Issue Date: February 14, 2011
Clariant has experienced a rough few years that included multiple layoffs, site closures, and leadership shuffles. As the Swiss company emerges from the recession with others in the European chemical industry, it is eager to define a successful path forward.
Thanks in part to the restructuring it did, the company showed consistent financial improvement throughout 2010. Full-year results will be announced this week, and analysts are expecting good news. Consensus estimates for 2010 net income from continuing operations are about $170 million, compared with a loss of $220 million in 2009.
Clariant is now organized into 10 market-focused business units—previously it had four large businesses—and it has consolidated corporate operations in Pratteln, Switzerland. Additionally, the firm bundled its research activities into five technology-focused groups that support all of its businesses.
After a period of downsizing, the company took a significant step with its renewed focus on research. Now, it’s taking a second big step with a $75 million investment in the Clariant Innovation Center, a new technical center that will become its global R&D headquarters. The specialty chemical company has high expectations that scientists working in the custom-designed building will be inspired to collaborate and create innovative new products.
“R&D will be the basis for future profitable growth at Clariant,” Chief Technology Officer Martin Vollmer asserts as he discusses plans for the innovation center. “After hard and deep restructuring, we now have a new organization in place, and we will reshape our R&D portfolio.”
Vollmer himself is part of the management change; he joined the company in January 2010 after 11 years with Bayer. Following roles there in research, planning, and development for intermediate and specialty chemicals, he was approached by Clariant managers about being part of the effort to reshape their company. Vollmer is part of a leadership team that was revamped frequently in recent years, including three chief executive officers between 2003 and 2008 (C&EN, March 30, 2009, page 20). The current CEO, Hariolf Kottmann, in place since October 2008, led the latest round of restructuring.
In his new role, Vollmer reorganized Clariant’s research effort into an organization the firm calls group technology services. It includes the R&D groups, manufacturing process development, intellectual property management, and new business development.
“Bundling the R&D creates critical mass, bringing the expertise together to come up with new ideas,” Vollmer says. And the inclusion of business development in his organization, instead of with the business units themselves, is critical to keeping research efforts relevant, he notes. “I fully believe that the advantage will be to shorten the time to market.”
Most of Vollmer’s technology services group will be housed in the innovation center when it is completed at the end of 2012. The company expects to break ground this summer at a former Hoechst industrial park in Frankfurt. Clariant has roots in the former chemical giant, having acquired its specialty chemical business in 1997.
In addition to the five global R&D centers—colorants, surfactants, specialty polymers, effect chemicals and intermediates, and formulation technology—the new site will consolidate other Clariant activities in the Frankfurt area and shift some from Swiss locations. Employees from the application development departments of four business units, the intellectual property group, and the analytical department will relocate to the building. In total, about 500 employees will occupy the new site, one-third of whom will be focused on basic research.
The center was designed by the architectural firm Hentrich-Petschnigg & Partner, which emerged with the winning structure after a competition with 10 other firms. HPP Partner Werner Sübai says he focused on Clariant’s expressed need for interaction, designing a work environment “that is driven by spacious quality, by transparency, by bold space, and by mutual communication areas.”
The center will include three interconnected structures, each arranged around a large, open atrium, with offices and laboratories along the outer walls. “The center of each building should be a melting point functionally and visually,” Sübai continues, likening the central space to a kind of living room for scientists. “These open spaces will support communication and interaction throughout the building.”
The three structures will be linked by multilevel walkways that provide a flow that unifies the 29,500-m2 building. Additionally, the multilayer façade will be constructed with novel materials and coatings so it appears white from the outside but is transparent from the inside. The glass layers of the façade will have sun-shading and a high insulation value for temperature control, thus integrating the green building requirements for German construction.
The use of natural light will continue with elliptical skylights in each atrium and clear walls throughout most of the structure. “We made the walls of the laboratories and offices transparent so we have visual contact between the office and laboratories, and communication through the whole building will be generated,” Sübai notes.
Vollmer is quick to point out that this transparency also will be reflected in a new openness with customers and academic and industrial partners.
It is the interaction with customers that is particularly important for Clariant in renewing its product portfolio. The building will have a display lab in the main entrance to demonstrate new products and technologies, and Vollmer anticipates that scientists from customer companies will spend time at the innovation center working alongside Clariant employees. “This interaction along the value chain is key,” he stresses.
Others in the chemical enterprise are using the idea of open structures to facilitate product development. Novartis launched its Labs of the Future concept in 2009 and opened its first such laboratory at its Basel, Switzerland, headquarters in June 2010. Ulf Korthäuer, research planning director for Novartis, says the new design concept addresses barriers that were slowing the creative process. “We want to unleash more synergy and creativity,” he explains. “New ideas are often generated when people from different backgrounds come together.”
Integrating collaborative space in building design is an emerging trend, according to global architectural firm Perkins Will. Its 2010 review of workplace trends highlighted “collaboration and socialization” as behaviors that can be enhanced by design. The report noted that “employees are more committed to the organization when social networks are strong. Also, research shows that social networks positively correlate to performance. Spaces that embody both, and that are coupled with programs to encourage both, provide measurable return on investment.”
Daniel D. Watch, market director for science and technology at Perkins Will, is the author of the book “Building Type Basics for Research Laboratories,” which details design considerations for research environments. He notes that “modern science is an intensely social activity” and that buildings need to provide for that interaction.
Watch adds that multiple social spaces work best. “People need different environments to be most efficient,” he says. “They need to tuck away somewhere to focus and also have various spaces for collaboration.” He highlights the importance of a variety of conference rooms, eating spaces, and even exercise space to stimulate creativity.
Clariant and HPP representatives are now actively engaged in workshops to integrate specific research needs into the interior layout of the building in advance of construction. Already, input from these sessions has convinced the building committee to shift its plan from isolating research, application, and support functions in separate sections to fully integrating them throughout the building, allowing the open spaces and walkways to provide links for work groups.
Once the building is complete, Vollmer’s challenge will be to reengage technical employees after the turbulence of the restructuring period. Clariant laid off about 2,500 employees in 2009 and another 500 in 2010; current staffing stands at about 17,000. Additionally, the company announced last fall that its textile business unit will shift operations to Singapore by 2013. In all, more than 20 research, production, and administration sites will be closed through 2013 as part of the restructuring process.
Investment analysts have been impressed with the restructuring activities thus far. Their multiple “buy” recommendations have helped the company’s stock price grow to four times its low near $4.00 per share in early 2009. But stock markets typically want quick hits and are seldom patient enough to let R&D projects develop.
To help chart progress on research efforts, Vollmer is working on a series of reporting metrics. Although he has yet to set specific targets, he expects that the metrics will include time-to-market for new products, percentage of new products in total company sales, and ratio of patent-protected to total sales as means to quantify the value of Clariant’s patent portfolio. Clarifying and then achieving these targets will be an important aspect of the new research world he is working to establish.
The building is only one tool in this effort, but it’s an important one. “The new innovation center clearly creates framework,” Vollmer says. “It is one piece to drive innovation and to further develop the product portfolio.”
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