Merck's future in China is crystal clear

Merck KGaA, a German science and technology company, is seeking vibrant growth in its performance materials business in China through investment and ties with local partners.

In its latest attempt to deepen its commitment to China, the world’s oldest family-owned pharmaceutical and chemical company, celebrating its 350th anniversary this year, announced on Monday during the China International Import Expo that it has signed a Memorandam of Understanding with Shenzhen-listed Visionox Technology Inc to combine the forces of the two companies to accelerate the development and application of organic light-emitting diodes (OLED) in China.

“This strategic alliance with Visionox, a world leading supplier of integrated advanced display solutions, will reinforce Merck’s position as a trustworthy partner and support the innovation and development of our customers,” Allan Gabor, president of Merck China and managing director of Performance Materials China, told the signing ceremony.

“It demonstrates our aspiration to be embedded into the local innovation ecosystem, enhance constructive strategic partnerships and accelerate our localization, in order to sustainably impact everyday life in China, today and for generations to come.”

Merck offers a complete portfolio of premium livilux materials for OLED displays and lighting devices which include materials for vapour processes on glass or flexible substrates, as well as OLED inks for printing.

With one of the largest R&D teams in the industry, the company holds more than a thousand global patents and works closely with market leaders to develop designs with improved efficiency and lifetimes for future OLED applications.

Merck is one of the 2,800 exhibitors at the world’s first import-themed national-level expo.

It has set up a booth of over 300 square meters at the Shanghai National Exhibition and Convention Center to showcase a wide spectrum of innovative products and technologies from its three pillar businesses, namely Health Care, Life Science and Performance Materials, as well as to host innovation workshops.

First participating in the Chinese market in the 1980s, Merck’s performance materials business, encompassing three key units of Display Solutions, Surface Solutions and Semiconductor Solutions, has been growing rapidly over the past three decades.

The company has introduced into China many of its cutting-edge technologies, such as Display Solutions in liquid crystal and OLED as well as innovative materials for semiconductor industry, to name a few.

Along with Merck’s accelerated investment in China in recent years, continuous investment has been placed in the Performance Materials segment which is always a key driver of the company’s growth in the country.

Over the past five years, an accumulated 44 million euros (US$49.9 million) has been invested into the Performance Materials Hub in Shanghai.

In 2013, Merck Liquid Crystal Center China, which integrates liquid crystal mixture production, integrated supply chain, application development, sales and marketing, was opened in the city. In 2016, the company’s Liquid Crystal Application Lab was upgraded and expanded to the Display Materials R&D Center China.

One year later, Merck relocated the Technology Application Network China for Surface Solutions to a new site within the hub with expanded capabilities. In June of this year, a brand-new OLED Technology Center China was inaugurated, offering a range of state-of-the-art equipment and clean room facilities to enable OLED device fabrication and characterization.

“With these investments, Merck has become the most localized player in China with a full value chain support to provide a wide range of services from liquid crystal manufacturing, supply chain, quality, research and development, sales to technical services and after-market support,” said Gabor.

“They have enabled us to offer a quicker response, faster delivery and closer contact with local customers.”

Customer-centricity is a key strategy for Merck to collaborate with its partners in China where overall competition in the Performance Materials segment has intensified as more domestic players gain global competence while international counterparts are developing in the local market.

Apart from making investment in the sector, which has allowed Merck to be aligned with the latest innovation needs of local customers and help them progress in their own fields, Merck also places a keen focus on maximizing the benefits for its customers.

Take liquid crystal for example.

Besides developing and introducing the latest liquid crystal materials, Merck also offers solutions to optimize the effciency and effectiveness of customers’ production lines in order to help them save cost.

The company provides a unique liquid crystal packing canister to customers.

On one hand, the canister can provide large volume of liquid crystals to production lines to reduce the shutdown and turnaround time and on the other hand, the premium quality of its liquid crystal can guarantee the reliability of such a big volume, which is several dozens of times more than traditional glass bottles.

The stainless steel canister can also be recycled and reused for further packaging, which therefore provides customers with environmentally-friendly packaging solutions.

With display solutions being one of its biggest areas of expertise, Merck holds a unique perspective that OLED and liquid crystal display, or LCD, will co-exist in a foreseeable decade with the former focusing more on medium and small-sized screens and the latter more advantageous in larger screens.

The company, for instance, launched this year three new liquid crystal single materials, which can provide better performance in a better balance of high transmission rates, wide color range and reliability to meet the most complex requirements in transmission, contrast and reliability.

Looking forward, Merck’s performance materials segment will continue to bank its success on localization, talent and partnership.

“We will continue to strengthen our footprint, especially in the electronics market and accelerate our growth in the country by focusing on application-driven and customized solutions and enabling our customers to leverage market trends with our solutions,” Gabor said.

“Particularly, we’ve perceived great potential in the Yangtze River Delta where most of our facilities and many of our customers are located as the region boasts outstanding infrastructure, friendly investment environment as well as a high quality talent pool.”