07 October 2008 00:00 [Source: ICB]
German chemical companies are concentrating on reaching customers and becoming more flexible
GERMANY'S CHEMICAL producers have traditionally been at the cutting edge of innovation, although in the past, as one retired manager points out, many seemed to be so busy developing technology that they forgot to sell it.
This attitude is changing, as a new management generation recognizes the need to get closer to customers and markets.
Alfred Oberholz, managing board member of German specialty chemicals company Evonik Industries, says: "Today, we have to see at the earliest stage of an innovation what business opportunities it will open. It's not enough to say: 'I've discovered a new molecule, let's see if the world needs it.'"
With 5% of annual sales invested in research and development (R&D), the German chemical sector has expanded its budget by nearly 5% a year since 1995, according to the German Chemical Industry Association (VCI). This year, the total will be almost €10bn ($13.5bn), with a raft of new projects and processes shaping up.
A study published last year for VCI and German labor union IG BCE said the sector was the country's third-highest for research spending. But although automotive and electrical and electronics spend more, the chemical industry is regarded as directly or indirectly responsible for 20% of German product innovation.
Along with the EU's promotion of clusters, the Federal Ministry of Education and Research (BMBF) drive for national excellence has sparked chemical producers' creativity, with energy saving and resource preservation at the forefront.
Life sciences were the pioneer, but Germany now has clusters for everything from high-tech plastics to white biotechnology and solar energy - fields in which the country leads technologically.
Collaboration between chemical producers and technology think-tanks such as Fraunhofer, Max-Planck or Dechema, is one sign of the more flexible approach. Chemical managers and professional societies are encouraged that jobs in industry are becoming more attractive to university graduates and those with post-doctorates.
VCI figures confirm that, after years of stagnation, the number of German chemical industry research staff increased by 4% in 2006 to 41,400.
The largest chemical companies account for more than 90% of new products, but many small and medium-sized enterprises and start-ups are pursuing innovative projects with the majors or with engineering powerhouses such as Linde, Uhde and Lurgi.
Evonik's Science-to-Business (S2B) centers are an example of the cooperative approach. The vertical integration of related R&D activities under one roof links user industries with academic institutions. "This helps translate scientific knowledge rapidly and efficiently into successful projects," says Oberholz.
The Eco² S2B center that opened on October 1 will be funded with €50m until 2013. Twenty-one energy efficiency and climate protection projects have been identified. This is the first major research project linking the knowledge of Evonik's predecessors, specialty chemicals producer Degussa and energy giant RAG, says Eco² head Stefan Nordhoff. The S2B Bio, dedicated to white biotechnology, builds on Degussa's leading amino acids position. Biofuels, especially nonfood crops such as jatropha, for which the company can supply alcoholate catalysts, are another focus of the center's work.
In its pursuit of innovation for printed circuits, Evonik's Nano S2B center is eyeing cheaper, alternative ways to produce solar cells. In connection with its nanotechnology research, the company now produces its own antennas for experimentation with ultra high-frequency radio frequency identification (RFID) tags, using a silver paste-based printing process. "This reflects our forward integration strategy," says Oberholz.
Evonik's developments in ceramic separators for lithium-ion batteries used in hybrid automobiles made it a finalist in last year's competition for the German government's Future Prize. Not all the company's research takes place in its S2B centers. New developments in traditional fields are usually pursued alone. At last month's annual European Petrochemical Association meeting in Monaco, methacrylates unit Rohm unveiled a new methyl methacrylate (MMA) process.
BASF is targeting annual sales of more than €4bn through to 2010 from new or improved products and applications. To this end, BASF Future Business (BFB) finances projects in fields with projected above-average long-term growth. Cooperation with external partners is emphasized.
Acquisition of stakes in promising start-up businesses is the domain of BASF Venture Capital (see page 32), a BFB subsidiary, while BASF Fuel Cell explores fuel cell technology.
To manage its vast R&D portfolio effectively, the world's largest chemical producer has created five key clusters - energy management, raw material change, nanotechnology, plant biology, and white (industrial) biotechnology - with a combined budget of €900m from 2006-2008.
Projects pursued "are not low-hanging fruits, but place the highest demands on technical implementation and involve high risks," stresses Thomas Wehlage, head of the energy management cluster, which is studying organic solar cells, storage media for hydrogen and the membrane electrode assembly of portable fuel cells.
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One of its major projects is the mutual conversion of thermal to electrical energy. Thermoelectrically powered air conditioners that convert waste heat from automotive engines into electrical energy have "massive market potential", says senior manager Georg Degen.
In the raw material change cluster, BASF is examining renewable routes to olefins and aromatics. It is particularly enthusiastic about an innovation involving a heterogenous catalyst for the old Fischer-Tropsch process to convert carbon monoxide and hydrogen into hydrocarbons.
"This will broaden our raw materials base, as the synthesis gas [syngas] can be obtained both from fossil fuels and renewable resources," says managing board member Andreas Kreimeyer. "At today's naphtha prices, the cost effectiveness is established."
BASF's nanotechnology cluster is developing foams with outstanding insulation properties, while white biotechnology is leveraging biocatalysis and fermentation know-how to produce polymers from renewable resources.
The Joint Innovation Lab Organic Photovoltaics links research by BASF, German pharmaceutical giant Merck KGaA and other partners on semiconductor materials to replace silicon in solar cells. The Forum Organic Electronics initiative, in which BASF and Merck also participate, has been recognized by the BMBF as a "top regional cluster" for studying organic light-emitting diodes.
Compatriot life sciences company Bayer is another innovator, with a current focus on medical and security technology and plant routes to new pharmaceuticals.
"A chemical plant in a briefcase" is what BTS calls the new modular system developed by its offshoot Ehrfeld Mikrotechnik BTS. The microplant - without peripheral pumps, collecting vessels and storage containers - "easily fits inside a briefcase", says project manager Alexander Azzawi. The largest modules can produce up to 10,000 tonnes/year.
Bayer HealthCare, which benefits from the largest chunk of corporate R&D money, is actively pursuing renewable routes to new pharmaceuticals. "Growing" drugs in tobacco plants is, as yet, a niche approach.
Bayer CropScience's concentration on sustainable solutions to improve agricultural yields recently won the Successful Practice Award of the Fraunhofer Institute for Production Technology for "innovation management in agribusiness."
European tire makers now rely on the sandwich technology of BMS subsidiary Epurex. Soft, low-melting grades of thermoplastic urethane (TPU) film are used as elastic inlays to increase the flexibility of the PC in RFID antiforgery chips in tire walls.
With Germany's Etimex Primary Packaging, BMS has developed a TPU film for solar energy modules, and its Makrofol PC film is helping make UK driving licences counterfeit-proof. The gas-phase phosgenation technology for toluene di-isocyanate (TDI), which BMS chief executive Patrick Thomas once referred to as "the holy grail of making TDI," was nominated for last year's ICIS Innovation Awards. The technology claims to cut energy consumption by 60%, solvent input by 80% and carbon dioxide emissions by 60,000 tonnes/year, compared with conventional plants. It is being scaled up to 300,000 tonnes/year and is planned to be used in all the firm's TDI plants from 2013.
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