Ciba Specialty's CEO Outlines Specialty Chemical Growth Strategy
In the specialty chemical industry, partly because of environmental considerations, "there are a number of older products in the market that don't have the right profile any more," noted Meyer. "That is not only an issue but a great opportunity to come in with innovative new products."
Ciba Specialty Chemicals has expanded the traditional model of selling specialty chemicals to one focused on value beyond chemistry—creating high value-added specialty "effects" in industrial and consumer goods. "We have expanded that model and are starting to think about the value chain in a much more comprehensive way," said Meyer. "We try to clearly understand where the special effect is desired in the value chain, where those decisions are made and who will be the ultimate end user beneficiary."
Ciba uses an effective combination of "push" and "pull" innovation to develop and market new products. The pull (market based) approach involves developing business units with an industry focus, linking product development to industry marketing and engaging in cooperative development programs between the company and customers. Key effects provided by Ciba's products to customers involve color, strength, performance, and protection.
"One key element is to be focused on the industry sector where business units clearly understand those industries and applications," Meyer noted. "Therefore, the business units can be effective partners with those customers and immediately add value."
Ciba has developed strong links with end use industries such as automotive, carpet, plastics, and consumer care. The company has worked closely with the automotive industry to develop environmentally friendly solvent-free powder coatings. "These were new products partially based on new chemistries that have been very tightly co-developed down the value chain with the end users," said Meyer.
The "push" (technology-based) approach involves developing new technology platforms, licensing-in, technology scouting, R&D alliances, and sharing technologies across business units. Ciba's core technologies include catalysis, photo chemistry/photo physics, colloid chemistry/physics, and specialty polymers.
Ciba Specialty spends approximately 3.5% of annual sales on R&D and derives over 25% of its sales from products developed in the past 5 years.
Ciba will target two-thirds of total R&D and capital spending towards its five high growth potential platforms: polymer additives, imaging and coatings additives, water treatment, home and personal care, and colors (inks, paints, plastics). The other third will be targeted towards lubricant additives, paper chemicals, textile chemicals, and colors for textiles.