsen,' Frankfurter Allgemeine Zeitung, March 27, 1998, p. 20.

'Wacker Negotiates Silicon Carbide Divestment,' Chemical Week, April 19, 2000, p. 8.

— Evelyn Hauser


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