Silicone maker ready to fill openings as building demand heats up

The Chinese government's continuing urban development drive is bringing an especially warm feeling to the many companies involved in building design and construction.

With an emphasis on energy-efficient buildings, this green initiative puts some, such as US-based silicone maker Dow Corning, in an envious position.

With 40 years experience in China, notably including its involvement in building the enviable New Beijing Poly Plaza and integrated photovoltaic curtain walls for the China Pavilion and Art Performance Center at the 2012 Shanghai World Expo, Dow Corning is looking a bright prospect for many more contracts in an increasingly energy and environment-conscious China.

"The reality is that in the Chinese construction industry, the average life of a building is short, and some materials are not good for the environment," says Jeremy Burks, president of Dow Corning Greater China.

"The energy efficiency of buildings needs to be improved. That is consistent with the government direction as it will create a longer term of value."

Unlike in the US or Europe where there is low demand for new buildings, large-scale urbanization is still taking place in China.

"With increasing amounts of buildings being built, the opportunity to do the business is here," Burks says.

From 2008 to 2012, China built more than 18 million new affordable housing units and rebuilt more than 12 million in shanty areas. By the end of 2012, China had provided housing for 31 million urban families, or about 12.5 percent of total urban households.

"Many people are moving to cities, and buildings should be more efficient," Burks says.

In improving the quality and efficiency of buildings, Dow Corning's silicone structural glazing can solve one of the biggest concerns for architects and designers - the heating and cooling system.

"On the glazing glass of building, the kind of advantage our products bring is that we are able to achieve insulation benefits, which can basically stop the heat getting out and in. Therefore, it will be easier to manage the temperature of a building, and there will be a much lower demand on either cooling or heating," Burks says.

However, the silicone maker is not sitting back and resting on its achievements in technology. It sees innovation as vital for success.

Vacuum-insulated paneling is the latest technology that the company is developing.

"The big trend is the ability to insulate very thin and durable material. It will bring some flexibility in the design of some components, including the windows," Burks says.

VIP can also reduce the space that is needed for insulation. In tall buildings where space is precious, it will be saved, and the amount of heat lost will be reduced.

"We are talking with architects and building designers, allowing them to use their creativity and imagination to see what our products can do."

But Burks also realizes that many of the millions of buildings in China cannot be rebuilt or redesigned.

"We are looking at where we can play, where there are potential opportunities," he says.

This year also marks the 40th year of operation of Dow Corning China. Although the company does not break down performance into areas in its annual report, Burks says the special thing about China is that it is big and fast growing.

"We have about 12,000 employees around the world, and 1,700 of them are in China. I think this explains the importance of China to us."

Dow Corning recorded sales of $1.26 billion and net income of $62.1 million for the first quarter of 2013. Its sales were down 17 percent and adjusted net income dropped 6 percent compared with 2012.

"Significant oversupply and high raw materials costs continued to challenge the performance of our silicones segment in the first quarter," notes its financial report issued on May 1 on worldwide operations.

"Consistent with our strategy, we are beginning to see opportunities with a number of the high-value, differentiated products we've developed alongside our customers. However, those opportunities are not sufficient to make up for the broader pricing pressure in the silicones segment."

The Chinese market too is affected by the fall in demand for polysilicone, and the photovoltaic industry is going through a gloomy patch and suffering low profit margins.

"The situation in the PV industry is pretty cold, but we still have a strong belief in solar power," Burks says.

"Manufacturing in China is trading up, creating more demand for our different types of materials, and that opens up more opportunities for us."

Contact the writers at yaojing@chinadaily.com.cn and mengjing@chinadaily.com.cn

(China Daily European Weekly 06/14/2013 page15)