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Home > Reports > Annual Report 2019 > Analysis > Specialties

SPECIALTIES

The Specialties business creates value by pushing the boundaries of our materials’ physical properties to address important and highly complex thermal, mechanical, optical and electrical performance requirements: our customers’ most difficult – and often one-of-a-kind – challenges.

Specialties’ ‘Growing Unique’ strategy, centered on innovation and customization and geared to achieving a leadership position among global peers, continued to build momentum in 2019, with its unerring focus on one key driver: generating value for customers.

Key to this strategy, and to future organic and inorganic development, is establishing Specialties as a stand-alone organization, with its own financials and assets. Progress has been strong, with completion anticipated for 2020, set to bring financial transparency, increased agility, and an ever-deeper focus on customer-centricity.

NON - FINANCIAL HIGHLIGHTS

Specialties sales volume also decreased due to the trade tensions between the US and China, which led to a slowdown in the major industries that use specialty products, such as automotive, electronics, and electric appliances. This led to a change in the behavior of consumers who began buying on-demand that resulted in decreased sales.

Non-Financial Metrics

Production volume

Thousand MT
  • 2019
  • 2018
2019 2018
Specialties SBU* 106 120

Sales volume

Thousand MT
  • 2019
  • 2018
2019 2018
Specialties SBU* 270 296
* Some of the Specialties products were commodities and moved to Petrochemicals SBU.

OPERATING HIGHLIGHTS

2019 saw Specialties continue to focus on creating value for our customers by helping them solve their most challenging problems, through our expertise in materials, engineering and service, global reach and a personal, collaborative approach.

As a business focused on helping customers address the challenges and seize the opportunities of the fourth industrial revolution – artificial intelligence, renewable energy and electric transportation, 5G communications, smart electronics, healthcare and robotics – a clear grasp of our customers’ perspectives and needs is crucial.

Recent proprietary research highlighted customers’ enthusiasm for personal interaction, notwithstanding the proliferation of online information. Sparked by a significant anniversary of the launch of LNP™ product line, we organized technical summits in 19 major centers throughout Asia-Pacific, the United States and Europe, where more than 2,300 customers joined us to learn more about our innovations, material capabilities, application design and processing best practices.

In 2019, Specialties also increased its focus on customer service, not least by extending its distribution network. Already strong in Asia and Europe, the emphasis for 2019 was on North America. Two new distributors now augment our in-house reach in the US, Canada and Mexico, with the product knowledge, application design, technical expertise and materials access to support customers in key industries.

Increased production also aids our customers’ speed to market. Recommissioning of the PPE (polyphenylene ether) plant in Bergen op Zoom, the Netherlands, with go-live planned for 2020, should boost global NORYL™ resin supply by 40%. Construction has also begun on a new ULTEM™ resin facility in Benoi, Singapore, scheduled for completion by 2021, and improving access for our customers in Asia.

Specialties’ portfolio of flagship products – NORYL™, ULTEM™, EXTEM™ and SILTEM™ resins, a vast range of LNP™ compounds and copolymers, and a variety of thermosets and additives – helps meet complex thermal, mechanical, optical and electrical performance and sustainability requirements.

Specialties has also been hard at work developing new ways to help our customers meet the demands of the circular economy. LNPTM ELCRIN™ iQ polybutylene terephthalate (PBT) compounded resins, produced from recycled polyethylene terephthalate (rPET) waste, reduce cradle-to-gate environmental footprint compared with virgin PBT resin, as assessed by both cumulative energy demand and global warming potential.

The introduction of 5G infrastructure and the burgeoning growth of 5G-compatible devices is another major driver. Sales of NORYL™ oligomers, a key component in new circuit board products for high-speed servers, base stations and wireless antennae, are up 130% year on year. Significant capacity expansions initiated in 2019 are set to be increased in 2020 and beyond, as global 5G rollouts continue to expand.

Advanced Driver Assistance Systems (ADAS) for conventional and autonomous vehicles are bringing a host of opportunities across the Specialties portfolio. ADAS rely on cameras, radar, LiDAR (Light Detection and Ranging) and other sensing systems, each with its own performance challenges.

For camera lenses, barrels and spacers, ULTEM™ resins offer infrared transparency, and heat and chemical resistance; NORYL™ resins’ dimensional stability and low moisture uptake make them ideal for protective covers; and LNP™ compounds bring key attributes such as EMI (electro-magnetic-interference) shielding, thermal management, and rigidity.

ADAS radar systems, which enable features such as adaptive cruise control, autonomous emergency braking and forward collision warning, need multi-component devices with a range of capabilities, from EMI shielding to impact protection, radar absorption to radar transparency. PCB antennas and control chips use NORYL™ SA resin, an oligomer that provides low dielectric loss, while back covers benefit from NORYL™ and LNP™ compounds’ rigidity, moisture resistance and thermal management.

LiDAR systems which can be built into vehicles’ front and rear fascias, or within the headlights, demand durability and optical clarity. Specialties materials offer greater design freedom, environmental resistance and infrared transparency than conventional glass and epoxy, as well as assembly efficiency advantages.

The Internet of Things and the increasing trend toward real time communications demand data speed, density and low latency; the electronics industry is forecasting demand for sensor and lens units running at millions per week. ULTEM™ and EXTEM™ resins are ideally positioned to address the need. Zemax, the software standard for optical systems design, added four Specialties materials to their OpticStudio® tool database, as used by designers for analysis, simulation and optimization of prospective components and systems, helping them fully understand SABIC thermoplastic optical materials’ capabilities. The ULTEM™ resin, EXTEM™ resin, and two grades of LEXAN™ CXT high-temperature copolymer, offer options with tangible advantages over traditional glass and epoxies.

LOOKING AHEAD

SABIC’s business plans for Specialties reflect its strategic importance, and will move the unit toward a multisector industry profile. Organically, the business will continue to focus on new opportunities in fast-growing and disruptive end-markets such as smart electronics, autonomous transportation, renewable energy and energy storage, robotics and artificial intelligence. Meeting its growth mandate will also demand inorganic additions to the portfolio; the prime focus will be on companies with clearly defined advantage-based technologies. Both organic and inorganic growth will be grounded in more efficient uses of natural resources and the minimization of environmental impacts in order to achieve enhanced sustainability objectives.

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