– Business review – Chemtech

Profitability at record 10%, Renewables orders almost doubled

Note: If not otherwise indicated, changes from the previous year are based on currency-adjusted figures.

In 2021, orders in the Chemtech division increased by a significant 8.8%, driven by strong activity in Chemicals and our Renewables business, which almost doubled. Sales saw a similar rise of 8.4%, with almost all of Chemtech’s businesses contributing to the increase. Operational profitability reached 10%, a new record for the division. The Chemtech division continues to expand its offering in Renewables and a diverse range of circular solutions.

Fast-growing Renewables business

In 2021, Chemtech reached further milestones in its development of highly innovative and sustainable solutions that are helping companies and industries worldwide to reduce emissions and waste through the circular economy, carbon capture and storage, renewable fuels and materials and more. Successes in 2021 included developing a new method to recycle ocean-bound plastic waste for Tide Ocean S.A., and enabling Arbaflame to produce 70’000 tonnes of biomass-based combustible pellets per year — a carbon-neutral source of clean power that can be used to substitute coal in power plants. You can also discover in this report how Chemtech’s technology is central to most production facilities for degradable PLA bioplastics worldwide, with two more significant orders in 2021 for large-scale PLA plants that will produce over 100’000 tons per year.

The division is experiencing strong demand across its Renewables businesses, with orders, sales and profitability significantly up in 2021 compared to the previous year. The renewables market is growing fast and continuously gaining momentum as the world accelerates its shift towards sustainable and circular solutions, and Renewables now account for 13.6% of Chemtech’s total business in 2021. We continue to drive innovation in bio-based polymers, sustainable fuels and chemicals as well as the recycling of polymers, and are perfectly positioned to capture significant growth opportunities in these important and attractive markets.

In 2021, we also saw continued growth in the chemicals market across the world, with particularly strong demand in China. This was partly driven by a shift from gas and refining to chemicals, where Chemtech is well positioned with its current offerings and status as global market leader.

The Chemtech division achieved exceptional results in 2021 — significant rises in orders and sales as well as record profitability. Our transition to Renewables is well underway — we are the market leader for the production technology of PLA, and with our innovation pipeline we are perfectly placed to capture growth opportunities across the Renewables market.”

Torsten WintergersteDivision President Chemtech

Key figures Chemtech

Strong order growth

In 2021, Chemtech’s orders increased significantly by 8.8% (both FX adjusted and organically). The increase was driven in large part by Renewables, which almost doubled, and continued growth in Chemicals. Regionally, the division saw particularly strong activity in China and the Americas, as our customers ramped up their operations over the course of 2021, recovering from the impacts of lockdowns.

Significantly rising sales and record profitability

Thanks to strong execution, we were able to achieve solid sales growth of 8.4%. We saw some project delays due to global supply chain disruptions, but these were more than offset by continued strong performance in China. Chemtech’s operational profitability reached a new high of 10%, driven by the notable increase in volumes as well as good cost management. 

Safety performance in 2021

Chemtech’s accident frequency rate (AFR) remained stable at a very low 0.7 cases per million working hours, thanks to our maintaining the EYE 5 methodology to assess our process risks, executing Safety Through Observation Process (STOP) assessments, our Machine Safeguarding Awareness campaign and enhancing our Confined Spaces training. The accident severity rate (ASR) decreased to 17 lost days per million working hours, from 27.3 the year before.

In addition, significant work has been done to learn from the various health and safety audits performed in the division, leading to increased audit action closure rates. This allows us to tackle the root causes of any potential future incidents. A new initiative, Dispensation Tool, was launched in 2021 to support workers on Tower Field Services’ various sites in implementing the Sulzer health and safety rules and generate management engagement when site conditions deviate from the requirements.

Abbreviations

EBIT: Earnings before interest and taxes

For the definition of the alternative performance measures, please refer to “Supplementary information”.

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