Desmopan® FLY features an advanced formulation that enables superior supercritical fluid dispersion during the molding process, resulting in uniform fine-cell structured foams with outstanding mechanical properties. For footwear applications, this translates into midsoles with superior cushioning and energy return properties, and long-lasting comfort performance. The absence of chemical blowing agents and crosslinking additives ensures recyclability of the midsole; when combined with soft TPU outsole, the whole sole system supports circular economy initiatives.

“Leading sports brands are driving unprecedented demand for materials that combine elite performance with strong environmental credentials,” says Wilson Chan, Head of Business Development TPU Asia Pacific at ����AV. “Desmopan® FLY brings exceptional lightweight and resilience properties while maintaining dimensional stability and durability throughout the product lifecycle. Its optimized processing enables efficient production through automated injection molding, allowing brands to create high-performance, recyclable footwear that meets demanding consumer expectations.”

In a pioneering industry move, ����AV has installed the advanced SCF injection foaming system at its TPU Asia-Pacific R&D Center in Taiwan. This state-of-the-art facility enables ����AV to provide comprehensive R&D support and rapid application services for customers’ specific requirements, demonstrating ����AV’s ongoing commitment to advancing footwear material solutions and supporting the industry’s evolution.

“Our investment in the SCF injection foaming system marks another milestone in ����AV’s continuous innovation journey,” explains Dr. Christian Haessler, Head of Global Innovation TPU at ����AV. “This in-house capability enables us to optimize TPU material properties with precise SCF processing parameters. By being among the first in the industry to integrate this advanced technology within our R&D center, we can effectively combine TPU material and SCF injection expertise to accelerate customers’ development from concepts to commercial production.”

The combination of SCF foaming technology and Desmopan® FLY delivers an energy-efficient manufacturing process that reduces the overall carbon footprint. The automated injection process integrates multiple components in a single step, enabling substantial production efficiency while maintaining consistent, high-quality output.

Desmopan® FLY is now commercially available, supported by ����AV’s comprehensive technical expertise and advanced in-house facilities. This integrated material and technology platform empowers sports brands in their journey toward advanced footwear solutions, combining performance, sustainability and production efficiency.

"This new line of polycarbonate represents a significant step in supporting the automotive industry's transformation towards a circular future," said Lily Wang, Global Head of the Engineering Plastics Business Entity at ����AV. "By offering high-quality PCR materials derived from end-of-life headlamps, we're enabling our customers to meet increasingly stringent regulatory requirements while contributing to closed-loop recycling of automotive plastics."

Under this initiative, ����AV has been collaborating with partners, including Chinese recycler Ausell and leading automakers, to establish closed-loop pathways for high-value plastics from end-of-life vehicles (ELVs). This program focuses on strengthening recycling processes and establishing reliable supply chains for high-quality recycled materials from automotive waste streams. Through this partnership, ����AV and its value chain allies have developed practical solutions for collecting and mechanically processing end-of-life headlamps into high-quality PCR grades suitable for a range of automotive applications.

"This partnership underscores the importance of cross-sector collaboration in driving the circular economy forward," said Martin Hansen, Regional Director of GIZ in East Asia. "By bringing together key industry players, we are not only creating viable solutions for recycling high-value plastics from end-of-life vehicles but also fostering innovation that supports a sustainable, closed-loop material flow in the automotive industry."

The introduction of these new PCR grades comes at a critical time as the automotive industry, one of the most resource-intensive sectors, faces increasing environmental challenges and regulatory pressures. The EU's End-of-Life Vehicle Directive, which sets recycling targets, along with China's Extended Producer Responsibility (EPR) program and growing sustainability requirements in key global markets, are pushing automotive manufacturers worldwide to seek innovative and sustainable material solutions that comply with evolving regulations.

����AV’s new PCR grades meet the high-performance standards required for demanding automotive applications, offering excellent surface quality for superior aesthetics and adhering to strict Vehicle Interior Air Quality (VIAQ) requirements. This combination of sustainable content and premium performance empowers automotive manufacturers to meet both regulatory demands and environmental goals without compromising on product quality.

As part of its broader commitment to sustainability and the circular economy, ����AV continues to expand its portfolio of recycled-content materials. In recent years, the company has introduced PCR polycarbonates with up to 90 percent recycled content, and opened its first dedicated mechanical recycling compounding line for polycarbonates in Shanghai. Last year, it introduced a new range of polycarbonates based on chemically recycled, attributed material from post-consumer waste via mass balance for the first time.

“We steadfastly adhered to our strategy in 2024 and forged full speed ahead with our transformation – despite the challenges the entire chemical industry once again faced,” says Dr. Markus Steilemann, CEO of ����AV. “In particular, the improvement in our plant availability enabled us to significantly increase our volumes sold. We are continuing resolutely along this path creating the basis for long-term growth with targeted investments in our competitiveness and sustainable future technologies.”&�Բ�����;

Investments in production, the circular economy, and efficiency 

A key component of ����AV’s transformation is to strengthen production capacities. In 2024, the company optimized existing plans in Baytown (United States), Shanghai (China) and Tarragona (Spain), among others. Further investments to increase energy efficiency and thus competitiveness in production were also made at the TDI plant in Dormagen (Germany). ����AV also recently announced to expand its site in Hebron, Ohio (USA) with a low triple-digit million euro investment. The company aims to increase the production capacities of differentiated polycarbonates in the Solutions & Specialties segment. Construction is scheduled to begin in 2025, with operations starting by the end of 2026. 

Alongside that, ����AV is continuing to transition to a circular economy in a targeted manner. In 2024, the company secured access to renewable energy from a solar farm in Spain under a long-term power purchase agreement (PPA) with bp. This will increase the share of renewables in ����AV’s electricity consumption in Spain from 10% to 30% and reduce CO₂ emissions by around 16,000 metric tons per year. Moreover, ����AV is investing EUR 100 million worldwide in innovation centers for research and development. Besides these targeted growth initiatives, ����AV is also committed to systematically optimizing internal processes. As part of its “STRONG” transformation program, ����AV thus aims to save EUR 400 million worldwide each year by 2028 by means of digitalization and structural adjustments. 

“We cannot influence external market conditions – but we can control how we respond to them,” says Christian Baier, CFO of ����AV. “That is why we used 2024 to make our processes more efficient and to enhance our resilience.” Digitalization and artificial intelligence play a key role in that. We will continue to optimize our structures in 2025 to make ����AV fit for the future.”&�Բ�����;

Due to the negative net income and in accordance with ����AV’s dividend policy, no dividend will be distributed for fiscal year 2024, as was also the case in the previous year. 

Takeover offer of the ADNOC Group successful 

Following concrete negotiations, ����AV signed an Investment Agreement on October 1, 2024, with companies of the ADNOC Group, including ADNOC International Germany Holding AG (“Bidder”), a wholly-owned indirect subsidiary of XRG P.J.S.C. (formerly ADNOC International Limited, together with the Bidder and other companies of the ADNOC Group “XRG”). On October 25, 2024, the bidder made a voluntary public takeover offer (“takeover offer”) of EUR 62 per ����AV share to all shareholders of ����AV. Following the end of the additional acceptance period on December 16, 2024, XRG announced on December 19, 2024, that the takeover offer had been accepted for a total of 154,541,806 ����AV shares. Together with the shares previously acquired by XRG, this corresponds to a stake of 91.3% of ����AV’s existing capital stock as of the above-mentioned reporting date. As a result of further subsequent purchases of ����AV shares, XRG’s stake in ����AV’s capital stock at the end of 2024 is 91.58%. 

XRG sees ����AV as a key component in its performance materials and special chemicals business and shares its strategic vision of becoming fully circular. The takeover is an important step in XRG’s strategy of becoming one of the world’s top five chemical companies. 

The takeover offer is subject to the usual conditions of completion with regard to antitrust and foreign trade clearance and clearance under EU law on foreign subsidies. Completion of the transaction is not expected before the second half of 2025. 

Outlook for 2025: EBITDA between EUR 1.0 billion and EUR 1.6 billion anticipated 

����AV expects economic conditions to remain challenging in 2025, too. Against this backdrop, the Group anticipates EBITDA of between EUR 1.0 billion and EUR 1.6 billion for the current fiscal year. ����AV expects FOCF of between EUR 0 and EUR 300 million and ROCE above WACC of between –6 percentage points and –2 percentage points. The Group anticipates that Scope 1 and Scope 2 greenhouse gas (GHG) emissions, measured in terms of CO₂ equivalents, at ����AV’s environmentally relevant* sites will be between 4.2 million metric tons and 4.8 million metric tons. The Group expects EBITDA for the first quarter of 2025 of between EUR 50 million and EUR 150 million. 
 

Increase in sales at Performance Materials; Solutions & Specialties impacted by declining prices 

Sales in the Performance Materials segment rose to EUR 7.0 billion (previous year: EUR 6.9 billion). While a successful pickup in volumes of 12% drove up sales, a weak market situation with excess supply weighed on selling prices and margins. EBITDA fell by 1.2% to EUR 569 million (previous year: EUR 576 million), while FOCF decreased to EUR 78 million (previous year: EUR 162 million). 

The Solutions & Specialties segment posted a 3.6% fall in sales to EUR 7.0 billion (previous year: EUR 7.3 billion) due to lower average selling prices coupled with lower raw material prices. EBITDA fell by 9.4% to EUR 740 million (previous year: EUR 817 million). In addition to a drop in margins, the reason for this was that, unlike in the previous year, there was no non-recurring positive effect resulting from the sale of the additive manufacturing business in 2023. In addition, expenses due to implementation of the STRONG transformation program reduced earnings. The segment’s FOCF decreased by 24.3% to EUR 417 million (previous year: EUR 551 million). 

Fourth quarter of 2024 with positive EBITDA and cash flow

����AV’s sales rose in the fourth quarter of 2024 by 0.9% year over year to around EUR 3.4 billion (previous year: EUR 3.3 billion). EBITDA increased by 44.7% compared to the prior-year quarter to EUR 191 million (previous year: EUR 132 million). FOCF amounted to EUR 253 million and was therefore 246.6% higher than in the prior-year period (previous year: EUR 73 million). 

“We are honored to be recognized as a Top Employer in China for seven years in a row. This achievement underscores our employee-focused approach and ongoing efforts to create an inclusive, supportive and empowering workplace,” said Holly Lei, President of ����AV China.

In 2024, ����AV China introduced several initiatives to foster leadership and employee growth. The “Manager Enabling” program engaged people managers through case studies, role-playing and interactive games, equipping them with tools to apply ����AV’s cultural behaviors, identify moments that matter in the employee lifecycle, and enhance employee conversations. Meanwhile, the “Leadership Foundation Program for Shift Leaders” has supported over 80 frontline leaders at ����AV Integrated Site Shanghai in strengthening their leadership skills and advance their careers. Both programs received widespread acclaim, reinforcing ����AV’s emphasis on leadership development at all levels.

The company has also built a comprehensive well-being system that addresses physical, mental, social and environmental dimensions. The first-ever Well-being Week held in October 2024 featured activities such as healthy food competition, well-being talent showcases and health lectures at sites and offices across the nation. On top of that were family outings, sports events and beach clean-ups held nationwide, fostering a sense of belonging and boosting employee morale.

“At ����AV, we view our employees as whole individuals, not just as a workforce, valuing their personal growth and well-being alongside their professional contributions. Our goal is to empower them to create value for the company while growing personally,” said Lesley Lin, Head of Human Resources, Greater China.

The Top Employers Institute program certifies organizations based on the participation and results of their HR Best Practices Survey, which covers six HR domains consisting of 20 topics, including people strategy, work environment, talent acquisition, learning, diversity, equity and inclusion, and well-being.

About WNC: 

Wistron NeWeb Corporation (WNC) is a leading network communications solutions provider headquartered in Hsinchu, Taiwan, with annual revenue of US$3.6 billion. WNC has an R&D base in Taiwan, manufacturing facilities, and sales offices in Taiwan, Vietnam, Mainland China, the U.S., U.K., Germany, Japan and Mexico, and a workforce of over 12,000 employees worldwide. WNC provides whole-range communications solutions covering 5G edge infrastructure, Wi-Fi 6/7, satellite broadband, automotive infotainment, automotive telematics, ADAS and high speed switches, SD-WAN solutions and 5G open RAN devices. Leveraging its expertise in antenna/RF design and system integration, WNC is a key supplier to networking brands, tier-1 telecom operators, automakers, and automotive electronics companies. For more information, please visit:  
 

����AV is one of eight companies, including partners from the fields of AI, information technology for low-altitude aviation and carbon fiber composite materials, to sign a Memorandum of Understanding (MOU) with GOVY, a newly established subsidiary of GAC dedicated to the development of eVTOL aircraft. As a key partner in this ambitious project, ����AV brings its unique expertise in high-performance materials and sustainable solutions for the advancement of next-generation flying cars.

“Our collaboration with GAC represents a significant step forward in transforming urban air mobility. By leveraging ����AV’s expertise in sustainable and innovative materials, and GAC’s visionary leadership in flying car development, we are poised to create solutions that redefine the possibilities of urban transport,” said Lily Wang, President of the Engineering Plastics Business Entity at ����AV.

“We are committed to pushing the boundaries of innovation and bringing the future of mobility closer to reality,” said Su Qingpeng, General Manager of GOVY. “Partnering with ����AV and other industry leaders allows us to accelerate the development of our flying cars, creating safe, more sustainable, and groundbreaking transportation solutions for urban environments.”

China is making significant strides in the development of eVTOL aircraft, leveraging its advancements in battery technology to integrate these innovations into urban transportation systems. This strategic focus is driven by the potential of eVTOL vehicles to alleviate urban congestion, reduce pollution, and enhance connectivity, aligning with consumer desires for efficient transportation and the government’s goals for technological innovation and sustainable urban development. These vehicles are designed for short-distance urban travel, with current models offering ranges suitable for inter-city commutes.

Under the agreement, ����AV and GOVY will collaborate on several priority areas. Key initiatives will include developing innovative polycarbonate glazing solutions to reduce vehicle weight while maintaining high performance and safety standards, and exploring materials for smart and efficient lighting systems tailored to the unique requirements of eVTOL aircraft. The collaboration will also address high-performance materials that enable seamless integration of smart systems and components. A strong emphasis will be placed on low-carbon solutions, utilizing materials with attributed bio-circular content and recycled feedstocks to reduce emissions across the vehicles’ lifecycle.

At the signing ceremony, a demo flying car was unveiled, featuring an impressive range of 200 kilometers in just 40 minutes. This prototype showcases a hybrid design that integrates both fixed-wing and rotary-wing capabilities, combining the efficiency of conventional airplane-like forward flight with the vertical takeoff and landing versatility of helicopters. Pre-order of such models will begin in 2025, heralding a new era in personal and urban transportation.

“We are very pleased that so many of our shareholders have followed our recommendation and accepted the offer. This is very good news for ����AV, our employees and all other stakeholders. The strategic partnership with ADNOC is exactly the right step for ����AV at the right time,” says Dr. Markus Steilemann, CEO of ����AV. "With ADNOC respectively XRG as strong and long-term-oriented partner, we will be able to execute on our ‘Sustainable Future’ strategy even more consistently. As part of the XRG Group and following the closing of the transaction, we will be in a position to further accelerate our ongoing transformation.”&�Բ�����;

XRG sees ����AV as the foundational platform of its Performance Materials and Specialty Chemicals business and is convinced of ����AV's strategic perspective and its vision to become fully circular. The takeover of ����AV marks a significant milestone in XRG’s strategy to become a top five global chemicals player. 

The offer will be subject to customary closing conditions in relation to merger control, foreign investment control, EU foreign subsidies clearances. Closing is not expected before the second half of 2025.

As the Chief Commercial Officer, Buch will be responsible for the segment of Solutions & Specialties. With this, she will be leading six business entities including the supply chain centers in the three major regions.

Dr. Richard Pott, Chairman of the Supervisory Board of ����AV said: “Monique Buch is an experienced B2B commercial executive with a strong international footprint. With her background in building sustainable, market-leading businesses she will be an ideal successor to Sucheta Govil in the Board of Management and will continue to shape the future of ����AV. Already now, we want to express our deep gratitude to Sucheta Govil who has laid the solid foundation for a successful development in commercial excellence and innovation. With her strong background in commercial operations, sales, marketing, and innovation, she has been and will be steering the transformation journey of ����AV.”

“I am very much looking forward to join the transformation journey by driving profitable growth, along with the whole ����AV team and my new colleagues on the Managing Board,” said Monique Buch.

Dedicated to sustainable growth

Monique Buch was born in the Netherlands and studied industrial engineering and management. In her last position, Buch was Executive Vice President Nonwoven at Lenzing AG. Before, she held various executive positions in international B2B companies, among them Freudenberg Performance Materials and Owens Corning.

Desmophen^® CQ NH polyaspartics contain at least 25 percent bio-based content, contributing to a lower carbon footprint, and maintain the high performance of their fossil-based predecessors. These resins offer excellent chemical and weather resistance, ensuring long-lasting stability and protection across diverse environments. With rapid curing properties, they enhance construction efficiency for a quicker return to operations. Additionally, they are formulated to minimize VOC and odor emissions, supporting a reduced environmental impact. Key applications include wind turbine coatings, flooring coatings and grouts.

Notably, the Foshan site is entirely powered by renewable energy sourced from offshore wind farms in southern China, further reducing the cradle-to-gate carbon footprint of Desmophen^® CQ NH.

“����AV is dedicated to promoting a circular economy, which includes expanding the use of alternative raw materials and transitioning to renewable energy in production,” said Anand Khot, Senior Vice President of Coatings and Adhesives for Asia Pacific at ����AV. “Our local production of partially bio-based Desmophen^® CQ NH demonstrates our commitment to building a stable and efficient supply network in Asia Pacific that quickly adapts to market needs, supporting our customers’ and end-users’ requirements for increased circularity.”  

Desmophen^® CQ NH is part of ����AV’s Pasquick^® fast-curing coating technology and can also be paired with other partially bio-based products, such as Desmodur^® CQ aliphatic polyisocyanates, within the Pasquick^® technology portfolio.

Currently, ����AV locally produces about 75 percent of its products sold in the coatings and adhesives industry across Asia Pacific, reinforcing the company’s commitment to strengthening manufacturing in the region.

Key aspects of the offer document 

����AV and ADNOC International have agreed on a long-term strategic partnership. The basis for this partnership is the Investment Agreement signed on October 1, 2024, which runs until the end of 2028. In the Investment Agreement, both companies have agreed on the main cornerstones of the partnership. In particular, the agreement contains several commitments on the part of ADNOC International to maintain ����AV's existing business activities, corporate governance and organizational business structure. 

The Investment Agreement expresses ADNOC International's utmost trust and confidence in ����AV's management team. On this basis, ����AV's Board of Management in its current composition will continue to be responsible for the operational management and strategic direction of the ����AV. 

Additionally, ADNOC International has assured ����AV in the offer document of its full support for the further execution of its “Sustainable Future” strategy. To this end, ADNOC International shall subscribe to new ����AV shares issued in connection with an increase of the ����AV’s share capital by 10 percent under simplified exclusion of subscription rights upon the completion of the transaction at the offer price, resulting in an amount of €1.17 billion proceeds at an offer price of €62.00. This will enable ����AV to consistently foster the further implementation of its growth strategy. 

In the Investment Agreement, ADNOC International also commits to recognizing the German governance regulations and to retaining the co-determined Supervisory Board. An important component is also the commitment that two members of the Supervisory Board on the shareholder representatives' side will remain independent of ADNOC Group after the takeover offer has been completed. The Investment Agreement also contains ADNOC International's explicit recognition of the existing general works agreements, collective bargaining agreements and the rights of the works councils in Germany. The same applies to speaker committee agreements and the rights of speaker committees. 

As part of the transaction, there are no plans to sell, close or significantly reduce ����AV's business activities and ADNOC International has undertaken in the Investment Agreement not to initiate any such actions. The Investment Agreement also contains a commitment to protect ����AV's technology and intellectual property. 

Furthermore, ADNOC International has also undertaken in the Investment Agreement that ����AV will continue to be managed as a stock corporation and that no domination and/or profit and loss transfer agreement will be concluded with ����AV. 

Evaluation of adequacy of the offer price 

The Board of Management and the Supervisory Board of ����AV, together with their respective advisors, have also thoroughly reviewed ADNOC International’s offer with regard to the adequacy of the offer price of €62.00 per share. 

The offer price offered by ADNOC International implies an equity value for ����AV of approximately €11.7 billion and represents a premium of approximately 54 percent to the unaffected closing price on June 19, 2023 (the day prior to any media coverage of a potential transaction), as well as a premium of 61 percent on the unaffected, volume-weighted three-month average share price on Jun 19, 2023. 

In their assessment, the Board of Management and Supervisory Board, as further explained in the joint reasoned statement, have considered the results of a range of valuation approaches. 

In addition, the Board of Management and the Supervisory Board have given consideration to the results of the fairness opinions of the respective investment banks engaged by them. In these opinions, the respective banks have confirmed their assessment that the offer price is fair from a financial perspective. 

The offer made by ADNOC International therefore provides shareholders with an attractive opportunity to realize significant value already upon completion of the transaction. 

Against this background, the Board of Management and the Supervisory Board of ����AV consider the offer price to be adequate and jointly recommend to ����AV’s shareholders to accept the offer. 

Acceptance period runs until November 27, 2024 

Following the approval by BaFin (Bundesanstalt für Finanzdienstleistungsaufsicht), ADNOC International published the offer document on the website on October 25, 2024. The offer period will run from October 25, 2024, until 24:00 hrs (Frankfurt am Main local time) or 18:00 hrs (New York local time) on November 27, 2024. The potential additional offer period of two weeks is expected to commence on December 3, 2024, and will run until 24:00 hrs (Frankfurt am Main local time) or 18:00 hrs (New York local time) on December 16, 2024. 

The offer will be subject to a minimum acceptance level of 50 percent plus one share and customary closing conditions, including merger control, foreign investment control, EU foreign subsidies clearances. Currently, closing is not expected before the second half of 2025.

Guidance for 2024 further narrowed within given ranges

In light of the continued challenging economic environment, ����AV has narrowed its guidance for the 2024 fiscal year regarding expectations for EBITDA and ROCE above WACC. 

The Group now anticipates EBITDA between EUR 1.0 billion and EUR 1.25 billion (previously: between EUR 1.0 billion and EUR 1.4 billion). For ROCE above WACC, ����AV now expects a range between –7.0 and –5.0 percentage points (previously: between –7.0 and –4.0 percentage points) for the financial year 2024. Regarding GHG emissions (measured as CO₂ equivalents), ����AV continues to expect a figure between 4.4 and 5.0 million metric tons. ����AV also continues to expect a Free Operating Cash Flow between EUR –100 and EUR 100 million. 

“Overall, global demand is intact but remains at a low level. We continue to face challenges in various industries and regions,” says Christian Baier, CFO of ����AV. “Nonetheless, we were able to slightly increase our EBITDA, indicating that our measures for efficiency and plant reliability are working. However, the economic environment remains challenging, and we have therefore narrowed our guidance for the full year accordingly.”&�Բ�����;

Investment Agreement with ADNOC supports execution of “Sustainable Future” strategy 

As announced in an ad-hoc release on October 1, 2024, ����AV has on that day signed an Investment Agreement with entities of the ADNOC Group, including ADNOC International Limited (“ADNOC International”) and its indirect subsidiary ADNOC International Germany Holding AG (“Bidder”). The agreement stipulates, among other items, that the Bidder will make a public takeover offer for all outstanding shares of ����AV at a price of €62.00 per share. In addition, ADNOC International is committing itself to fully supporting the ����AV's "Sustainable Future" strategy and intends to fully support ����AV in further executing on this strategy. To this end, the Bidder shall subscribe to new ����AV shares at the offer price via an increase of the ����AV’s share capital by 10% under simplified exclusion of subscription upon the completion of the transaction. This will result in an amount of €1.17 billion proceeds at an offer price of €62.00 which ����AV will use to foster the further implementation of its growth strategy. 

On October 25, 2024, the Bidder, following approval by BaFin, has published the corresponding offer document in relation to all outstanding ����AV shares at an offer price EUR 62.00 per ����AV share. The Board of Management and the Supervisory Board of ����AV will now carefully review the offer document and issue a reasoned statement pursuant to Section 27 WpÜG in due course. Subject to the review of the offer document, the Board of Management and the Supervisory Board assume that they will recommend the acceptance of the offer to the ����AV’s shareholders.

Further milestones on the road to climate neutrality achieved 

In the third quarter of 2024, ����AV further increased the share of renewable energies in its energy mix, thereby achieving another important milestone on the road to operational climate neutrality by 2035. In July 2024, ����AV signed a long-term power purchase agreement (PPA) with bp to supply its sites in Spain with solar energy. The contract has a term of ten years and increases the share of renewable energy from less than ten percent to around 30 percent. As a result, a significant share of the electricity consumption of ����AV's main production site in Tarragona, Spain, is now also covered by renewable sources. 

EBITDA in the Performance Materials segment significantly increased

 In the Performance Materials segment, ����AV increased its sales by 4.1 percent to EUR 1.78 billion (previous year: EUR 1.71 billion) in the third quarter of 2024. This was primarily driven by higher volumes, especially in the EMLA region. These higher volumes contributed to a significant increase in EBITDA of 47.1 percent to EUR 125 million (previous year: EUR 85 million). Free Operating Cash Flow amounted to EUR 111 million (previous year: EUR 317 million) due to a significantly lower release of funds from working capital compared to the same quarter of the previous year. 

In the Solutions & Specialties segment, sales in the third quarter of 2024 decreased by 2.0 percent to EUR 1.77 billion (previous year: EUR 1.81 billion). This was primarily due to a demand-related decline in average selling prices, which higher volumes were unable to offset fully. As a result, the segment's EBITDA fell 15.4 percent to EUR 208 million (previous year: EUR 246 million). Free Operating Cash Flow was EUR 101 million (previous year: EUR 185 million), primarily due to cash being tied up in working capital, as opposed to a release of funds in the same quarter last year, and lower EBITDA. 

Challenging environment weighs on results in the first nine months of 2024 

In the first nine months of 2024, ����AV's sales remained largely stable at EUR 10.8 billion compared to the same period of the previous year (previous year: EUR 11.0 billion). The increase in volumes across the Group did not offset the demand-related decline in average selling prices in the first nine months. That is also reflected in the EBITDA for the first nine months of 2024, which fell by 7.2 percent to EUR 880 million (previous year: EUR 948 million). Net income fell to –€74 million (previous year: –€11 million). Free Operating Cash Flow for the nine-month period amounted to –€164 million (previous year: €159 million). 

Key transaction details 

The Bidder intends to make a cash offer to ����AV shareholders of €62.00 per share. This price implies an equity value for ����AV of approximately €11.7 billion and represents a premium of approximately 54 percent to the unaffected closing price on June 19, 2023, the day prior to any media coverage of a potential transaction, and a premium of 21 percent to the closing price on June 23, 2024, the last share price prior to ����AV announcing the beginning of the confirmatory due diligence and the start of concrete negotiations. 

The offer will be subject to a minimum acceptance level of 50 percent plus one share and customary closing conditions, including merger control, foreign investment control, EU foreign subsidies clearances. 

In compliance with the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz, WpÜG), the offer document, which is expected to be available within six weeks, and other information pertaining to the Bidder’s public takeover offer will be made available on the following website after approval by BaFin (Bundesanstalt für Finanzdienstleistungsaufsicht): . 

After thorough consideration, the Supervisory Board and the Board of Management of ����AV welcome and support the Bidder’s announced takeover offer. Both boards will carefully review the offer document after its publication and will issue their reasoned statements pursuant to Section 27 WpÜG shortly after. Subject to the review of the offer document, the Board of Management and the Supervisory Board assume that they will recommend the acceptance of the offer to the ����AV’s shareholders. 
 

Partnership enables expansion of ����AV's excellent position in attractive growth markets 

����AV has a clear growth strategy and is already making significant progress in its strategic transformation that will further expand its excellent position in attractive growth markets. ADNOC International sees ����AV as the foundational platform of its Performance Materials and Specialty Chemicals business and is convinced of ����AV's strategic perspective and its vision to become fully circular. 

In the joint Investment Agreement, which runs until the end of 2028, ����AV and certain entities of the ADNOC Group, including ADNOC International, have agreed on the main cornerstones of the partnership. In particular, the agreement contains several obligations on the part of ADNOC International to maintain ����AV's existing business activities, corporate governance and organizational business structure. 

ADNOC International has assured ����AV of its full support for ����AV's “Sustainable Future” strategy and intends to fully support ����AV in further executing on this strategy. To this end, the Bidder shall subscribe to new ����AV shares at the offer price via an increase of the ����AV’s share capital by 10% under simplified exclusion of subscription upon the completion of the transaction, this will result in an amount of €1.17 billion proceeds at an offer price of €62.00 which ����AV will use to foster the further implementation of its growth strategy. 

In the agreement, ADNOC International commits, among other items, to recognizing the German governance regulations and to retaining the co-determined Supervisory Board. An important component is also the commitment that two members of the Supervisory Board on the shareholder representatives' side will remain independent of ADNOC Group after the takeover offer has been completed. 

The Investment Agreement also contains ADNOC International's explicit recognition of the existing general works agreements, collective bargaining agreements and the rights of the works councils in Germany. In addition, there are no plans to sell, close or significantly reduce ����AV's business activities as part of the transaction and ADNOC International undertakes in the Investment Agreement not to initiate any of the above. The Investment Agreement also contains a commitment to protect ����AV's technology and intellectual property. 

Furthermore, ADNOC International undertakes in the Investment Agreement that ����AV will continue to be managed as a stock corporation and that no domination and/or profit and loss transfer agreement will be concluded with ����AV. 

The Investment Agreement and ADNOC International's commitments therein express ADNOC International's utmost trust and confidence in ����AV's management team. ����AV's Board of Management in its current composition will, therefore, continue to be responsible for the operational management and strategic direction of the ����AV. 

����AV’s Board of Management has agreed, subject to its fiduciary duties, to support a delisting offer and/or squeeze-out if ADNOC International intends to execute either. However, the Investment Agreement stipulates that even after a potential delisting and/or a squeeze-out, ����AV will continue to be managed as a stock corporation under German law with the same governance as before, a co-determined Supervisory Board with two Supervisory Board members who are independent of ADNOC International and its registered headquarters in Leverkusen. 

In connection with the conclusion of the Investment Agreement, the Board of Management, with the support of the Supervisory Board, has also decided to not propose a dividend payment until the transaction has been completed or until the expiration of the period for regulatory approvals or a termination of the Investment Agreement. 

Goldman Sachs and Perella Weinberg are acting as financial advisors to ����AV’s Board of Management on the transaction, with Linklaters acting as legal advisor. For ����AV’s Supervisory Board, Rothschild & Co and Macquarie Capital are acting as financial advisors, and SZA Schilling, Zutt & Anschütz as legal advisors. 

Construction is set to begin in late 2024, with the facility expected to become operational in 2025. The center will be outfitted with advanced equipment to address complex market demands and leverage local resources and networks to streamline talent and administrative management.

“Establishing this new application development center in Guangzhou is a strategically important move for us to jointly with our customers leverage on the vibrant Asia-Pacific and especially the Chinese market. The center will also contribute to developing more sustainable TPU solutions, underscoring our dedication to innovation that benefits our esteemed customers and partners,” said Dr. Andrea Maier-Richter, EVP and Global Head of TPU at ����AV. “Together with the ongoing investment in our largest global TPU production site in Zhuhai, we will soon run two powerful engines in two major cities. This highlights our company’s ongoing commitment to growth and its commitment to the innovative capabilities of TPU in particular.”

With the existing regional R&D center in Changhua, the ongoing construction of the largest global TPU production site in Zhuhai and the upcoming APAC application development center in Guangzhou, the collaborative and complementary strengths from the three sites are expected to drive even more powerful regional synergies.

“The new application development center in Guangzhou will play an instrumental role in engaging with major TPU industry clusters across China and APAC, particularly in consumer electronics and specialty extrusion applications,” said Kevin Ho, Head of Sales & Market Development for TPU in APAC at ����AV. “We are not only close to these industry clusters, we are also at the forefront of listening to our customers, partners and the industry value chain. By bolstering our AD capacities, we ever better can sense and meet the nuances and changes and navigate our solutions and services with velocity, agility and customer centricity.“

����AV is committed to offering sustainable and circular solutions that align with its long-term goals. The Desmopan^® CQ TPU portfolio is a great example, utilizing alternative raw materials such as feedstocks from waste or biomass, attributed via mass balancing. The company as a whole furthermore aims to become fully circular and aims at becoming operationally climate neutrality by 2035, striving to utilize only renewable energy for its operations by then. This lowers the carbon footprint of products like TPU even further. This dedication of the company is also reflected in the investments in its new TPU properties, where such developments shall be driven further.

Beyond Leather’s approach captures the value of apple waste – of which around 4 million tons is produced every year – by upcycling it into a high-performance and more sustainable alternative to conventional leather made with animal skin. With a high content of short fibers and polymers, apple waste (including cores, seeds, and stems) can be activated to give a strength and suppleness to the final material, recreating the functional and aesthetic properties that make leather so desirable. To produce LEAP^®, the apple-waste blend is applied to a TENCEL^TM textile backing and finished with the protective coating containing INSQIN^® PU.

Inspirational leather-look products; aspirational performance

For brand customers and end consumers looking for leather alternatives, the launch of LEAP^® stands as a testament to the power of innovation and collaboration.

“With around 25% of an apple discarded after pressing, we wanted to capture this waste’s value in premium applications. We believe that looking into waste streams and using upcycling is crucial to reduce emissions. It is our mission to show how much value there is in waste and, ultimately, make waste beautiful,” says Mikael Eydt, Co-Founder & CEO, Beyond Leather Materials.

“����AV is delighted to have contributed to the development of this leather alternative made with apple waste, which has significant potential to improve textile sustainability in a wide range of industries,” says Dr. Torsten Pohl, Head of Global Textile Coatings ����AV. “Our low-VOC, low-emission, waterborne, and partly-bio-based INSQIN^® coating technology is the perfect fit for LEAP^®, enabling the premium durability, flexibility and perceptual quality needed in today’s market while offering a more sustainable solution for partners like Beyond Leather. We look forward to continuing our collaboration in applications spanning everything from small goods typically made of leather such as wallets, purses, and key cases, to automotive interiors.”

“We are excited to partner with Li Auto and support their pursuit of intelligence and electrification in automobiles,” said Guido Naberfeld, Senior Vice President, Head of Sales and Market Development Mobility at ����AV, during the MOU signing event at ����AV’s integrated production site in Shanghai. “By leveraging our expertise in engineering plastics and circular solutions, we aim to enable innovative future-oriented mobility solutions and reshape automotive material cycles, driving the industry towards a smarter and more circular economy.”

Under the MOU, ����AV and Li Auto will establish a “Joint Innovation Platform” to drive the development and application of more sustainable engineering plastics with alternative feedstocks, such as bio-waste and recycled sources, across various automotive components. Key initiatives will involve integrating materials attributed with bio-circular content through mass balancing into automotive lighting, functional interior and exterior parts, and smart system components. The two sides also agreed to explore innovative processes and business models for using recycled lighting materials in new automotive parts together with value chain partners.

Under the joint platform, the two sides also seek to deepen their collaboration in developing lighting, smart systems, and thermal management solutions. This will include high-performance optical-grade materials, smart surface technologies and thermally conductive solutions.

“Li Auto is dedicated to implementing the ‘Smart + Electric’ strategy with innovative materials and designs, aiming to offer users a safer, more comfortable, convenient and refined travel experience,” said Liao Mengjun, Vice President of R&D Operations at Li Auto. “Our partnership with ����AV will expedite our exploration in advanced materials, supporting the ongoing enhancement of user product demands.”

During the event, the two parties also unveiled two jointly-developed, industry-leading materials: innovative light-diffusing and infrared-transparent Makrolon® polycarbonates. The light-diffusing polycarbonate allows for a more refined and evenly-distributed illumination effect for smart headlights. Meanwhile, the new infrared-transparent polycarbonate achieves a high transmittance of over 85 percent in the near-infrared spectrum. Compared to conventional black polycarbonate, which absorbs solar energy across the entire spectrum, this new material significantly enhances the light aging resistance of components, contributing to greater durability for the smart headlights of Li Auto.

In line with trends toward lightweight and customized designs in the athletic shoe market, ����AV has launched the Dispercoll^® U high-performance waterborne polyurethane adhesive solution. It is specifically engineered for bonding-challenging special shoe materials and can enhance manufacturing efficiency while supporting energy savings and carbon reduction. With exceptional initial tack performance, the solution can bond lightweight, temperature-sensitive substrates and accommodate innovative shoe designs, resulting in smoother handling and increased productivity. Additionally, its activation temperature can be reduced from 55°C to 35°C, leading to lower energy consumption and reduced carbon emissions during the thermal activation process.

Furthermore, ����AV has developed the Dispercoll^® U PLUS waterborne footwear adhesive solution in response to the footwear industry’s growing interest in one-component solutions that simplify the bonding process. This solution streamlines shoe manufacturing, conserves equipment and labor, reduces material waste, and is also suitable for automated bonding processes. With proven hydrolysis resistance and bonding strength, this solution effectively reduces the risk of debonding in high-performance athletic shoes, thereby extending their lifespan.

Addressing the design trends in the automotive interior segment, ����AV has launched the Dispercoll^® U bonding solution for automotive interior lamination, featuring enhanced heat resistance. By balancing good initial bonding strength with exceptional initial heat resistance, the solution effectively meets the stringent requirements for bonding complex, three-dimensional trim parts under high tensile strength, making the lamination process more efficient. This makes it particularly suitable for applications in 3D-shaped interior trim parts, such as armrests with novel designs and large curved seat back covers. Compared with the majority of marketed solutions, Dispercoll^® U demonstrates superior performance in both green and final heat resistance, better meeting production and application needs by reducing risks such as rebound and bulging.

����AV has also introduced an upgraded version of Dispercoll^® U PLUS waterborne polyurethane adhesive solution for automotive interiors. It significantly improves heat and climate resistance, addressing the challenges of aging in automotive interiors due to extreme heat and ensuring long-term stability in adhesive bonding performance. It also offers improved storage stability.

Enhancing localization to serve the coatings and adhesives industry

These innovative adhesive solutions were developed at ����AV’s Asia-Pacific Innovation Center in Shanghai. Furthermore, to better serve regional customers, the company now locally produces about 75 percent of its products sold in the coatings and adhesives industry across Asia Pacific.

“Over time, ����AV has expanded our localized R&D and production capacity in Asia Pacific, building an efficient regional innovation and supply network with consistent high quality. This has effectively supported our coatings and adhesives customers in operating and expanding in their respective markets,” said Li Jinqi, Vice President of Coatings and Adhesives Greater China at ����AV. “We’re also pushing forward with our digitalization strategy throughout product development to significantly improve the efficiency of product innovation.”

For example, at the Asia-Pacific Innovation Center, ����AV has developed new digital testing equipment and solutions for assessing initial bonding strength in footwear, replacing traditional subjective manual methods. This digital tool ensures objective, scientific and accurate test results through micromechanical analysis of the adhesion process, helping to shorten the product development cycle and meet customers’ needs for rapid development and launch of high-quality products.

Baypreg® STM employs the Spray-Transfer-Molding process, where PU resins are sprayed onto glass fibers and molded into battery covers, enabling efficient production of composite components. Developed in collaboration with , a Tier 1 supplier of automotive parts and battery packs to Chinese and international OEMs, this solution represents a significant advancement that is also cost-effective.

Solution for lighter and high-performance battery covers

This PU solution reduces battery cover weight by more than half compared to traditional steel shell materials. As a non-metallic material, the Baypreg® battery cover inherently offers superior anti-corrosion and insulation properties, effectively preventing electric arcing. When compared with non-metallic options, it outperforms in terms of surface smoothness and airtightness. It also demonstrates high strength meeting tough requirements from OEMs.

“As the inventor of polyurethanes, ����AV brings decades of expertise in the automotive industry, with PU solutions enhancing both driving and riding experiences in automotive interiors and exteriors. We can now extend this expertise to NEVs as well,” said Akhil Singhania, Global Head of PU Specialties at Tailored Urethanes, ����AV. “The Baypreg® STM solution showcases ����AV’s ability to deeply understand evolving market needs and rapidly innovate cutting-edge material solutions. Our goal is to deliver lighter, more efficient, and sustainable solutions through continuous technological innovation.”

The NEV industry has witnessed rapid growth in recent years. According to the China Passenger Car Association, NEV sales accounted for 51 percent of total passenger car deliveries in China in July 2024, outnumbering those of internal combustion engine vehicles for the first time.

Diverse applications for ����AV’s PU composites

At the CCE, ����AV will also showcase its PU composite solutions across various sectors. For instance, PU composites are widely utilized in photovoltaic (PV) modules to enhance efficiency and quality. Specifically, PU frames combined with coatings solutions from ����AV offer superior corrosion and weather resistance for PV modules, PU profiles excel in insulation and mechanical performance in energy storage batteries, and transparent front sheets based on composites enable high light transmittance while demonstrating exceptional strength for solar panels. 

Additionally, in construction, PU windows and doors are ideal for nearly zero-energy buildings due to their excellent insulation. In infrastructure projects, PU composites are widely used in power poles, railway sleepers and cable trays for their durability, weather resistance and low maintenance costs.

To learn more about ����AV's PU composite applications at the China Composites Expo, visit the company’s booth 7R19 in Hall 7.1 at the National Exhibition and Convention Center (Shanghai) from September 2 to 4, 2024.

“The market environment remains very challenging,” says Dr. Markus Steilemann, CEO of ����AV. “Our sharp rise in volumes sold shows that we’re prepared for the market recovery. In addition, our transformation program STRONG is creating the necessary conditions for us to further expand our leading position in the global market and secure our competitiveness.”&�Բ�����;

In view of a rapidly changing market environment, ����AV launched the global transformation program STRONG in June 2024. The Group is therefore making itself even more effective and efficient and is systematically driving its digitalization. As part of STRONG, ����AV is planning to realize global annual savings in material and personnel costs of EUR 400 million by 2028, of which EUR 190 million will be in Germany. 

Full-year 2024: Earnings guidance narrowed 

����AV continues to expect challenging economic conditions in the remainder of the year. ����AV has therefore narrowed its guidance for EBITDA and ROCE above WACC and adjusted its forecast for the free operating cash flow for fiscal 2024. The company now anticipates EBITDA between EUR 1 billion and EUR 1.4 billion (previously: between EUR 1 billion and EUR 1.6 billion). ����AV now expects a free operating cash flow of between EUR –100 million and EUR 100 million (previously: between EUR 0 million and EUR 300 million). For ROCE above WACC, ����AV now anticipates a range between –7.0 percentage points and –4.0 percentage points (previously: between –7.0 percentage points and –2.0 percentage points). ����AV projects that GHG emissions measured as CO₂ equivalents will still be between 4.4 million metric tons and 5.0 million metric tons. The Group anticipates EBITDA for the third quarter of 2024 will be EUR 250 million to EUR 350 million. 

“We were able to keep our sales stable in the second quarter and reached the middle of our EBITDA guidance. That’s positive news and proof of our resilience,” says Christian Baier, CFO of ����AV. “In view of the continuing challenging economic environment, we have narrowed our earnings guidance for the year as a whole accordingly." 

Confirmatory due diligence with ADNOC has started 

Based on the open-ended talks held up to then with the Abu Dhabi National Oil ����AV (ADNOC), the Board of Management of ����AV resolved in June 2024 to enter into concrete negotiations about a possible transaction and the possible conclusion of an investment agreement and to enable an adequate exchange of corporate information to confirm assumptions (confirmatory due diligence). The starting point for the negotiations is a potential offer price of EUR 62 per ����AV share indicated to ����AV by ADNOC, which is subject to, among other things, the results of the confirmatory due diligence as well as agreement on the content of an investment agreement.  

����AV systematically advances its aim to become fully circular 

In May 2024, ����AV announced its authorization as a waste trader at IFAT, the world’s leading trade fair for the waste and disposal industry. The Group has created the legal conditions to become a purchaser and recycler of plastic waste itself, thereby securing independent access to the valuable resource of waste. ����AV has secured further access to recycled materials through a partnership announced in June 2024 with Neste and Borealis to enable the recycling of discarded tires into high-quality plastics for automotive applications. 

With the aim of continuously enhancing chemical recycling, ����AV also invested a mid single-digit million euro amount in the Dutch company BioBTX in June 2024. With this partnership, ����AV is enabling construction of the world’s first demonstration plant for an innovative technology that makes it possible to produce valuable chemicals such as benzene, toluene and xylene from organic and mixed plastic waste and then use them in plastics production. 

Increase in volumes sold in both segments 

In the Performance Materials segment, ����AV significantly increased volumes sold despite the difficult market situation in the second quarter of 2024, in particular in the EMLA and APAC regions. Sales thus have increased year on year by 2.5 percent to EUR 1.83 billion (previous year: EUR 1.79 billion). At the same time, lower raw material prices only partially offset the demand-related decline in selling prices, with the result that EBITDA fell by 35.1 percent year on year to EUR 196 million (previous year: EUR 302 million). The free operating cash flow was EUR –89 million (previous year: EUR –77 million). 

����AV has also increased volumes sold in the Solutions & Specialties segment in the second quarter of 2024, especially in the APAC region. Again, this increase only partially offset the lower selling prices, meaning that sales declined by 3.3 percent year on year to EUR 1.81 billion (previous year: EUR 1.88 billion). EBITDA fell by 21.3 percent to EUR 174 million (previous year: EUR 221 million). This decline is attributable in particular to a non-recurring positive effect from the sale of the additive manufacturing business in the second quarter of 2023, which had increased earnings by EUR 35 million. In addition, expenses in connection with implementation of the transformation program STRONG had a negative impact in the low double-digit million euro range in the second quarter of 2024. The free operating cash flow in the past quarter was EUR 36 million (previous year: EUR 150 million), with the fall being the consequence of higher funds tied up in working capital and a decline in EBITDA. 

First half of the year impacted overall by low sales prices 

Group sales in the first half of the current fiscal year 2024 declined by 3.5 percent to EUR 7.2 billion (previous year: EUR 7.5 billion). The Group’s EBITDA fell by 11.6 percent to EUR 593 million in the first half of the year compared to the first six months of 2023 (previous year: EUR 671 million). The free operating cash flow in the first half of the year was at EUR –276 million (previous year: EUR –149 million), while net loss fell to EUR 107 million (previous year: net income of EUR 20 million). 

“At UTECH Asia / PU China, ����AV is unveiling our robust portfolio in cast polyurethane, focusing on applications for rapidly growing industries in Asia Pacific, such as renewable energy, material handling and electric vehicles,” said Thomas Braig, Head of the Business Entity Elastomers at ����AV. “We are committed to delivering crafted solutions with superior quality, performance and sustainability, creating value for our customers and fostering their growth.”

Diverse applications for growing industries

Exhibit highlights include elastomer systems used in subsea cable protection parts, such as bend restrictors, bend stiffeners and cable protection sleeves for offshore wind farms. Characterized by their high resistance to impact, hydrolysis and wear, these materials extend the shelf life of cables and reduce maintenance costs. As offshore wind turbines are increasingly deployed in deep waters far from shore, ����AV also provides a total solution with enhanced elastomers and the high-output Baulé^® omega machine for their production, driving forward development in this sector.

For material handling applications, elastomer systems based on Vulkollan^® and Desmodur^® raw materials are used to enhance wheels for auto-guided vehicles and forklifts. These systems support digitalization and automation in logistics and manufacturing, enabling safe and efficient around-the-clock production.

Additionally, Vulkollan^® solutions will be showcased for applications in EVs, where electrification introduces challenges such as noise, vibration and harshness (NVH), as well as the need for better damping solutions due to the heavier weight of batteries. Cellular Vulkollan^® is particularly suitable for more demanding damping elements like bumpers, top mounts and bushings in EVs.

Strengthening presence in Asia Pacific
To better support growth, ����AV has been strengthening its presence for the cast polyurethane industry in Asia Pacific. In recent years, it has launched a new production line for Vulkollan® raw materials at the Map Ta Phut site in Thailand and another plant for polyurethane elastomer systems at its Shanghai site in China. Most recently, it has launched the first locally assembled Baulé® alpha machine for cast PU processing at its Asia-Pacific Innovation Center in Shanghai.

“These investments and localization efforts improve our customer proximity, reinforcing our position to supply regional markets and support growth in key industries and new market development,” said Simon Chen, Head of Elastomers Asia Pacific. “We also provide adapted solutions for our customers’ specific technical needs, such as fire resistance and anti-static properties.”

In addition, the company can supply more sustainable elastomer grades, among them those in the CQ portfolio, at its new Shanghai plant by using alternative raw materials via mass balance attribution and renewable energy in production. CQ, which stands for “Circular Intelligence,” is a label used by ����AV to identify products with a physical or attributed content of at least 25 percent alternative raw materials.

For more information on ����AV’s elastomer solutions across diverse industries, visit its booth (No. 150) at UTECH Asia / PU China in the Shanghai World Expo Exhibition & Convention Center from July 17 to 19.

Although less associated with the chemical industry or the circular economy, design plays a key role in enabling circularity through various means. It offers a huge opportunity for providers of sustainable and high-performance materials like ����AV to bring in their expertise.

“The design phase determines a large part of a product’s environmental impact: From the choice of materials to repairability, from a long and useful product life to recyclability. We therefore can’t understate the topic of design when we want to become fully circular,” explains Dr. Christopher Stillings, Head of Color & Design at the Business Entity Engineering Plastics within ����AV. “As materials experts early in the value chain, we at ����AV sit in the sweet spot to consult our customers and partners on how to use circular design principles when conceiving a product. We want to systematically collaborate with designers to make use of that.“

Gaining momentum

And while product design is not new, a shift is indeed happening - also due to regulators placing increasing emphasis on the topic. For example, the EU is tightening its requirements for , and to make products sold in the EU more reusable, repairable, upgradeable and recyclable. There is also a proposal for a DIN “Method to achieve circular design of products” on its way. In the USA, the Department of Energy is pursuing its “”, which also includes the factor of “Recyclability by design”. Other regulatory bodies are discussing similar initiatives.

To use that momentum, ����AV offers solutions in several main areas:

• Dematerialization, e.g. by digitalizing sampling processes. ����AV recently announced its new digital sampling tool for that purpose.
• Design for longevity. This is bread and butter for a high-performance materials manufacturer that provides materials e.g. for products for cars, buildings or the cold chain that have a lifetime of several decades.
• Modular design makes it easier to disassemble products and recycle the parts.
• The use of circular raw materials with a low emission footprint make products made of such material more circular to begin with.

The push for circular design is getting stronger and ����AV is addressing the topic on various fronts. In fact, it has been addressing the topic for decades already and can build on that expertise. The K67, a car entirely made of plastics made for the K-fair back in 1967, is just one example.

Under this partnership, one of ����AV’s key roles is to provide more sustainable plastic solutions along with their carbon footprint data. Alibaba Cloud’s Energy Expert, an AI-driven sustainability platform, plays a crucial role in realizing the whole life cycle emission accounting from recycled materials to final consumer products leveraging digital technology such as blockchain. It also provides an end-to-end solution for industrial companies to measure and optimize their carbon footprint across their production lifecycle.

“As a materials manufacturer with a high focus on sustainable material innovation, ����AV is committed to driving circularity and climate neutrality. Our collaboration with Alibaba Cloud marks a significant milestone in our journey towards a circular and climate-neutral future,” says Lily Wang, Global Head of the Engineering Plastics Business Entity, at ����AV. “With our joint solutions, we are supporting our customers to improve their supply chain transparency while building trust among environmentally conscious consumers, thereby driving industries towards a greener future.”

“We are proud to partner with ����AV in pioneering sustainable solutions that drive positive environmental impact,” says William Xiong, Vice President of Alibaba Cloud Intelligence. “By leveraging our advanced cloud infrastructure and expertise in sustainability technology, we are enabling value chain partners to trace materials with enhanced transparency and efficiency as well as to optimize their carbon footprint to achieve their sustainability target. This partnership exemplifies the transformative power of technology in creating a more sustainable future.”

The joint solutions offered by the two parties have already been implemented in the consumer goods sector. For example, ����AV collaborated with China’s leading beverage maker Nongfu Spring to recycle its 19-litre water barrels into post-consumer recycled polycarbonate. The material was then used by KACO, a niche stationary brand in China, to produce gel pens. Through Alibaba Cloud Energy Expert’s carbon emission accounting and digital tools, consumers can scan a QR code on the packaging of the pens to trace the origin of the material, see a detailed breakdown of the carbon footprint at each stage in the production chain and the number of carbon emission slashed compared to the virgin materials.

Bayhydur^® CQ ultra 701-90 is a partially bio-based waterborne crosslinker used in the new hairdryers. It contains approximately 61 percent bio-based content and achieves a 35 percent reduction in carbon footprint compared to traditional fossil-based counterpart. Additionally, it offers better chemical resistance, improved resin compatibility for easy integration with various resins, and clearer film transparency, which enhances the presentation of customized colors in coatings.

“This collaboration not only showcases ����AV’s strong R&D capabilities but also reflects the proactive efforts of various players in the industrial chain towards commercializing bio-based coatings raw materials,” said Anand Khot, Head of Coatings and Adhesives in the Asia-Pacific region at ����AV. “The Tonney hairdryers mark the first commercial application of ����AV’s bio-based waterborne crosslinker in the electronics and appliances sector, providing a strong impetus for ����AV to expand the reach of bio-based coatings in broader markets.”

Both models also use Makrolon^® 205 R50 for their housings. This polycarbonate resin incorporates 50 percent post-consumer recycled content, contributing to landfill waste reduction. Its carbon footprint is 36 percent lower than that of a comparable fossil-based virgin plastic. Makrolon^® 205 R50 holds the Environmental Claim Validation (ECV) certificate from Underwriters Laboratories. Additionally, this polycarbonate grade offers flexibility in wall thickness design, ensuring product safety and design diversity.

“At Tonney, we are exploring ways to leverage material technology to reduce the carbon footprint of our products, while maintaining product stability and appearance to enhance the consumer experience,” said Zhang Hongbin, Chairman of Shanghai Tonney. “The integrated sustainable material solutions from ����AV are helping us drive Environmental, Social and Governance (ESG) development in the hospitality industry and promote a low-carbon travel lifestyle for consumers.”

In addition to incorporating low-carbon materials, ����AV provided the new hairdryers with customized CMF (Color, Material, Finish) solutions to enhance their coatings effects with sustainable concepts. Both companies plan to collaborate on applying polycarbonate aesthetic solutions to Tonney’s future products. Leveraging its CMF expertise, ����AV integrates aesthetic design into the development of sustainable materials, ensuring a balance between aesthetics and circularity considerations, and enabling designers to explore greater possibilities in product design.

To learn more about ����AV’s CMF and Circular Design solutions at Design Shanghai, visit booth 4C33 at the Shanghai World Expo Exhibition and Convention Center from June 19-22, 2024.

Partially bio-based coatings raw materials for photovoltaic backsheets

Among the highlights is the introduction of a high-performance photovoltaic backsheet coating solution featuring a reduced carbon footprint. The low-carbon backsheet, developed in partnership with China’s , incorporates the Desmodur^® CQ hardener, boasting a 70 percent renewable carbon content¹ derived from non-fossil-based inputs while ensuring no compromise on quality. To provide context, using Desmodur^® CQ in every 1 gigawatt of solar backsheets can result in the reduction of 41 tons of CO₂ emissions, equating to the annual CO₂ absorption of 10,000 trees. The CQ label is used to identify ����AV products with at least 25 percent alternative raw materials content.

Additionally, this innovative solution provides robust adhesion and exceptional weather resistance, guaranteeing a lifespan of over 25 years for backsheets. Its rapid drying properties also enhance production efficiency.

Solar panels with PU composite frames to endure harsh environments

����AV will also showcase Baydur^®, a crucial auxiliary material for solar modules. The polyurethane (PU) composite frame made from Baydur^® resin offers excellent corrosion resistance, making it ideal for high humidity and high salt mist environments in coastal and offshore solar farms. As a non-metallic insulating material, the PU composite frame can reduce potential induced degradation, thereby enhancing the efficiency of photovoltaic modules. It requires no grounding and reduces the cradle-to-gate carbon footprint by 85 percent² compared to aluminum alloys. Baydur^® has obtained commercial material certifications from TÜV Rheinland and TÜV SÜD.

PU composites have demonstrated their durability across multiple industries for over four decades, enduring harsh conditions such as low temperatures, extreme wind loads and hail. Notably, the earliest project in China utilizing composite module frames made from ����AV’s PU resins has operated safely for over eight years.

Polycarbonate expertise addressing key trends in new energy products

As advancements in new energy products such as photovoltaics, energy storage, wind power and electric vehicles accelerate, the market demands stringent standards for safety, durability, weatherability, aesthetics and sustainability. At SNEC, ����AV will showcase its tailored polycarbonate solutions for new energy equipment enclosures, CMF (color, material, finish) design components, EV charging stations and premium storage batteries.

For instance, ����AV’s polycarbonates offer lightweight alternatives to metal for electromagnetic interference (EMI) shielding components, ensuring enduring outdoor electromagnetic shielding reliability when paired with conductive paint for equipment enclosures. Moreover, ����AV’s high-performance outdoor polycarbonate materials deliver outstanding weather resistance, mechanical properties and flame retardancy, making them ideal for resilient and secure battery systems. The Makrolon ^® polycarbonate utilized in battery enclosures and brackets withstands extreme temperatures down to -40°C and resists hydrolysis and UV aging.

SNEC stands as one of the largest exhibitions in the photovoltaic industry globally, encompassing PV manufacturing, materials, application products, modules, energy storage and mobile energy, spanning the entire PV industry chain. To explore ����AV’s material solutions in the PV industry and beyond, visit its booth at F006-007 in Hall 6.1 at the National Exhibition and Convention Center (Shanghai) or go to . 

¹ Value based on theoretical calculation (69 ± 4% renewable carbon, measured using the 14C method according to the ASTM-D6866 standard).

² Internal calculations based on data from TÜV SÜD, which shows cradle-to-gate carbon footprint of each kilogram of 100 percent primary aluminum profile is 24.2 kilograms of CO₂ equivalent emissions.

“Circularity requires cooperation, and this cooperation with our partners Neste and Borealis is testament to the possibilities at our disposal,” says Guido Naberfeld, Senior Vice President, Head of Sales and Market Development Mobility at ����AV. “We are creating options to turn old tires into new car parts again. With that, we are supporting our automotive customers and addressing an increasingly prominent question discussed across the value chain: How to match high-performance materials with recycled content? Projects like this can be the answer.”

As part of the collaboration, Neste turns liquefied discarded tires into a high-quality raw material for polymers and chemicals manufacturing and supplies it to Borealis. Borealis will then process the Neste-produced raw material into base chemicals phenol and acetone, which are supplied to ����AV. ����AV can use these materials to make polycarbonates. The share of recycled content is attributed via the mass balancing approach all the way to the final products using ISCC Plus certification.

The first products based on the collaboration are already available as each party has manufactured the first batch of their respective contribution to the project. Aside from polycarbonates, the project partners may also consider polyurethanes as a possible end product, which could also find its way into parts of the interior of a car. The companies emphasize that the potential to scale-up these types of developments should be considered when setting ambitious targets for future EU regulations, such as the End of Life Vehicles Regulation.

“We are demonstrating the importance of value chain cooperation to give new value to waste,” says Thomas Van De Velde, Senior Vice President Base Chemicals at Borealis. “We are proud that Borealis, in collaboration with Neste, is able to play a role in this project, providing more sustainable solutions for polymer applications for ����AV and its customers.”

“This project can serve as a blueprint when it comes to establishing circularity in the field of plastics in cars,” says Jeroen Verhoeven, Vice President Value Chain Development for polymers and chemicals at Neste. “It shows how low-quality waste materials can be turned into very high-quality plastics. This is good news for the polymers and automotive industries as well as for the environment.”

The collaboration will be presented during the PIAE in Mannheim on June 19-20, 2024.

Desmopan^® FR is halogen-free with low-smoke characteristics, offering tailored performance levels to achieve an optimal balance of durability, safety and design flexibility. This series delivers exceptional performance, combining superior chemical resistance, high mechanical strength to withstand significant strain, and compliance with stringent regulations like VW-1, IEC 60332-1-2, RoHS and REACH.

“At ����AV, we recognize the challenges in the cable industry in achieving the right balance of flame retardancy and physical performance,” said Kevin Ho, Head of TPU in Asia Pacific at ����AV. “With the launch of our Desmopan^® FR TPU series, we are expanding our TPU portfolio in wire and cable with flame-retardant solutions that address the evolving market needs, particularly in the dynamic Asia-Pacific region. This enables our customers to stay ahead of the curve by meeting stringent fire safety requirements while aligning with sustainability.”

The Desmopan^® FR TPU series can be customized to precise specifications, optimizing performance and compatibility with specific cable designs and conditions, giving cable designers the flexibility to select the ideal jacket material.

“We collaborate closely with partners to co-create tailored solutions that meet their specific needs. This allows us to continuously innovate and adapt our solutions,” said Dr. Michael Schmidt, Global Innovation Head TPU. “Recognizing the competitive cable industry’s need to adapt to market trends, we offer a range of performance levels, enabling customers to achieve the optimal balance of mechanics, usability and flexibility.”

Additionally, ����AV provides the FR series in partially bio-based grades to meet the sustainability requirements of customers, particularly in the consumer electronics and mobility sectors.

The Blue Shield Market Development Award, granted by the CIAPST (China International Association for Promotion of Science and Technology) Security Identification Union and the organizing committee of SDS, marks a significant achievement. SDS is recognized as the most important annual ID conference in China.

More secure, sophisticated ID documents with PC and TPU films

At this year’s SDS held from May 28-29 in Beijing, ����AV is showcasing its all-in-one passport and ID card solutions, leveraging the company’s latest Makrofol^® ID polycarbonate (PC) and Platilon^® ID thermoplastic polyurethane (TPU) films.

These innovations include a passport cover solution employing TPU films, offering scratch and tear resistance, unique surface relief effects and color matching tailored to specific passport program requirements.

Furthermore, ����AV presents solutions for passport data pages and ID cards, such as sophisticated clear window designs enabled by thin, highly opaque white PC films; color-switching PC films for clear windows and transparent areas in ID documents; high-contrast laser-engravable PC films with level 3 forensic security features post-personalization; and PC films facilitating brighter holograms in PC ID documents.

Additionally, ����AV introduces a flexible and durable TPU hinge with tear propagation resistance to attach the PC data page to the passport cover.

To explore more about how ����AV’s film solutions can accommodate tomorrow’s needs today, visit the ����AV Specialty Films ID landing page at

Full-year guidance for 2024 confirmed 

Despite a solid start and positive volume development in the first quarter, ����AV expects macroeconomic conditions to remain volatile throughout the remainder of the year. The Group is thus confirming its full-year guidance and still expects EBITDA of between EUR 1.0 billion and EUR 1.6 billion. ����AV anticipates FOCF of between EUR 0 and EUR 300 million and ROCE above WACC of between –7 percentage points and –2 percentage points. The Group’s greenhouse gas emissions measured as CO₂ equivalents are expected to range between 4.4 million metric tons and 5.0 million metric tons. The Group anticipates EBITDA between EUR 270 million and EUR 370 million for the second quarter of 2024. 

“Our volumes have remained buoyant since the turn of the year and we’ve made a solid start to 2024 despite the current global challenges,” says Christian Baier, CFO of ����AV. “In view of the economic uncertainties, however, we remain cautious for the rest of the year. We continue to focus our efforts on creating a sustainable basis for growth through targeted capital expenditure and thus on strengthening ����AV’s future viability.”

Progress in driving the circular economy and climate neutrality

The Group remains focused on driving its vision of becoming fully circular and achieving climate neutrality. ����AV presented climate neutrality targets for Scope 3 emissions at its Annual Press Conference in February 2024 and finalized its climate neutrality strategy: By 2035, the Group aims to decrease its Scope 3 emissions by 10 million metric tons of CO₂ equivalents, using 2021 as baseline. ����AV likewise aims to make its operations climate neutral in terms of its Scope 1 and Scope 2 emissions by 2035 and to be completely climate neutral by 2050. 

To achieve these goals, ����AV is focusing on expanding renewable energies and cross-industry partnerships for joint solutions along the value chain, among other things. The Group is also committed to research and development. For instance, ����AV has produced a wide range of polycarbonate copolymers on an industrial scale in a new plant at its site in Antwerp, Belgium, since March of this year. The new technology developed by ����AV allows for the integration of new functionalities and properties into existing materials, such as enhanced flame retardancy. 

Another example of an innovative research success lies in the development of a new process for producing the chemical aniline entirely based on plant biomass, marking the first ever departure from traditional petroleum-based production. ����AV put a special pilot plant into operation for this purpose in February 2024. German Chancellor Olaf Scholz visited ����AV’s Asia-Pacific Innovation Center in Shanghai in April 2024 to witness the Group’s global innovativeness for himself. There, the company develops future-oriented, sustainable products, technologies and solutions geared towards future-important sectors, including electromobility, wind energy and photovoltaics, consumer electronics and construction. 

Higher sales volumes in both segments support sales development 

The Performance Materials segment posted a 5.7 percent decrease in sales to EUR 1.7 billion in the first quarter of 2024 (previous year: EUR 1.8 billion). In line with the overall Group trend, this was attributable in particular to the decline in average selling prices associated with lower raw material prices being passed on to customers. However, the increase in volumes sold, especially in the APAC and EMLA regions, contributed positively to sales. The segment’s EBITDA fell by 40.5 percent from the prior-year quarter to EUR 103 million (previous year: EUR 173 million), whereas the free operating cash flow was EUR –73 million (previous year: EUR –57 million). 

Sales in the Solutions & Specialties segment fell by 6.2 percent to EUR 1.8 billion (previous year: EUR 1.9 billion) in the first quarter of 2024, a reduction, mainly driven by lower selling price levels, yet there was an increase in sales volumes. The segment’s EBITDA rose to EUR 208 million, marking a 26.1 percent increase over last year’s first quarter (previous year: EUR 165 million). This increase was primarily driven by higher sales volumes. The free operating cash flow improved to EUR 22 million (previous year: EUR –48 million). 
 

Under a joint pilot program initiated by German federal enterprise GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit), ����AV and partners will collaborate to establish closed-loop pathways for high-value plastics from end-of-life vehicles (ELVs). The goal is to create an efficient and sustainable automotive plastic recycling system, advancing the more sustainable “transformation of the industry”. The pilot program was announced at ����AV’s booth during the CHINAPLAS 2024 international trade fair in Shanghai. Notable partners include leading automotive brand owners such as NIO of China and Volkswagen, Chinese recycling company GEM, and third-party certification bodies like TÜV Rheinland.

"We are proud to partner with like-minded value chain allies to pioneer closed-loop plastic recycling in the automotive sector," said Lily Wang, Global Head of the Engineering Plastics Business Entity at ����AV. "By leveraging our collective strengths and resources, we are confident in our ability to build a closed-loop for automotive plastics recycling, thereby reducing waste and carbon emissions at the source while improving resource use efficiency. Through this joint program, we aim to expedite the automotive industry’s transition toward a more climate-neutral and sustainable future."

"The automotive industry stands as one of the most resource-intensive sectors globally, yet the potential of high-value plastics from ELVs remain largely untapped," said Martin Hofmann, Cluster Head in charge of Climate, Energy, Environment and Biodiversity at GIZ. "GIZ is steering an innovative endeavor to explore closed-loop pathways for high-value plastics from ELVs. I firmly believe that GIZ and our partners can forge a path towards the transition to a sustainable, circular economy."

As part of the pilot program, a team of professionals will explore methods to recycle and process waste polycarbonate components, such as end-of-life car headlights, into post-consumer recycled (PCR) polycarbonates. The recycled materials will then be reused for various interior and exterior vehicle applications, saving resources and reducing carbon emissions.

This could offer urgently needed long-term solutions for the automotive manufacturing industry, which seeks high-quality PCR materials that are compliant and high-performance amid increasingly stringent regulations. For example, in 2023, the European Commission proposed a new regulation to enhance the circularity of the automotive sector, mandating that 25 percent of the plastics used in a new vehicle must come from recycling, of which 25 percent must be recycled from end-of-life vehicles.

����AV will also be showcasing more solutions for the automotive industry at its booth at the CHINAPLAS 2024, such as an intelligent front grill and mono-material polycarbonate headlamp that are designed for a connected and circular future.

For a closer look at ����AV’s solutions at the CHINAPLAS 2024, visit the company at booth 7.2-C38, at the National Exhibition and Convention Center (Shanghai) from April 23 to 26, 2024.

Initial market engagement with automotive brand owners for a serial application of a high-purity polycarbonate is promising, it would represent having a transparent polycarbonate attributed with chemically recycled raw materials.

"We are very excited to expand our existing portfolio of more sustainable polycarbonates with this new product range, which marks another milestone in building the circular economy," explains Lily Wang, Global Head of the Engineering Plastics Business Entity at ����AV. "Together with our partners, we are already helping to conserve fossil resources and to give a second life to existing waste streams. We also support our customers in achieving their sustainability goals by providing materials that meet the highest purity standards."

Recycled raw materials in trend

More and more industries are asking for products with a specific proportion of recycled raw materials, also in the expectation of upcoming regulatory requirements or voluntary programs, such as the European End-of-Life Vehicle Directive under review (ELV) and the U.S. Electronic Product Environmental Assessment Tool (EPEAT) for electronics products. The RP series offers identical quality as incumbent fossil grades and belong to ����AV's CQ family. The company uses this suffix to identify products that contain at least 25 percent alternative raw materials. At certain sites, such as Krefeld-Uerdingen in Germany, the plastics in the new range are also produced exclusively using renewable electricity.

The input for Makrolon^® RP is provided by Neste and Borealis: Neste provides high-quality recycled feedstock for new polymers, which is then turned into phenol and acetone by Borealis before it finds its way to ����AV’s site to produce Makrolon^® RP.

"Through chemical recycling, we can enable recycled content even for the most demanding applications," says Jeroen Verhoeven, Vice President Value Chain Development for Neste’s polymers and chemicals business. "Therewith, we can help companies across various sectors to achieve their recycling-related targets – and we are excited to see ����AV put it into motion."

"Borealis is very happy to support ����AV in this important initiative – helping to provide credible sustainable solutions and demonstrating the importance of value chain cooperation to give new value to waste," says Thomas Van De Velde, Borealis Senior Vice President Base Chemicals.

In addition to applications in the automotive industry, ����AV also wants to address other key industries such as the electrical & electronics and the healthcare industry. The aim is to manufacture high-quality and durable products with chemically recycled attributed feedstocks. At the end of a long usage phase, the plastics can still achieve a "third product life" through mechanical recycling and the further development of chemical recycling technologies.

The new series complements ����AV's existing portfolio of more sustainable polycarbonates – the mechanically recycled Makrolon^® R products and certified mass-balanced grades of the Makrolon^® RE series, which are produced using biowaste and bio-residues. The RE series are now also available with 25 percent renewable attributed sustainable share.

The first applications for the new grades could be in the electrical and electronics industry, as well as in healthcare. Both sectors are particularly well represented in Asia. For their use in housing parts, plastics of the new Apec^® XT line must above all offer freedom of design, dimensional stability, impact as well as chemical resistance and, in some cases, good flame retardancy.

There are also promising prospects for the copolymers in telecommunications and photovoltaics, for example in antenna housings, where weather-resistant, electrically insulating, ductile and flame-retardant materials are needed.

Further product innovations based on the new copolymer technology platform could focus on the automotive industry and infrastructure, where plastics from the new series have good prospects for use in housings for residential energy storage systems, charging stations and wall boxes, for example, thanks to their good electrical insulation properties, weather resistance and flame retardancy.

Apec^® XT grades will be designed to remain resilient even in the harshest conditions. The new copolymer technology enables the production of products that exhibit high impact strength even at temperatures as low as minus 40 degrees Celsius. In addition, these copolymers have improved chemical and ageing resistance, making them ideal for applications that require contact with aggressive cleaning agents and long durability in outdoor applications.

More sustainable products also available

APEC^® XT will also be part of the ����AV CQ portfolio of more sustainable product solutions. In that regard, ����AV will offer copolymer-based products in a version with up to 80 percent of ISCC PLUS-certified mass-balanced raw materials attributed from biowaste and bio-residues.

In addition, the company will offer products that incorporate recycled materials in order to also further reduce its environmental footprint. Moreover, due to its superior weatherability performance, the extended service life of APEC^® XT based products will improve product carbon footprint over its entire life cycle.

"We are deeply honored to welcome Chancellor Scholz and get the opportunity to highlight the potential of the chemical industry as well as ����AV to help drive sustainable change in China and the rest of the world,” said Chief Executive Officer Dr. Markus Steilemann. “Our decades-long presence in China epitomizes the spirit of Sino-German collaboration, which has been strongly beneficial for both sides. We count on the support of both governments in further catering for openness and mutual trust.”&�Բ�����;

During the visit at the Asia-Pacific Innovation Center, the German delegation, comprising government officials, business leaders and media representatives, gained insight into ����AV’s manifold business activities in China. The center provides world-class support in research and development to customers around the world, particularly in dynamic markets such as electric vehicles, wind energy and photovoltaics, consumer electronics and construction. Through collaboration, the center also explores new business models and digital research and development. 

“����AV remains deeply committed to China. We continuously strive to foster strong partnerships across the entire value chain”, said Holly Lei, President of ����AV China. ”By advocating for the circular economy and striving for climate neutrality, we support key industries and the country in their green transformation and high-quality development.”&�Բ�����;

China stands as one of ����AV’s primary markets, with sales in 2023 accounting for over 20 percent of the group’s total and cumulative investments exceeding EUR 4 billion. In Shanghai, ����AV has established a regional headquarters housing, besides the Asia-Pacific innovation hub, the global headquarters of its Business Entity Engineering Plastics, as well as the regional headquarters of many other businesses and functions. Additionally, the city is home to ����AV Integrated Site Shanghai, the company’s largest production site. 

In the project, 30,000 square meters of PV modules were installed on rooftops, parking lots, and unused areas at ����AV Integrated Site Shanghai (CISS). The facility commenced operations in late January, and is projected to generate 6 million kilowatt-hours annually for on-site consumption. Coupled with the existing PV facilities, the site’s total solar power generation is expected to reach 6.5 million kWh annually, resulting in a reduction of approximately 5,000 tons of carbon emissions. This reduction is equivalent to saving about 2,000 tons of standard coal on an annual basis.

This initiative underscores the company’s unwavering commitment to advancing renewable energy utilization as a core aspect of its pursuit of full circularity. In 2023, renewable energy accounted for over 40 percent of the electricity used by CISS – the company’s largest production site – largely facilitated through multi-year Power Purchase Agreements with suppliers such as CGN New Energy. 

“Integrating this new PV power generation facility represents another stride towards emission reduction and achieving full circularity for our site,” said Dr. Yun Chen, General Manager of CISS. “While the solar power it generates contributes only a fraction to our site’s power consumption, the message is clear: we are committed to aligning all our activities with circular principles and want to contribute to the circular economy with the materials we produce.”

Enhanced energy efficiency of solar panels with PU composites

By integrating PV modules with frames partially made of its polyurethane (PU) composites into this project, ����AV also aims to leverage its materials expertise to contribute to the dynamics of the photovoltaic sector. The frame is a crucial component in solar panel modules, serving to safeguard glass edges, enhance sealing performance, and bolster overall mechanical strength.

����AV, in partnership with China’s Zhejiang Deyilong, has introduced PU composite frames made of Baydur^® resin. These frames, utilized in the solar facility, demonstrate superior anti-corrosion performance. This durability renders them ideal for regions prone to high humidity and salt spray. As non-metallic insulating materials, PU composite frames mitigate Potential-Induced Degradation (PID), thereby enhancing the power generation efficiency of solar panels. Baydur^® composites have been certified by TÜV Rheinland and TÜV SÜD as suitable materials for solar panels.

Additionally, PU composite offers an 85 percent reduction in cradle-to-gate carbon footprint compared to traditional aluminum in solar frames due to its less energy-intensive production process.¹  

“This project not only reaffirms our commitment to advancing renewable energy in our factory production but also underscores the benefits of PU composites for solar panels,” said Akhil Singhania, Head of PU Specialties at ����AV’s Tailored Urethanes Business Entity. “This strategic initiative enables us to leverage our expertise and innovative solutions to meet the rising demand for sustainable energy solutions. By reducing our carbon footprint and optimizing resource utilization, we take pride in leading the charge towards a circular economy and driving positive change.”

¹ Internal calculations based on data from TÜV SÜD, which shows cradle-to-gate carbon footprint of each kilogram of 100 percent primary aluminum profile is 24.2 kilograms of CO₂ equivalent emissions.

����AV previously published ambitious targets for scope 1 and scope 2 emissions in 2022, which included achieving operational climate neutrality by 2035. Scope 1 emissions come from ����AV's own production processes, while scope 2 emissions result from purchased energy sources. Scope 3 emissions include all other greenhouse gases produced in the upstream and downstream supply chains. These make up around 80 percent of the company's total greenhouse gas emissions. Raw materials purchased by ����AV are responsible for the greatest share of scope 3 emissions.

Reducing scope 3 emissions will require a transformation of the entire supply chain. A variety of factors influence one another – including the availability of alternative raw materials, renewable energies, technological advancements and new processes, as well as market transformations – and play a key role in this process. To achieve net zero emissions, ����AV expects to make targeted investments amounting to several hundred million euros over the next 10 years.

“Our Scope 3 targets are both ambitious and realistic supported with a concrete implementation plan. This is an essential building block of our climate strategy. Completing our climate neutrality targets is another major milestone in aligning all of our activities with our vision of becoming fully circular. In this way, we are demonstrating once again that we take a leading role in transforming the chemical industry” says Dr. Markus Steilemann, CEO of ����AV.

Four levers for achieving our target and reducing scope 3 greenhouse gases

In its climate strategy, ����AV is concentrating on four scope 3 categories in the short to medium term¹. By managing these four categories, which together make up 21.3 million tons of greenhouse gases per year (as of 2021), ����AV will be able to reduce scope 3 emissions by 10 million metric tons by 2035. To do so, ����AV has identified four key levers. Projects related to these are already ongoing, with additional concrete implementation measures to follow.

“Calculating scope 3 emissions is challenging for us as a chemical company. This is because such emissions are generated both upstream, when we purchase raw materials and downstream, after we sell our products. Because of this, measures to reduce scope 3 emissions impact our suppliers as well as our customers and will require a transformation of the entire supply chain,” explains Dr. Torsten Heinemann, Head of Innovation and Sustainability at ����AV. “ Through innovation, cooperation with our partners along the supply chain, and a detailed plan of action involving all four levers, we will achieve our scope 3 targets”, Heinemann continues.

• The first lever requires suppliers to reduce their scope 1 and scope 2 emissions. Many of ����AV's raw material suppliers have already defined their own scope 1 and scope 2 targets, which in turn can count towards ����AV's scope 3 targets. ����AV is continuing its discussions with its suppliers on this issue, for example during a scope 3 supplier event the company will hold on March 4, 2024. Additionally, the company recently executed a long-term supplier agreement for chemically recycled raw materials with Encina. The January 2024 agreement covers the supply of raw materials produced from end-of-life plastics, which reduce ����AV's scope 3 emissions. Other important short-term changes include, for instance, electrification, improving efficiency, and carbon capture and storage (CCS) in supplier production processes.
• The second lever is the profitable sale of products made from alternative raw materials. ����AV already has circular solutions in its product portfolio under the CQ (circular intelligence) label. CQ products are made of at least 25 percent alternative, non fossil-based raw materials.
• ����AV's third lever to reduce scope 3 emissions are its MAKE projects. These are investment projects in which ����AV manufactures alternative raw materials with a smaller carbon footprint. These projects include, for instance, manufacturing bio-based aniline or using proprietary recycling technologies to make it possible to use recycled raw materials. Another example of a MAKE project is ����AV's Evocycle CQ technology, which is used to recycle mattresses.
• The fourth lever encompasses a large number of different factors that help to reduce scope 3 emissions. These include, for instance, increasing recycling rates to reduce emissions from waste incineration, and changes to logistics and primary energy extraction. In addition, ����AV will accelerate innovation processes through digital research and development and artificial intelligence.

Climate neutrality can only succeed through close cooperation along the entire supply chain. ����AV’s scope 3 climate neutrality targets are an important part of this and will be implemented alongside customers and suppliers.

^{1 Raw materials (part of category 3.1); end-of-life (EoL) handling (category 3.12); fuel and energy-related (category 3.3); upstream transportation (category 3.4)}

The lower than average selling prices and decreased sales volumes, resulting from weak global demand, led to a decline in Group sales. Compared to the previous year, 2023 saw a decrease in sales by EUR 3.6 billion (–20%) to EUR 14.4 billion (previous year: EUR 18 billion). EBITDA fell by EUR 537 million (–33.2%) to EUR 1.1 billion (previous year: EUR 1.6 billion). Although net income in fiscal year 2023 remained negative at EUR –198 million, it nevertheless improved slightly compared to the previous year (EUR –272 million). In addition, thanks to consistent working capital management, ����AV again generated a positive free operating cash flow (FOCF) of EUR 232 million (previous year: EUR 138 million). ROCE above WACC was –6.1 percentage points (previous year: –5 percentage points). Greenhouse gas emissions for Scope 1 and 2 rose slightly to 4.9 million metric tons of CO₂ equivalents (previous year: 4.7 million metric tons). This is among others due to a more emission-intensive energy mix for purchased power and steam in the United States and Germany last year. 

“2023 was one of the most difficult years for the chemical industry in recent decades with ongoing geopolitical tensions, an ailing global economy and high energy prices, especially in Europe. In addition, there are a number of structural problems, especially in Germany. The overall weak demand for our core industries is reflected accordingly in our earnings,” says Dr. Markus Steilemann, Chief Executive Officer of ����AV. “That is why we have been even more resolute in driving the implementation of our strategy “Sustainable Future” in the past year. For this, we are relying on four key levers: We are permanently getting more out of our facilities, we are boosting sales volumes and optimizing capacity utilization, we are focusing on high-margin demand and, last but not least, we will continue to be cost-conscious. In doing so, we continue to put all our energy into ����AV’s transformation in 2024.”

With a negative net income in 2023, the ����AV Board of Management made the decision not to distribute any dividend for the fiscal year 2023. This decision was made in keeping with the Group’s dividend policy, which calls for a payout ratio of between 35% and 55% of net income. ����AV has created a stronger link to the Group’s overall business situation. 

Foundation for sustainable growth expanded 

“2023 was again defined by a weak global economy. As a result, although we closed the fiscal year in line with our estimates, we want to get back on track for growth, particularly with regard to our volumes and EBITDA performance,” says Christian Baier, CFO of ����AV. “To that end, in 2023, as part of our growth strategy, we implemented important principles: We are cutting costs, continuing to invest in the right places, ensuring that our plants have the right capabilities to deliver, and leveraging efficiencies. We are therefore taking the right steps to position ourselves for long-term sustainable growth.”&�Բ�����;

Despite the very challenging environment in 2023, ����AV has continuously worked on optimizing its production processes in the past fiscal year. For example, the company improved the energy efficiency of its production facilities in Shanghai, China, and Dormagen, Germany. In addition, the Group reduced its fixed costs by a mid three-digit million euro amount in 2023. 

At the same time, ����AV invested in the expansion of its sustainable product range and production capacities, which also included commissioning a polycarbonate compounding plant for mechanical recycling at its site in Shanghai, China last year. ����AV will thus be able to supply more than 60,000 metric tons of high-quality polycarbonates made from mechanically recycled materials annually in the Asia-Pacific region by 2026. 

Climate neutrality target for Scope 3 emissions announced 

The efficiency measures implemented and initiated last year have allowed ����AV to further strengthen its foundation for sustainable growth and make more progress towards a circular and climate neutral economy. 

In this context, ����AV has now completed its climate strategy to reduce greenhouse gas emissions. In 2022, ����AV announced ambitious targets for scope 1 and scope 2 emissions with the aim of making its operations climate neutral by 2035. ����AV is now taking the next step and, as a short-term goal, plans to reduce its scope 3 emissions by 10 million metric tons by 2035. That corresponds to a drop in emissions of 30% compared to the 2021 base year. In the long term, ����AV aims to be climate neutral in its scope 3 emissions by 2050.

����AV also made further progress in the use of renewable energy in 2023 and concluded a virtual power purchase agreement (vPPA) for its third-largest production site worldwide in Baytown, Texas, United States. That will result in around 70,000 metric tons of CO₂ emissions being offset starting from the end of 2024. This follows several power purchase agreements that ����AV already signed in recent years for its sites in Europe and Asia. In total in 2023, ����AV covered around 16% of its global electricity demand with renewable sources (previous year: 12%). 

Outlook 2024: EBITDA between EUR 1.0 billion and EUR 1.6 billion anticipated 

����AV expects economic conditions to remain challenging in 2024. The company will therefore pay special attention to leveraging its own potential in 2024 to achieve even greater efficiency. Against this backdrop, the Group expects EBITDA of between EUR 1.0 billion and EUR 1.6 billion for fiscal year 2024. ����AV anticipates FOCF of between EUR 0 and EUR 300 million and ROCE above WACC of between –7 percentage points and –2 percentage points. The Group’s greenhouse gas emissions measured as CO₂ equivalents are expected to be between 4.4 million metric tons and 5.0 million metric tons. The Group anticipates that EBITDA for the first quarter of 2024 will be between EUR 180 million to EUR 280 million. 

Weak demand impacts sales development in both segments. Lower costs support EBITDA in Solutions & Specialties 

The weak global demand situation is also evident in the segment breakdown: Sales in the Performance Materials segment in fiscal year 2023 fell by 24.4% to EUR 6.9 billion (previous year: EUR 9.1 billion). This decline can mainly be attributed to a lower selling price level and lower volumes sold. Due to lower margins, EBITDA fell by 39.4% to EUR 576 million (previous year: EUR 951 million). As a result, FOCF fell by 70.2% to EUR 162 million (previous year: EUR 544 million). 

Sales in the Solutions & Specialties segment fell by 15.1% to EUR 7.3 billion in fiscal year 2023 (previous year: EUR 8.6 billion), again mainly due to lower average selling prices and lower sales volumes. EBITDA still remained slightly lower at EUR 817 million (previous year: EUR 825 million). This was primarily due to the positive trend in margins, since lower raw material and energy prices more than compensated for the decline in selling prices. Lower fixed costs and the sale of the Additive Manufacturing business also had a positive effect. The segment’s FOCF increased by 182.6% to EUR 551 million (previous year: EUR 195 million). 

Fourth quarter 2023 with positive EBITDA and cash flow 

����AV’s sales decreased in the fourth quarter of 2023 by 15.6% to around EUR 3.3 billion (previous year: EUR 4.0 billion). This development is primarily due to the lower price level in the fourth quarter of 2023. EBITDA amounted to EUR 132 million in the last quarter of 2023 (previous year: EUR –38 million). FOCF amounted to EUR 73 million and was therefore also positive in the fourth quarter of 2023 (previous year: EUR 550 million). 

“Securing the title of Top Employer China for six years in a row stands as a remarkable affirmation, underscoring our steadfast commitment to advancing employee well-being, encouraging diversity, equity and inclusion (DEI), and fostering an enriched workplace,” said ����AV China President Holly Lei. “At ����AV, we recognize that our employees are the linchpin of our enduring success in this challenging time. We have been consistently empowering our people through a diverse range of programs and initiatives, while bolstering the agility and resilience of our organization to ensure long-term, sustainable growth.”

In the realm of well-being, ����AV China prioritizes the physical and mental health of its staff. Approximately 30 employee independent well-being clubs, falling under sports and entertainment categories, operate with enthusiastic involvement from company management as role models. Since 2022, ����AV has implemented the Harvard Happiness Course, designed to enhance employee happiness through targeted attention and exercises across five dimensions: spirit, body, mindset, relationship, and emotion. The establishment of the “Happiness Club” in 2023 has seen increased participation, indicating a growing interest in the pursuit of happiness through learning and experience. These initiatives also play a pivotal role in strengthening the DEI landscape within ����AV.

Elsewhere, ����AV has also been consistently enhancing its commitment to people development. The company has integrated and refined the overarching framework, concepts, and tools, with the launch of a dedicated “People Development Experience Room.” This innovative space serves as a central hub for enlightening employees about ����AV’s people development concepts and tools. It offers a holistic view, prompting self-reflection among employees and managers regarding their personal and team development, and igniting enthusiasm across the workforce to embrace and apply the development tools.

“At ����AV, we align employee aspirations with the company’s objectives for joint success, prioritizing people in the continuous strengthening of our people development framework and concept. We care deeply about employee well-being and strive to improve their happiness and engagement. Through a variety of initiatives, including the implementation of digital tools and programs, we actively elevate the employee experience and facilitate effective organizational decision-making,” said Lesley Lin, Head of Human Resources, Greater China, ����AV.

The Top Employers Institute program certifies organizations based on the participation and results of their HR Best Practices Survey, which covers six HR domains consisting of 20 topics, including people strategy, work environment, talent acquisition, learning, diversity, equity and inclusion, and well-being.

As part of this collaborative effort, the initial phase involves the introduction of the first electric heavy-duty truck to replace the existing diesel truck for transporting polymeric diphenylmethane diisocyanate (pMDI) from the Shanghai site to nearby warehouses. This transition is set to cover part of the annual pMDI shuttle volume at ����AV’s largest production site, resulting in a projected reduction of 43 tons of CO₂ equivalent in well-to-wheel emissions (CO₂ emissions over the entire life cycle of fuels) in 2024 compared to the 2022 baseline – a 22 percent decrease. The future use of green power to charge the trucks will further contribute to the goal of achieving net zero in logistics.

Both companies will consistently evaluate the electric truck’s performance and efficiency, aiming for continuous optimization of the total cost of ownership associated with the vehicle. Based on these evaluations, decisions will be made regarding potential scalability.

"As a pivotal route toward achieving net zero, green logistics is poised to deliver sustainable solutions for mitigating scope 3 emissions. We look forward to working with ����AV to advance the exploration and adoption of sustainable logistics solutions in the chemical industry and contribute to the ultimate goal of net-zero emissions from the logistics side," said Fu Peng, Executive Vice President of COSCO Shipping Logistics & Supply Chain Management.

"The supply chain plays a crucial role in the chemical industry’s journey to achieve climate neutrality, demanding collaboration beyond individual company boundaries. The commercial deployment of this groundbreaking electric truck for chemical shuttling is poised to act as a catalyst, propelling our site and company towards climate neutrality and a circular economy," stated Dr. Yun Chen, General Manager of CISS.

Contributing to scope 3 emissions reduction

Approximately 80 percent of ����AV’s total emissions stem from scope 3 emissions, or indirect emissions resulting from upstream and downstream processes, including supply chains, material transport, and raw material processing.

In the Asia Pacific region, where around 70 percent of ����AV’s products are transported by truck, concerted efforts to reduce emissions within the logistics framework are specifically targeted at trucks. In light of this, the green logistics program was launched last year with the objective of devising more sustainable methods for road transportation via trucks. Collaborators in this endeavor include customers, logistics solution and infrastructure partners, and industry organizations, with the network steadily expanding.

The program is designed to rigorously assess the viability of specific strategies under distinct scenarios. Among the explored solutions is the utilization of subsidized biodiesel in Shanghai for long-haul transport of dangerous goods, as well as the integration of hydrogen fuel cell-powered trucks.

"We are committed to expanding our network of partnerships to actively seek, pilot, and scale up sustainable, low-carbon logistics solutions that meet both environmental and commercial needs. We anticipate continued progress in introducing new solutions aimed at significantly reducing our scope 3 emissions, thereby propelling us towards a climate-neutral future," said Marius Wirtz, Senior Vice President, Supply Chain & Logistics Asia Pacific, ����AV.

����AV has said that it is aiming to become operationally climate neutral – this includes reducing both direct emissions from its own operations (scope 1) as well as indirect emissions from purchased energy (scope 2) to net zero – by 2035. The company is poised to unveil its reduction targets for scope 3 emissions soon.

Since the new dispersion has the same outstanding properties as the established one, as well as a high solids content of 55 percent, customers can now replace Impranil^® DLU one-to-one with Impranil^® CQ DLU in their processing operations – and thereby easily achieve an additional increase in textile coating sustainability. Sustainability is increasingly becoming a key purchasing criterion not only for the industry, but also for brand owners and consumers. CQ stands for "Circular Intelligence". The core idea of the CQ concept is to label ����AV products if the alternative raw material base exceeds a content of 25 percent, as in this case.

As the raw material for INSQIN^® technology, the established Impranil^® DLU already enables aqueous textile coating without the use of solvents. The ecological footprint of such a coating is significantly lower than that of solvent-based systems. "With the innovation Impranil^® CQ DLU as part of our Impranil^® CQ portfolio, we are now enabling the textile coatings industry to take the next step towards more sustainability through the increased use of renewable resources," says Dr. Torsten Pohl, Head of Global Textile Coatings at ����AV.

Impranil^® CQ DLU is suitable, among other things, for producing synthetic materials for sports articles, technical textiles, car interiors, and bags. Properties of coatings based on the new high-performance dispersion include excellent hydrolysis resistance, very good lightfastness, as well as high tensile strength and scratch resistance. In addition, the coatings have a pleasant feel and good alkali resistance. Impranil^® CQ DLU can be used for both the intermediate coat and the top coat. The dispersion can be applied in various ways: The spectrum ranges from direct or transfer coating to printing processes and microfiber dipping.

Visit us at the Automotive Interiors Expo

From December 5 to 7, 2023, visitors to the Automotive Interiors Expo in Stuttgart can explore the new PU dispersion for themselves: A car interior door panel coated with Impranil^® CQ DLU will be demonstrated at the ����AV exhibition stand no. 3424 in Hall 3.

The low-carbon-footprint PUDs contain alternative raw materials derived from bio waste and residues, and their attribution is achieved through the mass balance approach. Mass balance is a chain of custody method that allows for the mixing of fossil and alternative feedstock during production but separates them in bookkeeping. The materials are tracked through the value chain and are finally attributed to selected end products with an accounting process certified to ISCC PLUS. CISS received its ISCC PLUS certification in 2021.

As a seamless drop-in solution, mass-balanced PUDs facilitate a smooth transition from fossil-based to circular solutions without altering existing processes or technologies, thus ensuring consistent product quality and properties for customers.  

“As our sustainable product portfolio grows, ����AV reinforces its capability to assist customers and partners in transitioning to a circular economy. We aim to address the rising demand for more sustainable PUDs in Asia while fortifying capabilities and innovating for a global customer base,” said Anand Khot, Senior Vice President of Coatings and Adhesives in Asia Pacific, ����AV.

With a proven track record in supplying mass-balanced products and bio-based products globally, ����AV is fully equipped to deliver more sustainable materials with the “CQ” label for coatings and adhesives, including PUDs, waterborne acrylics or polyesters, among others, to the Asia Pacific market. Products labelled as such consist of at least 25 percent alternative, non-fossil raw materials.

Moreover, ����AV is intensifying efforts to source more renewable energy to power its production sites. This will help expand its portfolio of sustainable coating and adhesive solutions. Notably and thanks to several Power Purchase Agreements, renewable power already accounts for about 45 percent of CISS’s electricity consumption.

¹ The percentage of alternative raw materials based on solids depends on the specific product and application and may vary significantly.

“China is one of ����AV’s largest markets and one of the world’s largest polyurethane markets. ����AV remains committed to strengthening its presence within the market while fostering the advancement of industry clientele. The completion of our new facility for polyurethane dispersions (PUD) in Shanghai exemplifies our dedication to meeting the burgeoning demand for sustainable coatings in Asia Pacific, especially China,” affirmed Anand Khot, Senior Vice President of Coatings and Adhesives Asia Pacific at ����AV.

The #STATUSNEXT series events feature online seminars and virtual exhibition halls. These platforms are thoughtfully designed to offer industry colleagues a flexible, convenient, and highly efficient communication channel.

Commencing with innovation: expanding product portfolio  

����AV remains customer centric, perpetually broadening its product portfolio to meet the industry’s stringent requirements for carbon reduction, emissions reduction, and heightened quality and efficiency. The latest additions comprise:

·&�Բ�����;&�Բ�����;&�Բ�����;&�Բ�����;&�Բ�����;&�Բ�����; The Desmodur^® N 31500 hardener, innovatively developed in China, is designed for metal coatings in railway transportation. It meets industry needs for low-carbon emission and high-efficiency coating processes. It is suitable for two-component non-baking high-solids coating systems, enabling fast drying and DTM (direct to metal) processes. In a single rolling stock workshop, this system potentially saves about 25 percent of energy for 1,000 carriages annually, reducing CO₂ emissions by approximately 24,000 tons. Additionally, Desmodur^® N 31500 can enhance production efficiency and workplace hygiene in automated coating and sanding processes.

·&�Բ�����;&�Բ�����;&�Բ�����;&�Բ�����;&�Բ�����;&�Բ�����; Desmodur^® ultra E 30800, a solvent-free polyisocyanate crosslinker based on HDI, is specifically designed for the Pasquick^® coating system. It has diverse applications in flooring, grout, anti-corrosion coatings, and beyond. With low monomer content, it prioritizes industrial hygiene and safety. Its low viscosity removes the need for solvent dilution during use, striking a balance between extended pot life and fast drying. Additionally, it provides excellent water resistance and durability while maintaining a balance between rigidity and flexibility.

·&�Բ�����;&�Բ�����;&�Բ�����;&�Բ�����;&�Բ�����;&�Բ�����; The upgraded waterborne acrylic emulsion, NeoCryl^® XK 824, is locally developed to address challenges posed by adverse weather and environmental conditions in industrial coating applications. This upgraded product excels in early water resistance, crucial for safeguarding against potential damage in humid environments during the coating and curing process, ensuring the surface integrity of workpieces. With its high solid content, NeoCryl^® XK 824 enables the rapid stacking of workpieces after coating, significantly enhancing production efficiency. Furthermore, its remarkable salt spray resistance enhances the performance of industrial light anticorrosive coatings, making it suitable for use as primers, topcoats, and mono-coat systems on metal substrates.

·&�Բ�����;&�Բ�����;&�Բ�����;&�Բ�����;&�Բ�����;&�Բ�����; Driven by sustainable development trends in the packaging industry, paper-based packaging materials are widely used. ����AV’s new waterborne acrylic emulsion, NeoCryl^® A 2085, is specially developed for barrier coating of food-contact-grade paper packaging. This product provides excellent water and grease resistance, effectively preserving the taste and quality of packaged foods. This innovative technology serves as a sustainable alternative to traditional polyethylene (PE) laminating films. Packaging featuring NeoCryl^® A 2085 is a responsible option, aligning with regulations to ensure consumer health and safety by avoiding the use of PFAS (per- and polyfluoroalkyl substances). Additionally, NeoCryl^® A 2085 contributes to promoting paper recycling and reuse, as demonstrated by repulping test results exceeding 90 percent.

·&�Բ�����;&�Բ�����;&�Բ�����;&�Բ�����;&�Բ�����;&�Բ�����; In the pursuit of a circular economy, alternative raw materials play a crucial role. ����AV introduces Decovery^® CQ 6010, a partially bio-based waterborne acrylic emulsion with 37 percent bio-based content. Its barrier performance is comparable to traditional fossil-based products when used for barrier coating. This coating ensures food freshness with a low moisture vapor transmission rate (MVTR). Decovery^® CQ 6010 serves as a viable alternative to multi-layer paper-based food and non-food packaging materials produced through polyethylene (PE) lamination coating processes. Test results, including a repulping test exceeding 90 percent, align with the commitment to recycling and reusing paper-based food packaging.

Cultivating service capabilities

����AV has been actively expanding its product portfolios to meet evolving development needs across various industries. Concurrently, the company has been enhancing its service capabilities to effectively cater to the diverse demands within specific sectors. In collaboration with Du Huanzheng, a professor from Tongji University and FoodTalks, an industry portal, ����AV has co-authored a comprehensive white paper titled “Sustainable Packaging Innovation Trends: How Food and Beverage Companies Achieve ‘Comprehensive Recycling’.”  This publication delves into strategies for guiding packaging technology towards recyclable and sustainable pathways, covering a range of topics—from the recycling of paper-based materials to monomaterial flexible packaging and the utilization of bio-based inks and adhesives.

Joining forces for global automotive advancement

����AV excels in offering a diverse array of solutions for the automotive industry. Polyurethane, invented by Otto Bayer at ����AV’s predecessor company Bayer, is the vital material for automotive interiors. Polyurethane-based automotive interior applications, such as instrument panels, door panels, and center armrests, offer a soft, tactile feel, enhancing the comfort of both drivers and passengers. Polyurethane materials are known for their lightweight properties, minimal odor, and low levels of volatile organic compounds. These attributes create a comfortable and environmentally compatible interior environment, answering key demands of the automotive industry.

Having cultivated a successful cooperation with Xinquan for ten years, ����AV possesses a deep understanding of the evolving requirements of Chinese enterprises striving to expand their global presence. Xinquan’s global expansion strategy involves localizing research, production, and sales, in the respective regions. Its plant in Mexico has already started production last year, and there are plans for a North American technical center along with new facilities in Europe and ASEAN.

����AV is well-equipped to effectively support Xinquan’s global aspirations. With its focus on innovation and research, ����AV has established ten innovation hubs across America, Asia and Europe. Furthermore, ����AV operates production facilities in Mexico and the U.S., where they have delivered polyurethanes to Xinquan’s new plant in Mexico. The partnership exemplifies the effectiveness of globalization in driving innovation and highlights ����AV’s commitment to globalization and expanding its presence in key markets.

"����AV thrives on dynamic global partnerships, fueling innovation and tailoring solutions for the automotive industry. Together, we power our customers’ global expansion and zero-carbon journey. At ����AV, customer centricity isn’t just a phrase – it’s our energizing force, creating unmatched value through vibrant collaborations," said Christine Bryant, Head of the Tailored Urethanes Business Entity at ����AV.

Low-carbon polyurethane solutions for auto interiors and new energy vehicles

Expanding their technical collaboration, ����AV and Xinquan will harness ����AV’s global R&D capabilities to develop low-carbon polyurethane solutions for vehicle interiors by using partially bio-based raw materials. Besides, the cooperation extends to the development of polyurethane applications for electric vehicle battery packs. This partnership is intended to assist the automotive industry in attaining its carbon reduction objectives and embracing circular economic practices.

"During Xinquan’s global expansion, we have worked with ����AV closely to share resources and complementary advantages. By improving production efficiency and quality, reducing costs and risks, Xinquan has strengthened its core competitiveness," said Zhihua Tang, Chairman of Xinquan. "With this new global partnership, we will jointly promote technological innovation and low-carbon applications of polyurethane materials to advance the sustainable development in the automobile industry."

For a closer look at ����AV’s solutions for a fully circular future at the CIIE, visit us at booth 3B6-05, at the National Exhibition and Convention Center (Shanghai) from November 5 to 10, 2023.

Thanks to its long history in polyurethanes chemistry, ����AV boasts a portfolio of insulation material solutions renowned for exceptional thermal and weather resistance. Initially used in refrigeration, they have great potential to enhance energy efficiency in construction.

“����AV is devoted to becoming fully circular. At the same time, we help our customers and major industries to achieve climate neutrality through our material innovations.¹ The construction industry, particularly in China, is central to this mission. With our new partnerships we will expedite the adoption of more sustainable construction practices in China and jointly play a vital role in mitigating climate change,” said Dr. Markus Steilemann, CEO of ����AV, during the signing of agreements with named companies at the China International Import Expo (CIIE), an event dedicated to promoting imports and international trade.

One key collaboration involves PDG Group and insulation integration specialist Collodin, working on an innovative polyurethane exterior wall insulation system designed to be thinner and lighter than conventional alternatives. This system, named the ‘carbon-optimized composite wall insulation structural integration system’, combines polyurethane insulation with low thermal conductivity and a lightweight non-combustible layer, further reinforced by composite tie bars, ensuring superior insulation. A comprehensive study will evaluate its energy efficiency, safety, and economic viability before implementation on the developer’s future projects, provided it meets all compliance conditions.

“We look forward to partnering with sustainable material expert ����AV in promoting this innovative solution, which could also set new standards in the industry. We believe this collaboration will facilitate the transformation and upgrade of the construction sector, promoting low-carbon, high-quality development in line with China’s dual carbon goals,” emphasized Li Junlan, Chairman of PDG Group.

Another groundbreaking partnership involves Lujiazui Group and Chinese composite profile maker Deyilong. Together, they are developing a low-carbon, energy-efficient window and door system tailored to meet Shanghai’s requirements on ultra-low energy buildings. This system will leverage ����AV’s Baydur^® Pultrusion, a composite material with exceptional thermal insulation, mechanical strength, and durability. The whole window system thereby can be made thinner for better aesthetics.

“We look forward to working with partners including ����AV, which has a proven track record in the field of efficient insulation in windows and doors. We aim to leverage Lujiazui Group’s property development strengths in Pudong, Shanghai to promote these excellent window and door systems and help elevate the industry’s energy efficiency level,” said Xu Erjin, Chairman of Lujiazui Group.

“We are excited to be connected by the CIIE with Chinese property developers, which provides us with new opportunities that will last long. We intend to promote more sustainable and low-carbon solutions for the construction industry, enhance market penetration of energy-saving building solutions, and make efforts towards China’s infrastructure development and dual carbon goals,” said Holly Lei, President of ����AV China.

For a closer look at ����AV’s solutions for a fully circular future at the CIIE, visit us at booth 3B6-05, at the National Exhibition and Convention Center (Shanghai) from November 5 to 10, 2023.

^{1 Carbon neutrality of ����AV products is the result of an internal assessment of a partial product life cycle from raw material extraction (cradle) to the factory gate (of ����AV), also known as cradle-to-gate assessment. The methodology of our LCA, for which an external audit and certification will soon be available, is based on the ISO 14040 and 14044 standards. The calculation takes into account biogenic carbon sequestration based on preliminary data from the supply chain. No compensation measures were applied.}

This milestone was inked at ����AV’s booth during the China International Import Expo (CIIE), an annual event dedicated to promoting imports into China and fostering international trade and cooperation. The other partners are Jolywood (Suzhou) Sunwatt Co., Ltd., Zhejiang Deyilong Technology Co., Ltd., Changzhou Fusion New Material Co., Ltd., Shanghai Institute of Microsystem and Information Technology of the Chinese Academy of Sciences, and COSCO Kansai Paint & Chemical Co., Ltd. 

In alignment with China’s “double carbon” goals, the country continues to advance the reform of its industrial and energy structure, dedicating significant efforts to bolster clean energy, notably solar power. Leveraging its material expertise, ����AV plays a dynamic role in PV module production, elevating their efficiency and introducing alternative raw materials. This approach enables ����AV and collaborators to tackle technical challenges and advance the green transformation of the PV industry itself, while remaining attuned to evolving industry trends. 

Anand Khot, Senior Vice President of the Coatings and Adhesives segment of ����AV in Asia Pacific, said, “As a leading materials supplier, ����AV is committed to introducing viable new technologies and delivering differentiated services. At the same time, we aspire to empower the growth of the photovoltaic industry and contribute to the realization of a circular economy and climate neutrality through comprehensive cooperation with our customers.”

Diversified solutions

As a fresh and dynamic entrant in the PV industry, ����AV is poised to offer a wide array of material solutions through the newly launched platform. These solutions aim to enhance power generation efficiency, reduce module weight, and extend the service life of PV modules. Meanwhile, they empower customers to innovate and develop new products, all the while contributing to a reduction in their carbon footprint. For instance:

·&�Բ�����;&�Բ�����;&�Բ�����;&�Բ�����;&�Բ�����;&�Բ�����; Covestro’s coatings raw material solution can ensure that two-sided coated backsheets achieve a light transmittance exceeding 93 percent, enable bi-facial PV modules to reduce their weight by 20 percent and increase power generation by 1.29 percent. Additionally, these modules exhibit outstanding aging resistance, guaranteeing a service life of over 25 years.

·&�Բ�����;&�Բ�����;&�Բ�����;&�Բ�����;&�Բ�����;&�Բ�����; ����AV’s low-temperature photovoltaic silver paste polymer solution, integrated into next-generation cell technology, excels in enhancing photoelectric conversion efficiency. Furthermore, its capability to cure at temperatures below 200 degrees Celsius contributes to a notable reduction in energy consumption.

·&�Բ�����;&�Բ�����;&�Բ�����;&�Բ�����;&�Բ�����;&�Բ�����; Decovery^®, a bio-based waterborne coating raw material, is a viable choice for coating containerized energy storage systems. By replacing conventional fossil-based solvent-borne materials, it reduces carbon emissions by more than 20 percent and effectively diminishes emissions of volatile organic compounds. Importantly, its application doesn’t require any modifications to the painting process, thus preserving work efficiency. This represents a step forward as ����AV extends its material applications from photovoltaic modules to encompass related energy storage systems for the first time.

·&�Բ�����;&�Բ�����;&�Բ�����;&�Բ�����;&�Բ�����;&�Բ�����; Polyurethane composite frames for PV modules, made of ����AV’s Baydur^® resin, boast remarkable mechanical properties, featuring an axial tensile strength over five times that of aluminum alloy frames. Additionally, they demonstrate exceptional resistance to salt mist and chemical corrosion, rendering them suitable for coastal and offshore solar farms with elevated humidity levels. These frames, being non-metallic, contribute to mitigating power attenuation in the modules and eliminate the need for grounding. Overall, it is a more cost-effective solution with a significantly lower carbon footprint compared to aluminum alloy frames.

“����AV’s innovative solutions offer us new opportunities and a brighter outlook for development,” said Cheng Xudong, General Manager of Jolywood (Suzhou) Sunwatt Co., Ltd. “We aim to optimize technological advancements and enhance energy efficiency to create sustainable PV products, thus propelling the progress of the PV industry through our collaboration.”

“����AV is at the forefront of product development and innovation within the industry. We anticipate continued collaboration with ����AV to infuse fresh vigor into the photovoltaic sector, particularly in the realms of circular economy and achieving net-zero emissions, which will contribute to China’s green transformation and society development,” said Liu Zhengxin, a professor at Shanghai Institute of Microsystem and Information Technology.

����AV aims to assist partners in the photovoltaic industry chain in creating products with higher added value and a reduced carbon while advancing their technologies. This will be realized through the utilization of alternative raw materials and the adoption of more sustainable production processes, ultimately driving the sustainable development of both the industry and society.

For a closer look at ����AV’s solutions for a fully circular future at the CIIE, visit us at booth 3B6-05, at the National Exhibition and Convention Center (Shanghai) from November 5 to 10, 2023.

����AV will leverage its innovation capabilities and local market insights through this partnership to address the challenges facing the industry in its transition to sustainability, such as high energy consumption resulting from complex multi-step baking processes and the low efficiency associated with manual coating application.

“In alignment with the objectives of China’s 14^th Five-Year Plan, which emphasize green advanced manufacturing and the high-quality development of railroad vehicles, CRRC Tangshan has been proactively engaging with innovative materials manufacturer ����AV and paint maker Paint-Key to explore energy-saving and emission-reduction solutions,” said Ma Xiaofeng, Director of Manufacture Technology Center at CRRC Tangshan Co., Ltd. “We have already made tangible progress, and with this partnership, we are excited about our role in guiding the railway transportation industry into a new era of sustainability.”

“Paint-Key is committed to fostering scientific and technological innovation. Our primary focus is to transform scientific and technological breakthroughs into specialized coating solutions that effectively address industry-specific challenges,” said Ye Fuqiang, President of Suzhou Paint-Key Material Science Co., Ltd. “The cooperation agreement with ����AV and CRRC Tangshan aims to advance various aspects of railway transportation painting, including production efficiency, energy conservation, carbon reduction, and the promotion of water-borne solutions.”

����AV’s low-carbon emission coating solutions for the railway transportation industry play a pivotal role in CRRC Tangshan’s transition towards a greener, low-carbon future, serving as the central focus of the latest cooperation agreement.

High-speed railroad car components, such as wheel bogies, traditionally require multi-layer coating and multi-step baking production processes. ����AV’s low-carbon coating solution is designed for two-component, non-baking systems, enabling rapid curing and direct to metal (DTM) application for enhanced efficiency. This innovation empowers CRRC Tangshan to streamline its coating processes and significantly reduce workshop energy consumption related to coating baking. Consequently, this solution is expected to save approximately 20 million kilowatt-hours annually in the final production workshop. This estimation is based on an annual production of 1,000 carriages, equating to roughly 25 percent of the current energy consumption. Additionally, the adoption of a non-baking system is expected to contribute to an annual reduction of approximately 24,000 tons in CO₂ emissions.

Traditional putty used in railway vehicle bodywork relies on unsaturated polyester systems and manual application. ����AV’s low-carbon solution revolutionizes this process by enabling automated spraying and sanding of putty, along with rapid ambient curing. This breakthrough has the potential to significantly enhance vehicle production efficiency, with an estimated reduction of 40 percent in the production cycle time.

“We’re committed to a ‘customer-centric’ approach, leveraging our robust research and development capabilities to comprehensively support urban rail and high-speed rail in elevating their green manufacturing standards,” said Li Jinqi, Vice President of ����AV’s Coatings and Adhesives segment in Greater China. “Beyond our energy-saving and carbon-reduction solutions, we also provide cutting-edge waterborne coating solutions for the railway transportation sector, providing practical greener solutions from the raw material end. By doing so, we aim to transform the vision of a circular economy into reality.”

����AV’s waterborne topcoat solution for high-speed trains has successfully completed 300,000 kilometers of off-road testing, fulfilling commercial standards. This solution exhibits outstanding weather resistance and chemical durability, capable of withstanding adverse factors like wind, sand, stones, and changing weather conditions, satisfying the stringent requirements for high-speed train topcoats. It also delivers a high-gloss finish that meets the aesthetic design requirements of premium trains.

For a closer look at ����AV’s solutions for a fully circular future at the CIIE, visit us at booth 3B6-05, at the National Exhibition and Convention Center (Shanghai) from November 5 to 10, 2023.

As automobile technology continues to progress in areas like integration, intelligence, electrification and data connectivity, the importance of displays as an interface for human-vehicle interaction is growing. Manufacturers not only need to ensure the reliability of these displays but offer flexibility in design to accommodate the rapid changes in new energy vehicles. In response, ����AV has teamed up with CTOT, a leading manufacturer of backlight modules, to explore tangible solutions.

Since this year, the partnership has led to the release of Makrofol^® LM807, a high-quality PC light guide plate material designed for vehicle displays. Made with optically graded materials and processed with precision, Makrofol^® PC films demonstrate excellent optical and physical properties along with consistent quality. These features enable light guide plates to accommodate larger and thinner screens. This aligns with the growing trend for expansive displays in electric vehicles, thereby enriching user experiences in both intelligence and entertainment. An initial order of 20 tons of Makrofol^® LM807 has been placed by CTOT.

Enhanced partnership

The latest strategic agreement will further consolidate the partnership between the two companies and expand their joint efforts into high-end industrial control displays. The goal is to provide display module manufacturers with high-performance, flexible, and efficient solutions.

During the signing ceremony, Dr. Caroline Wolff, head of Specialty Films in the Asia-Pacific region at ����AV, said, “����AV is committed to providing high-quality products and continually looks for the best application scenarios. Improving user experience remains a key focus of our efforts at Specialty Films. This partnership marks a comprehensive strategic collaboration in the field of vehicle displays, and we look forward to collaborating with like-minded companies such as CTOT to further industry development.”

Yao Bin, general manager of CTOT said, “CTOT is dedicated to offering clients enhanced experiences and diverse choices. Our partnership with ����AV stands as a model, encouraging the industry towards the adoption of innovative technologies. In collaboration with ����AV, we aim to shape the future of vehicle displays.”

For a closer look at ����AV’s solutions for a fully circular future at the CIIE, visit us at booth 3B6-05, at the National Exhibition and Convention Center (Shanghai) from November 5 to 10, 2023.

The joint lab will mainly focus on the commercialization of low-carbon material solutions in future EV models and the establishment of relevant standards, as well as the development of next-generation smart surface technologies and battery solutions. This initiative builds upon a cooperation agreement signed between the two companies at the CIIE last year.

"We’re delighted to deepen our collaboration with HiPhi," said Dr. Markus Steilemann, CEO of ����AV, during the unveiling ceremony at ����AV’s booth at the CIIE. "We set out to address the key challenges of future mobility with the launch of the joint lab. With our common commitment to pioneering low-carbon smart mobility and by combining our strengths and resources, we believe the lab will accelerate the automotive industry’s transformation towards a smarter and climate-neutral future."

"HiPhi aims to redefine the luxury brand in the new era. We are accelerating the adoption of intelligent and low-carbon technology in smart EVs to provide global users with a safe, efficient and sustainable travel experience, thereby changing the future of mobility and contributing to society," said David Ding, Founder and CEO of HiPhi. “����AV’s advanced material expertise is key to helping us achieve this vision. The establishment of our joint laboratory stems from ����AV’s recognition of the innovative strength represented by HiPhi and other Chinese companies. We also aspire to empower our global partners and foster mutually beneficial relations through the CIIE.”

On display at ����AV’s booth at the CIIE is the HiPhi Y, the latest luxury SUV that incorporates advanced polycarbonate solutions from ����AV, most notably in the headlamp and LiDAR lenses. As EV becomes increasingly smarter, the headlamp presents new opportunities in digital communication beyond lighting. On the HiPhi Y, the headlamp lenses are turned into a projector to display signs and patterns in front of the vehicle, creating an interactive interface with pedestrians and other vehicles. ����AV’s high optical performance Makrolon^® AL solutions offer the needed dimensional stability, UV resistance and high transparency required for this application. In the LiDAR lenses, the Makrolon^® AX portfolio demonstrates superior performance compared to glass, including excellent infrared transmittance, shaping curved surfaces and impact resistance against stone chips. They can also endure the working environment of LiDAR at temperatures from 110 to 115 degrees Celsius for extended periods.

"As the mobility industry embarks on a journey towards carbon neutrality, the demand for circular, low-carbon footprint materials is growing rapidly and will only accelerate in the near future," said Lily Wang, President of the Engineering Plastics segment at ����AV. "We hope to collaborate with more like-minded companies, like HiPhi, to accelerate the decarbonization trend and pioneer smart technology development at the same time."

HiPhi has been a long-term partner of ����AV since 2018. ����AV’s material solutions have been applied to HiPhi’s flagship models, such as the polycarbonate solutions that enable a "smart" B-pillar equipped with complex functions in the all-electric SUV HiPhi X. HiPhi Z, a smart sports sedan, employs polycarbonate grades for the touchpad switch on its steering wheel – enabling a futuristic interactive design – as well as high performance waterborne polyurethane adhesives for auto interiors.

For a closer look at ����AV’s solutions for a fully circular future at the CIIE, visit us at booth 3B6-05, at the National Exhibition and Convention Center (Shanghai) from November 5 to 10, 2023.

Building on a history of success

Huafon has been a long-term customer of ����AV, and their partnership has strengthened, particularly in the field of advancing a circular economy, since ����AV’s inaugural participation in the CIIE in 2021—an annual event dedicated to promoting imports into China and fostering international trade and cooperation.

In 2021, during the CIIE, ����AV announced its first commercial order in the Asia Pacific region for its renewable attributed MDI with Huafon Group. Such MDI is made more sustainable through the utilization of alternative raw materials allocated to products via certified mass balancing according to ISCC PLUS. In 2022, Huafon Microfibre joined ����AV and other value chain partners at the CIIE in two collaborative efforts. These aimed to promote the use of low-carbon PU solutions across industries and accelerate the commercialization of circular material solutions in the furniture industry, setting the stage for even deeper cooperation.

For a closer look at ����AV’s solutions for a fully circular future at the CIIE, visit us at booth 3B6-05, at the National Exhibition and Convention Center (Shanghai) from November 5 to 10, 2023.

“In the face of global challenges such as climate change, innovative materials like plastics are needed more than ever to drive progress towards a truly sustainable future ,” says Dr. Markus Steilemann, CEO of ����AV. “China, with its ambitious climate targets, is a leader in dynamic markets like electric vehicles and renewable energy. We are eager to contribute our material expertise to aid the nation’s transition, while driving fresh business momentum.”

Under the banner of “Becoming Fully Circular and Climate Neutral,” ����AV’s CIIE booth features dedicated areas, including “Beyond Mobility”, “Green Home”, “Renewable Energy” and “Fully Circular”. Several showcases will highlight the pivotal role of sustainable materials in these sectors. Additionally, a dedicated “����AV Story” area shall engage visitors, particularly those outside the chemical industry.

Chemical recycling of polyurethane foams

The “Fully Circular” zone will for example demonstrate advancements in recycling technologies and in the use of alternative raw materials. Notably, it will showcase a recycled foam created through ����AV’s proprietary chemical recycling process. This groundbreaking process is capable of transforming end-of-life mattress foam directly into its core building blocks, breathing new life into old foam.

At the center of “Beyond Mobility” stands Chinese EV maker HiPhi’s latest luxury SUV – the HiPhi Y. It extensively incorporates ����AV’s advanced and sustainable material solutions in interior and exterior components. This includes the use of high optical performance polycarbonate in LiDAR lenses, taking advantage of the material’s temperature resistance up to 115 degrees Celsius along with its excellent infrared transmittance, ensuring the reliable and stable operation of the entire system. The strengthened partnership builds upon a cooperation agreement signed between the two sides at last year’s CIIE.

����AV also aims to foster collaborations for ultra-low energy buildings (ULEB). The company’s materials can support making buildings more energy efficient and causing less emissions – key to the sector, which is one of the major contributors of global emissions. ����AV will for example show polyurethane pultrusion composites for window frames, and highly efficient building insulation solutions at the “Green Home” zone. At this year’s CIIE, the German materials manufacturer will sign agreements with Chinese real estate developers and value chain partners, forming multi-party business collaborations in this vital domain to expedite the adoption of sustainable solutions.

“The CIIE has consistently proven to be a highly rewarding endeavor for ����AV. It offers a unique platform to strengthen partnerships and promote our approach to becoming circular and how we can support downstream industries to do the same,” says Holly Lei, president of ����AV China. “We are committed to delivering versatile solutions and exploring innovative business models in collaboration with value chain partners both within and beyond the CIIE venue, in support of China’s sustainable development.”

The CIIE stands as the world’s first national-level import-themed exhibition, an annual event since 2018. This year, it draws over 3,400 international exhibitors and is expected to host hundreds of thousands of visitors. The CIIE serves as a platform that fosters international procurement, investment promotion, cultural exchange, and open cooperation. China’s ambitious climate goals, including reaching peak carbon emissions by 2030 and attaining carbon neutrality by 2060, carry global significance to meet the Paris’ agreement and remain a consistent focal point in the exhibits and activities at the CIIE.

For a closer look at ����AV’s solutions for a fully circular future at the CIIE, visit us at booth 3B6-05, at the National Exhibition and Convention Center (Shanghai) from November 5 to 10, 2023.

“Again, there was no significant revival of the economic activity in the third quarter, with global demand remaining at a very weak level,” says Dr. Markus Steilemann, CEO of ����AV. “����AV is thus all the more committed to creating the right framework: we are operating efficiently and with a high degree of cost consciousness. We are also investing in the global expansion of our capacities using innovative technologies. We are thus continuing to consistently orient ourselves towards the circular economy and are expanding the foundations for sustainable growth.”&�Բ�����;

Guidance for 2023 narrowed at the lower end of the ranges 

����AV has narrowed its guidance published in April this year at the lower end of the given corridors, in line with the statements made on the half-year report in August 2023. The Group thus anticipates EBITDA of around EUR 1.1 billion and a free operating cash flow of between EUR 0 million and EUR 200 million. ����AV anticipates a ROCE above WACC of around –6.0 percentage points. ����AV’s GHG emissions measured as CO₂ equivalents are projected to still be between 4.2 million metric tons and 4.8 million metric tons.

“����AV is operating in a challenging environment: Economic activity is weak, demand is low and the outlook for our core industries has deteriorated further, with the exception of the automotive industry,” says Christian Baier, CFO of ����AV. “Accordingly, we have narrowed our guidance at the lower end of the given ranges. At the same time, the Group stands on a very stable foundation with a global presence and strong balance sheet. I am therefore very much looking forward to continuing to drive ����AV’s transformation forward.”&�Բ�����;

Christian Baier has been in office as ����AV’s new Chief Financial Officer since the beginning of October 2023. He succeeds Dr. Thomas Toepfer, who left the company as of August 31, 2023. Baier has since been responsible for the areas of Accounting, Controlling, Finance & Insurance, Information Technology & Digitalization, Investor Relations, Law, Intellectual Property & Compliance, Portfolio Development and Taxes. He is also responsible for country-specific topics in the United States and China. 

In addition, the Board of Management decided to terminate the remaining ongoing share buyback program ahead of schedule on October 26, 2023. This decision has been taken due to the current overall situation and the limited time remaining until the end of the program on February 28, 2024 and the authorization of the Annual General Meeting expiring on April 11, 2024. As such, EUR 199 million of the intended EUR 500 million share buyback were executed. ����AV bought back 4.7 million shares with an average price of EUR 42.50 per share. ����AV plans to seek for a renewal of the authorization during the Annual General Meeting in 2024 to continue share buybacks in the future.   

Investment in a sustainable and circular future 

To achieve its vision of becoming fully circular, ����AV is committed to delivering products and solutions that contribute to a more climate-neutral and circular world. One example of that is the new Elastomers plant, which the Group put into operation at its site in Shanghai, China, this August. The new plant is part of a series of investments in high-performance elastomer business made by the company worldwide in recent years. The polyurethane elastomer systems produced there are used, among other things, for applications in the field of renewable energies, such as in manufacturing photovoltaic panels. In addition, they themselves consist partly of alternative raw materials, meaning that they contribute to a more sustainable future in two ways. 

The use of alternative raw materials is one of the cornerstones of the Group’s efforts to become fully circular. To be able to further explore and expand this field, ����AV is also committed to dovetailing its financing and sustainability strategies to a greater extent. As part of that, the Group issued a green bond for the first time in November 2022. A move that has already produced a positive impact: after just the first year of the total six-year term, the funds raised were already used in full in sustainable expenditures and projects. Around 34 percent of the issuing proceeds were used, for example, to expand alternative raw materials, resulting in a reduction of 250 kt of CO₂ equivalents. 

A further focus on the path toward a circular economy is the recycling of used plastics. ����AV has also made further progress in this area, announcing this August that it had achieved a major milestone by developing an innovative process for the chemical recycling of polycarbonates. The Group is now commencing technical implementation of chemical recycling on a pilot scale at its site in Leverkusen, Germany, and will invest millions of euros into it over the next few years. 

Economic weakness weighs on both segments; lower fixed costs have positive impact 

The selling price level and volumes sold at both of the Group’s segments declined in the third quarter, particularly in the EMLA region. Nevertheless, the Group’s strong focus on efficiency as part of implementation of its Sustainable Future strategy had an impact. In the third quarter, fixed costs were again reduced by a high double-digit million euro amount compared to the previous year. For the year as a whole, ����AV expects lower fixed costs in the mid three-digit million euro range compared to the prior-year period. 

Sales in the Performance Materials segment were down 26.7% to EUR 1.7 billion (previous year: EUR 2.3 billion) in the third quarter of 2023, in particular due to considerably lower average selling prices. The segment’s EBITDA increased by 60.4 percent year over year to EUR 85 million (previous year: EUR 53 million), mainly because of higher margins and lower fixed costs. The free operating cash flow rose to EUR 317 million (previous year: EUR 93 million). 

The Solutions & Specialties segment registered a 17.6 percent decrease in sales to EUR 1.8 billion in the third quarter of 2023 (previous year: EUR 2.2 billion). That was mainly attributable to a decline in average selling prices due to weak demand worldwide, exchange rate movements and a fall in volumes sold. The segment’s EBITDA fell by 12.1 percent year over year to EUR 246 million (previous year: EUR 280 million), but has shown a steady, sequential increase since the fourth quarter of 2022. The segment’s free operating cash flow improved to EUR 185 million (previous year: EUR 65 million). 

Results in the first nine months of 2023 below previous year; significant increase in FOCF

The Group’s sales in the first nine months of the year fell by 21.2 percent to EUR 11 billion (previous year: EUR 14 billion). Weak economic activity and low global demand throughout the year resulted in a lower average selling price level and lower volumes sold overall. ����AV’s EBITDA in the first nine months of 2023 declined by 42.7 percent to EUR 948 million (previous year: EUR 1.7 billion), while net income fell to EUR –11 million. However, the FOCF rose to EUR 159 million (previous year: EUR –412 million), in particular due to higher cash flows from operating activities. Less cash tied up in working capital, mainly due to the development of inventories, and lower income tax payments more than compensated for the drop in EBITDA. 

"The launch of our MCR production line marks another significant stride in our journey towards achieving a circular economy and operational climate neutrality by 2035," said Sucheta Govil, Chief Commercial Officer of ����AV. "Plastic waste recycling is pivotal in realizing this vision, and through the expansion of our recycled plastics production capacity, we aim to lead the way in driving sustainability across diverse industries."

����AV is committed to supplying over 60,000 tons of recycled-content polycarbonates annually in the Asia Pacific region by 2026, in response to robust market demand. Recently, the company also transformed an existing compounding line at its Map Ta Phut site in Thailand for mechanically recycled polycarbonate.

"These investments enable us to meet the rising demand for PCR polycarbonates, enhancing our capacity and efficiency. With new or repurposed capacity now operational, we are better positioned to assist our downstream customers in their journey towards more sustainable products, expediting the transformation of industries towards a circular and climate-neutral future," said Lily Wang, Head of ����AV’s Business Entity Engineering Plastics.

A broad range of PCR portfolio

The demand for such materials is surging on a global scale, driven by regulatory initiatives like the European Union’s proposed Directive on end-of-life vehicles (ELV Directive), which sets strict benchmarks for the utilization of recycled plastics. Furthermore, industries like consumer electronics are poised for increased demand for recycled materials, especially those with a substantial recycled content.

These market dynamics underscore the significance of ����AV’s recent developments in providing PCR polycarbonates. Earlier this year, the company unveiled a polycarbonate boasting 90 percent recycled content. This grade not only attains outstanding whiteness and highly saturated colors but also touts a sustainable feature – a 70 percent reduction in carbon footprint compared to its fossil-based virgin plastic counterpart. Achieving this remarkable accomplishment requires a meticulous selection of high-quality recycled materials and precise optimization of material composition during the compounding process.

Furthermore, ����AV is actively engaged in pioneering the chemical recycling of polycarbonates. Having successfully developed an innovative process within the laboratory, the company is now embarking on the technical implementation of this breakthrough at a pilot scale.

Expansion of polycarbonate production capacity in Asia Pacific

After debottlenecking multiple production lines at the Map Ta Phut site in Thailand, ����AV is nearing the final stages of a program to enhance polycarbonate production capacity and capabilities across the Asia-Pacific region. This program also includes the addition of new production lines at sites in Shanghai and Guangzhou, China, as well as Greater Noida, India, in recent times. The combined additional capacity now exceeds 100,000 metric tons annually. These strategic projects, aimed at optimizing the regional production network, have been supported by using digital tools, which also reduced investment costs.

"In this way, we aim not only to meet the growing demand for polycarbonate in Asia, but also to offer our customers there an improved product quality," says Dr. Nicolas Stoeckel, Head of Operations in the Business Entity Engineering Plastics. "Depending on demand, the upgrades can be used for compounding recycled or conventionally produced polycarbonate." Therefore, both projects are also about improving ����AV´s ability to produce more plastics with higher recycled content.
 

TPU is a versatile plastic material used in a variety of applications such as sports shoes, IT devices such as sweepers, smart speakers, phone cases, automotive applications like paint protection film or for the protection of wind turbine blades.

"We are excited to announce that the construction on our new TPU site commences. It shows our commitment to strengthen our production network for our Solutions & Specialties business entities overall and for the TPU business in particular,” said Dr. Andrea Maier-Richter, Head of TPU at ����AV. “It reinforces our position as one of the leading global suppliers of TPU and puts us right where important value chains are."

Once completed, the site will span across 45,000 square meters. With its potential maximum capacity of up to 120,000 tons it will then also be ����AV’s largest TPU site worldwide.

"We are committed to working closely with our customers and partners," said Lisa Ketelsen, Head of TPU in APAC at ����AV. “As Guangdong province is a major hub for the IT, consumer electronics, footwear and other industries, we believe that locating our production in close proximity enables us to collaborate optimally. To underline that, an innovation center will be part of the next phase of our investment, enabling our researchers to design customized material formulas and do formula adjustments to meet customer demands within very short cycles.”

The new TPU site will enable ����AV to provide high-performance yet sustainable solutions to its customers faster and more flexibly. At the new site in Zhuhai, ����AV shall to that end eventually offer products with the label “CQ”. Products labelled as such consist of at least 25 percent alternative, non-fossil raw materials. The site will also utilize the most advanced production technologies and be run on 100 percent renewable power.

“Together with recent investments in new plants for Elastomers, Polyurethane Dispersions and a production line for the mechanical recycling of polycarbonates in our site on the outskirts of Shanghai, this new site for TPU in southern China shall capture the robust growth of the core industries served by our Solutions & Specialties business entities in China, the region and worldwide,” said Holly Lei, President of ����AV in China.

Offering sustainable and ever more circular solutions are among the long-term core targets for ����AV overall and for the new TPU site. The company for that purpose in general works on broadening the raw material base for its products, using ever less crude oil and its derivatives. It works on using recycled materials and can also already offer core materials with attributed alternative raw materials (such as biomass) via the . Besides using less fossil-based raw materials, the company also want to use clean energy sources to run its plants and manufacturing processes and aims at becoming operationally climate neutral by 2035. By the end of 2023, it expects to already cover 16 to 18 percent of its energy demand from renewable sources.