Resource scarcity, the fight against climate change, soaring consumption in high-growth parts of the world, and new demands for environmental care, health and well-being are the megatrends that influence the main themes of Solvay R&I.

80%

Of R&I expected revenue in Sustainable Solution

€ 325

R&I efforts

2,100

R&I staff

284

Patents

18%

New sales ratio

Definition

Research and Innovation (R&I) policy strongly supports Solvay’s ambition to grow profitably while reducing its environmental footprint and increasing the proportion of its revenue that meets the challenges of sustainable development. Global Business Units (GBUs) and Functions are working together in a cross-functional approach to provide customers with significant added value through innovative and competitive solutions tailored to the present and future needs of end-users.

Management approach

Innovation levers driving Solvay Research and Innovation efforts

  • A process of innovation excellence to improve efficiency and shorten time to market: this process was launched in 2014 and has been rolled out in all GBUs throughout the Group; it covers all aspects of the innovation process, from ideation and market validation all the way to scale-up and intellectual property protection.
  • An extended network of open innovation through partnerships with academics and key market players to maximize efficiency and tap into the creativity and competencies of the outside world.
  • Investments in start-ups and venture capital funds that allow Solvay to develop partnerships for accelerating developments in strategic areas.

The Group has also dedicated 17% of its total R&I efforts to corporate activities, with the clear intention to maintain a healthy portfolio of adjacent and breakthrough projects aimed at either building know-how and competencies in emerging technologies or at developing diversification and new business development opportunities through breakthrough innovations.

Six major scientific areas

The Group’s breakthrough innovation projects have a typical time frame of four to seven years and can be grouped into six major scientific areas:

  • New supramolecular materials: a new class of materials with the potential to overcome the traditional technical trade-offs. We will first concentrate on supramolecular polymers, building on key properties of Solvay’s unique and broad portfolio of polymers, in order to create a new class of sustainable properties enabling recycling, self-healing, etc;
  • Surface modification: within surface technologies, our first focus will be on anti-deposit solutions addressing key unmet needs in market applications, for example where cleaning might be an issue, affecting the yield of the devices, while avoiding the use of cleaning agents or hazardous chemicals;
  • Electro-active hybrid formulations: we intend to enter the new world of hybrid formulations, focusing first on piezoelectric hybrid materials formulations that could find applications in sustainable electricity generation – a direct link to clean technologies;
  • Functionalized biomolecules: the aim is to develop special chemicals from bio-based products enabling Solvay growth engines to bring new solutions with a minimal environmental footprint to our customers in their markets;
  • Sulfide chemistry: we want to lead the new chemistry based on sulfur, which has not yet been investigated, where we see huge potential, and which could bring value to sustainable energy and electronic applications;
  • Breakthrough processes: we intend to invent breakthrough process technologies aiming at drastically minimizing our plants’ environmental footprint, safety impact, and capital expenditure intensity.

A new GBU-driven program

Alongside the implementation of growth initiatives and breakthrough innovation, Corporate Research & Innovation has established the "GBU-Driven" program, which contributes to the diversification of GBU portfolios (adjacent innovation). It brings additional skills and resources to GBUs to boost their innovations. Corporate R&I and the GBUs concerned are financing the portfolio of projects in progress at a rate of 50% each. These projects are aimed at deploying new technology in an existing market, or adapting an existing technology to a new market. They are expected to generate short-term sales (two to five years), hence their importance for GBU and R&I.

This portfolio of projects offers a good balance in terms of market/technology risks and time horizons. It opens potential opportunities for developing new activities, while also positively impacting several major growth GBUs. This process is combined with Marketing Excellence initiatives, aiming at promoting technology solutions or detecting unmet market needs, expanding the impact beyond GBU roadmaps.

There are different programs ranging from immediate support to core GBU innovation, collaboration on adjacent innovations (GBU-driven), and investment on breakthrough innovations (Growth initiatives), which also smoothes the way for innovative ideas to become marketed solutions, since those programs are connected.

Sustainable innovation highlights

Here is a selection of new accomplishments that took place in 2017, confirming GBUs’ ability to deliver on innovation:

Solvay boosts European natural vanillin capacity, introduces new products, and upgrades research and innovation platform

With increased manufacturing capacity (60 metric tons) and its new product, Rhovanil® Natural CW, Solvay is meeting the long-term growth expectations associated with natural food and beverage ingredients and reinforcing its position as the reference for natural vanillin. Derived using a proprietary process from non-GMO rice, Rhovanil® Natural CW meets the growing demand of one-on-one natural vanillin substitutes for synthetic vanillin across all food segments. Furthermore, it also launched another natural solution that effectively masks properties of whey and pea protein aftertastes. This functional requirement has also become instrumental in growing nutrition, health, and wellness mainstream applications.

Solvay Dental 360TM polymer means more comfortable dentures

Building on its high-performance polymers, Solvay is entering into medical devices with a new dental care business line. Solvay Dental 360™ uses an innovative material to replace metal in removable partial denture frames, and the offering includes a digital workflow that accelerates the work of dental laboratories and dentists. For patients, it means dentures that are more comfortable and natural looking than those with traditional metal frames.

SolvaLiteTM: a range of thermoset composites for lighter vehicles

Solvay has developed SolvaLite™, a range of thermoset composites for the automobile industry. SolvaLite™ 730, formulated with Reichhold Advalite™ resins, meets car manufacturers' requirements by allowing design freedom, offering exceptional mechanical properties, and enabling the use of automated processes while reducing weight by 40% compared with metals. Reichhold was a key partner in developing this innovative chemistry, which supports Solvay's unique approach to producing serial automotive composite structures.

KetaSpire® PEEK, a polymer to aid prototyping

3D printing, a process that produces three dimensional objects, is now widely used as a means of generating fast and inexpensive prototypes in many industries, notably the automobile and aerospace sectors. Solvay’s KetaSpire® PEEK offers an excellent combination of mechanical and chemical resistance even at continuous-use temperatures of up to 240°C. It inherently possesses excellent insulation and electric resistance properties as well as low moisture and flame retardancy. Leveraging these outstanding properties for 3D printing opens up incredible opportunities for tomorrow’s light-weighting applications.

Open innovation

At Solvay, we care about working together with our customers, with academia, and with other companies or startups in order to leverage multiple sources of ideas to identify the best possible solution to a problem. Overall, we currently manage more than 100 collaborative innovation projects.

The ultimate aim of Open Innovation is to provide the Group with the best skills and technologies currently available in partners’ specialist areas so that it can satisfy and anticipate the needs of customers and the market.

Research and innovation collaboration

Solvay continued to develop collaborative innovation in 2017

Collaborative innovation boosts developments with new ideas and perspectives, as well as different competencies.

In Europe, Solvay is fully involved in Horizon 2020, the current framework collaborative program to foster more research and innovation, aimed at competitiveness and economic growth. Solvay is engaged in several Public-Private Projects. The Consens project is developing flexible and intensified manufacturing processes, and the Style project is preparing a sustainability toolkit for easy life cycle evaluation.

In Belgium, Solvay fosters collaboration within the Belgian R&I ecosystem through its solid presence and contributions to the BiR&D organization, tight links with the Innoviris support institute, and project proposals to the Essenscia science and industry federation and to Catalisti, the Flemish cluster for chemistry.

In France, Solvay is a strong actor in collaborative ecosystems that are catalyzing innovation projects with partners: customers, suppliers, academia, etc. Connections to other Rhône Chemical Valley players, the Axelera cluster, and Axel'One platforms bring multiple opportunities for joint efforts to speed up Solvay’s own R&D programs. During the European Polymer Federation Congress, the largest polymers conference in Europe, where top-notch international scientists and Nobel Prize winners gather in Lyon, Solvay R&I teams organized a Forum on Industrial Polymers’ Future with customers and academic partners.

In Asia, Solvay develops scientific collaborations with local universities. At Shanghai university, the focus is on theoretical research work for selective oxidation and amination reactions. At Beijing university, the effort is exploring deep applications of the HiGee advanced oxidation process. Process safety evaluations are being studied at Nanjing university.

In 2017, Solvay’s Shanghai research center hosted a large conference to promote innovation and green chemistry for sustainable development in China. The conference theme of Effective Catalysis is a key driver for sustainable chemistry.

Networking with universities and research institutes is growing in Korea and supports Solvay's R&D growth initiatives by exploring potential application fields at the universities of UNIST, KAIST, KIST, KRISS, Seogang and Yonsei.

In North America, Solvay hosted a meeting at Stanford University to kick off its engagement with Energy 3.0, the Institute of Energy’s industrial affiliate program. Solvay’s membership connects to a broad range of topics related to energy – including batteries, materials science, data analytics and solar energy, which are directly in line with Solvay’s internal competencies and breakthrough projects.

Solvay also creates partnerships and collaborations by investing in start-ups. Recent investments include two American companies: Multimechanics, a software company based in Nebraska that has developed a simulation solution for advanced materials, and Nohms Technologies in New York state, which works on next generation lithium-ion batteries.

Solvay and Suez join forces in water treatment for industry in China

Solvay and Suez will combine their expertise and technologies to provide innovative industrial effluent treatment solutions based on Advanced Oxidation Processes (AOP). These technologies are effective on a broader spectrum of molecules and are both sustainable and environmentally friendly, as they neither transfer pollutants from one phase to the other nor produce large amounts of hazardous sludge. This Alliance is delivering a tailor-made treatment models to meet the demands of each industrial player, ranging from process design and installation to the supply of full-treatment services.

Solvay partners with the World Alliance for Efficient Solutions

Solvay has joined the World Alliance for Efficient Solutions, created by Solar Impulse founder Bertrand Piccard, to promote efficient technologies, processes, and systems that help improve the quality of life on Earth. The Alliance members consist of startups, companies, and institutions who aim to demonstrate how collaboration and open innovation, based on shared convictions, will turn visions into daily applications by focusing on energy, mobility, water treatment, etc. As a chemical company with experience, capacity and success in industrialization, as well as access to customers, Solvay plays a crucial role in transforming ideas and projects into reality.

Venture capital and start-up

Direct Investment

In 2017, Solvay’s corporate venturing team closed two early stage investments:

  • MultiMechanics, Inc. develops software systems for modelling complex materials and predicting failure. Better design tools help composite materials penetrate new markets where lightweighting enables lower energy consumption, such as transportation.
  • Autonomic Materials, Inc. commercializes environmentally responsive self-healing additive technologies for high-performance coatings and adhesives. Better corrosion protection extends the life of infrastructures.

As part of its decision-making process, Solvay Ventures is using the Sustainable Portfolio Management (SPM) tool to assess potential investment cases.

Fund-of-Funds

Since its inception, Solvay Ventures has joined a total of 11 specialized venture funds, which have assembled portfolios totalling 117 start-ups. Forty three of these companies are developing sustainable energy technologies (generation, storage, efficiency); 12 are working on bio-based chemicals and 12 others are dedicated to solving health-related issues.

For example, in 2017:

  • The Belgian Innovation Fund invested in Allerinvest / Acar’up, (biocontrol agent for house dust mites) and Blue Foot Membranes (membrane bioreactors for water treatment);
  • Phoenix Venture Partners (US) invested in Broadspot Imaging Corp. (imaging devices for eye care) and in Tactus (protective film for writing enabled devices);
  • Avantium, a portfolio company of our partner funds Aster Capital and Capricorn Cleantech, went public on the Amsterdam stock exchange. Avantium develops the bio-sourced polymer PEF for packaging applications, enabling customers to commercialize “green” bottles.

Partnerships

Besides investment, Solvay Ventures’ mission is to intensify business collaborations with start-ups to create mutual strategic value. A recent example is the collaboration between Multimechanics and Solvay’s Composite Materials business unit. Proof-of-concept trials have also been launched with start-up companies in various areas (agricultural bio-stimulants, new battery materials, encapsulation technology).

Examples of the Approach in 2017

Activity

Comment

Fund-of-Funds

In 2017 our partner funds deployed an aggregate amount of capital of $25m in start-up companies developing sustainable technologies

Partnership in composite modelling

Developers using the MultiMechanics modelling platform can accelerate the design of new composite parts by 50% compared with conventional practice. The partnership provides a competitive advantage to our composite materials business unit

Partnership in advanced coatings

By partnering with a start-up developing an advanced coatings technology, Solvay Specialty Polymers has accelerated a development project by an estimated 18-24 months

Partnership in encapsulation technology

Collaboration with a start-up specialized in advanced encapsulation technology enabled Solvay Specialty Polymers to reduce its project duration by 12 months

Community

The Solvay Ventures team maintains a strong involvement in the cleantech community by participating as panelists or jury members in venture events such as the Cleantech Group meetings, the Nordic Venture Forum, Cleantech Capital Day, etc. It is worth noting that in 2017, our group sponsored the Hello Tomorrow event in Paris and hosted a session dedicated to sustainable materials.

Solvay co-invests $1.9 million in MultiMechanics to speed up innovation in new materials

Multimechanics, a software company based in Omaha (Nebraska), has developed a simulation solution for advanced materials. This software allows for more freedom in designing parts, making it possible to adopt new materials such as composites. The decision to invest in MultiMechanics is part of the Group’s ambition to accelerate innovation in complex materials and to expand the use of composites and high performance polymers in the automotive and aerospace industries.

Solvay co-invests in a $3 million round in Autonomic Materials Inc. offering advanced coating technologies

Located in Champaign (Illinois), Autonomic Materials Inc. is the world leader in self-healing technology for high-performance coatings, adhesives, and sealants. Developing new advanced materials with increased performance such as ‘smart’ coatings is one of the main areas of Group R&I. Autonomic Materials Inc.’s innovative products extend long-term coating performance by imparting extreme corrosion resistance, maintained adhesion, and extended service life after damage in a wide range of applications, from high-performance systems for Oil & Gas and industrial maintenance to consumer applications. The self-healing coatings enabled by AMI’s technology provide customers with both improved performance and a more sustainable solution.

Digital: Solvay partner of the ‘Plant 4.0’ start-up incubator

Solvay has joined the "Plant 4.0" startup incubator launched by Total in 2016. It is the first global startup incubator that brings together several international manufacturers around ‘Plant 4.0’. The main goal is to accelerate the deployment of digital technology in industry. This open innovation approach aims to identify the start-ups that offer practical, relatively mature industrial solutions in the IOT field to meet specialized operational requirements. The challenge is to take advantage of the information flow generated by connected objects, like sensors. For example, we could optimize operational performance, and reduce energy consumption and environmental footprint. These start-up companies can test their technology, product, or service directly with potential customers, while benefiting from the expertise of Solvay and other industrial partners, as well as their start-up ecosystem.

Acquisitions

Some examples of acquisitions made in 2017 that will further broaden Solvay’s innovation:

Solvay acquires Energain™ Technology from DuPont and extends its advanced Li-Ion batteries offer

With the acquisition of the EnergainTM technology and formulations from Dupont, Solvay has gained new Open Innovation methods by enlarging its existing portfolio of high performance salts and additives for electrolytes and strengthening its capabilities to develop further innovative high-voltage solutions for Li-Ion batteries. The power and durability of Li-Ion batteries determine the efficiency and reliability of eco-friendly transportation, for instance. Achieving high energy at an affordable cost, without compromising safety, is a key objective of the Li-Ion battery industry. Energain™ technology allows Solvay to offer new solutions to its partners so they can reach their high voltage goals.

Solvay acquires large-tow carbon fiber precursor manufacturer

With the acquisition of European Carbon Fiber GmbH (“ECF”), a German producer of high-quality precursors for large-tow (50K) polyacrylonitrile (PAN) carbon fibers, Solvay aims to lead the adoption of composites in automotive applications, in addition to serving select industrial markets and supporting the potential adoption of large-tow fibers in aerospace. Today, companies are looking to use materials that are lighter in weight and, therefore, more fuel efficient. Adopting carbon fiber-based composite materials in parts manufacture is one way companies are trying to meet their sustainability goals and comply with government-imposed requirements. Thanks to this acquisition, Solvay is leveraging its polymers and materials science competencies to drive breakthrough innovation in large-tow carbon fibers.

Research and Innovation indicators

Innovation expenditure – breakdown by purpose

In %

 

2017

 

2016

 

2015

Scope: Consistent with financial reporting.

Legend: R&I effort includes the current year investment in R&I activities of the group, whether they are capitalized or not. It is before deduction of subsidies and R&I tax credits and does not include investments in start-up companies. see note B13

Growth

 

70

 

75

 

60

Competitiveness

 

16

 

13

 

21

Defense

 

14

 

12

 

19

Research and innovation efforts amounted to €325 million in 2017, very stable compared to last year (€323m restated in 2016, in line with the new perimeter). The global expenditure analysis clearly underlines that innovation projects are generally focused on growth globally, at 70% of total efforts.

Some 83% of the Group’s R&I investments are directly managed by GBUs.

The R&I intensity, i.e. the ratio of research and innovation efforts to net sales, reached 3.2%.

Innovation expenditure – breakdown by nature of activities

In %

 

2017

 

2016

Scope: Consistent with financial reporting.

Innovation Project pipeline

 

49

 

50

Opportunity Bank – Proof of concept

 

24

 

28

Customer Support

 

15

 

12

Plant Support

 

12

 

10

To anticipate the future, the Group has made a major investment of €78 million (24% of the total R&I effort) to develop formalized ideas into new innovation project opportunities. This is done by using a bank of opportunities to validate the proof of concept before feeding through to the innovation project pipeline.

The innovation project pipeline, which constitutes the bulk of the research effort (about 50%), allows Solvay to develop through innovative and environmentally friendly products.

Research & Innovation staff

Headcount

 

2017

 

2016

Scope: Consistent with financial reporting.

Employees include research engineers and scientists, technicians, laboratory and pilot operators, and employees dedicated to R&I facility management and R&I support

 

2,100

 

2,340

The decrease in staff largely corresponds to the sale of the Polyamides business. Otherwise, the research staff remained stable within Solvay. Throughout the Group, about 2,100 people work in R&I. Solvay’s major R&I centers are located in Europe, Asia, North America, and Latin America. While maintaining a significant geographical diversity, Solvay ensures the development of high-performance, specialized laboratories that give its research a major advantage.

Intellectual Property agreements

 

 

2017

 

2016

Scope: Consistent with financial reporting.

Intellectual Property (IP) agreements & cooperation agreements

 

1,660

 

1,300

Solvay has a substantial number of agreements, highlighting the openness of its innovation strategy. As Solvay’s approach to managing co-development projects with partners has matured, it has signed a large number of NDA-type agreements aligned with GBU and Corporate efforts.

Innovation output – Patents

 

 

2017

 

2016

Scope: Consistent with financial reporting.

First Patent Filings

 

284

 

240

The Intellectual Property strategy is leveraged through strong partnerships between the Intellectual Assets Management Function and both the GBUs and the R&I function. The number of patent applications it has filed confirms the Group’s strong trend towards patented innovations.

New sales ratios

In %

 

2017

 

2016

Scope: Consistent with financial reporting.

New sales ratio

 

18

 

15

The new sales ratio includes two components:

  • newly commercialized products, services or applications, and
  • significantly improved products or services that provide a new usage value for the customer.

The new sales ratio is calculated by adding together the current annual sales of these two components (created less than five years ago) and dividing by total annual sales.

This ratio increased in every segment in 2017. The ratio for the Solvay group is 18% (15% in 2016). The "Advanced Materials" segment posted the highest score in this field (25%).

R&I expected revenue breakdown by SPM heat map categories

Percentage of net sales

 

2017

Scope: Consistent with financial reporting.

R&I expected revenue are those expected in 2020.

Solutions

 

80

Neutral

 

20

Challenges

 

0

The innovation pipeline is a key element in achieving the 2025 target of realizing 50% of Solvay’s revenues from sustainable solutions. To make sure the innovation projects we are working on are the right ones, Solvay teams have adapted the “Sustainable Portfolio Management” (SPM) methodology for assessing Research & Innovation projects. 100% of R&I projects are analyzed every time a project moves into a new phase, i.e. passes a gate; a full SPM analysis is applied to the future product and the data is stored in database. Several examples of these sustainable innovations are presented in this section.

In 2017, 80% of expected revenues from the innovation project pipeline come from sustainable solutions. The other 20% are neutral.