Dow Corning Corp. and Wacker Chemie GmbH announced last week that they plan to form an alliance in Asia to manufacture silicone intermediates and fumed silica. The materials are used in greases and specialty lubricants and a wide variety of other consumer and industrial products.
The companies, among a diminishing number of silicone producers, would independently develop and operate their own manufacturing facilities for finished products at the same site and would continue to compete and operate independently in the marketplace, both in Asia and elsewhere. The companies are still working on a definitive agreement. Their May 28 announcement did not identify a specific location in Asia.
Dow Corning, which is headquartered in Midland, Mich., is a 50-50 joint venture between Dow Chemical Co. and Corning Inc. Wacker is based in Munich, Germany, and is co-owned by a family of investors and the French investment firm Aventis S.A.
The lubricants industry uses silicone compounds mainly in greases, food-grade lubes, spray lubricants and in electrical systems. Modified versions are used as defoamers in metalworking fluids and a wax form of silicone lubricant is widely used in metal forming and in the textile and paper industries. Fumed silica is a feathery substance used as a thickening agentin the manufacture of damping greases, which help control motion, vibration, squeaks and rattles in mechanical and electro-mechanical components.
After a period of consolidation in the 1990s, the number of companies making silicones has fallen to approximately seven, including GE Silicones, Rhone Poulenc, Shin-Etsu, Rhodia and Degussa. Dow Corning, which invented silicone compounds more than 50 years ago, holds 36 percent of the global market. Silicone is difficult to manufacture, so barriers to entry are high. In general, silicone-based lubricants perform under very wide temperature ranges, are extremely resistant to oxidation and are compatible with rubber and plastics.