Masterbatches are adding color and functionality to plastics and, thus, help enhance the market appeal or the end-use performance of plastic products, packaging or fibers. The business unit Masterbatches of Swiss specialty chemical manufacturer Clariant is a recognized global leader in color and additive concentrates and performance solutions for plastics. CHEManager Europe asked Hans Bohnen, head of Clariant's Masterbatches business unit about the BU's business situation and growth strategy.

CHEManager Europe: Mr. Bohnen, 2013 is now well underway. How did Clariant's Masterbatches business perform in the last year, what is your outlook for 2013?

H. Bohnen: We can definitely see the negative impact of the continuing economic slowdown in Europe, especially in the southern economies. While Germany was somehow sheltered in the first half of 2012, we did see the first indications of a slow-down in the second half. It is difficult to make a projection for the full year. Following a weaker December we saw a rebound in January and we expect sales on a level comparable to last year. In 2010, we developed a clear strategy for profitable growth. 2012 was another year in which we successfully continued our execution. In 2013 we do not expect a significant recovery in our industry. Especially Europe will at best stabilize on a low level. We are investing in growth in emerging markets and we believe that we can already capture some of this in 2013. We are convinced that we can further deliver on our profitable growth aspiration for the business unit.

 Where and how is Masterbatches looking to support its customers most in the coming year?

H. Bohnen: Our customers will benefit through an even stronger footprint and improved services. This new approach towards innovation leads into a solid innovation pipeline, further enhanced capabilities and resources. Clariant is continuing to strengthen on-the-ground technical and product support for customers across the globe. Back in 2011, we introduced a new Masterbatches BU strategy for profitable growth based on four key elements, with the goal to create products and service value by meeting customers' needs. The changes have been implemented within our operations. Therefore we are beginning to see a more efficient and focused organization. This will enable us to improve the levels of service and innovation we can offer to our customers and allow us to concentrate on those innovation-driven markets where demand for support is strong.

You mentioned a "strategy based on four key elements". Can you explain this?

H. Bohnen: The four elements embrace growth via regional initiatives, a focus on the most attractive market segments, implementation of an industry-leading operational model, and building the next level of innovation. Our goal is to create products and services value by meeting customers' needs, and a focus on these four elements will help us attain this.

The strategy principally involves investment initiatives, be it investment in strategic sites, in operations, or innovation-related investments in all global regions, and realigning our way of thinking to ensure we truly appreciate and respond to the unmet needs of our customers and markets. This means extending our infrastructure through upgrades, capacity expansions or investment in new sites, implementing efforts to improve the efficiency of internal operations, and focusing our innovation, processes and services on fields and markets where we can deliver maximum value.

Every change we initiate internally must lead to an improvement for the customer. We do not change for the sake of change but to meet and exceed our customers' expectations.

How does this strategy tie-in with Clariant's corporate Performance.People.Planet values unveiled last year?

H. Bohnen: Appreciating the needs of our customers is fundamental to realizing Clariant's corporate commitment to deliver added value for our stakeholders and partners, and become the global leader in specialty chemicals. The Performance.People.Planet values are an integral part of this approach, at the heart of our actions and defining our corporate culture. They describe the way we do business and the values that are our top priority in our interaction with others.

These values are therefore at the center of our BU strategy. We are only successful if our customers enjoy success; therefore we strive to offer them innovative, customized solutions focused on improving performance

What will the Masterbatches strategy mean in reality to your customers? What direct benefits will they experience?

H. Bohnen: Through our strategy we want to create added value, addressing significant unmet customer and market needs as a key part. In order to achieve this, Clariant has invested more than CHF 60 million to improve access to local supply and on-the-ground support for customers in the emerging markets of Asia, Latin America, India and the Middle East as well as in Europe and North America during the last 2 years. One recent example is the construction of our new site in Indonesia which will go on stream by the end of this year. Furthermore, we have invested CHF 14 million in a new plant in Poland to improve capacity, capability and flexibility in order to meet local customer demand in Central and Eastern Europe. In addition, we have expanded our sites in Russia, Saudi Arabia, Mexico and Pakistan in 2012 and will continue to do so. Further investments into regional expansion will be communicated shortly. This is just a snapshot of our ongoing program to improve support for customers at a local-level.

The changes to our operating model will be felt by customers as we enhance products and services we offer customers. For example, developments have been made in creating a robust supply chain system for North America and in Europe that will lead to improved on-time and in-full delivery of Clariant Masterbatches. Clariant is also continually driving improvements in areas such as complaint handling, lead-time and quality levels at all sites.

Our global footprint and global standards are 2 clear assets we are able to offer our customers. Our global key account and product management organization ensures implementation of best practices, highest standards and latest developments on a global base. Think global and act local is our strength.

Through our ongoing commitment to innovation we will bring to market products that support our customers in the challenges they face - the need for differentiation, to be more efficient yet still cutting-edge, to fulfill tightening market regulations, and be environmentally-considerate.

You mentioned "Building the next level of innovation" as one of the four strategic key elements. What is meant by this?

H. Bohnen: We recognize that Clariant will need to reach beyond its current portfolio in order to create maximum value and address the significant unmet customer and market needs that exist. Under the focus topic "Build the Next Level of Innovation" Clariant is committed to go beyond its current portfolio to ensure the sustainability of the Masterbatches innovation pipeline. The BU is engaged in long-term projects and breakthrough developments and in doing so, is partnering with customers, suppliers, leading institutes and universities to make sure promising ideas reach market maturity and are converted into real value for customers.

During 2013, we will strengthen our innovation activities through the addition of further dedicated personnel and equipment to help solve identified challenges, focusing on sectors such as packaging, medical, energy and construction. Resources will be focused in strategic locations globally, ensuring continuous innovation processes and strong interfaces with key partners.

Medical is one segment where Clariant has taken a sector-dedicated approach. Will this approach be extended to other market segments during this year?

H. Bohnen: Within Clariant's focus on supporting specific market segments, the organization is well prepared and positioned to face medical and pharmaceutical customer demands. Our medical segment has a high demand on GMP and product stewardship. This is why we work with a sector-dedicated approach. The fast growth we enjoy for this segment shows that this was the right decision.

But within the Masterbatches BU we have installed dedicated teams for each segment, not just medical, to enable us to meet all possible requirements on the customer side efficiently and effectively.