DACH cleanroom market report | Unanswered questions

By Sophie Bullimore | Published: 21-Jun-2023

There has been plenty going on in the cleanroom DACH market, plenty of notable projects cropping up all over the place, but there are some answered questions on regulation and industry trends that might have huge impacts on those operating in controlled environments

The DACH region of Europe is one of extreme importance to so many global industries. As an innovation hub for the cleanroom sector, trends here can affect the production of pharmaceuticals, semiconductors, and even some food items, many miles away.

For instance, Germany-based cleanroom manufacturer Daldrop SBB has recently made a major expansion in the US. With its headline product, the SHELMEQ system for pharmaceutical clients, the expansion will bring that expertise from Germany to New York.

In another case, US-based cleanroom designs and build expert CRB, moved to a much larger space in Germany at the end of 2022. “We have achieved tremendous success in a short period of time in Europe, and these new spaces represent our rising commitment to providing the resources of a global firm locally to clients who drive innovation in pharmaceutical health care and speed therapies to patients,” said Eric Unrau, CRB’s VP of European Operations.

It is a debate whether it was the chicken or the egg that came first, but it is also a place where a lot of pharmaceutical firms set up shop. Meaning even companies from other parts of the world set the area as high priority to provide services into.

Other regions of the world are now tempting with (more) money and cheaper energy prices

- Exyte CEO Wolfgang Büchele

Chris Eccles, CEO of pharmaceutical component firm, ChargePoint Technology, commented on its huge expansion in Germany, and its emphasis on DACH as a hub for pharma clients: “In the last 4 years we have tripled our order intake in the region and I’m sure this growth will continue with Patrick [DACH region Manager] and the team now permanently based in the area. This new investment and expansion of the team in the DACH region demonstrates ChargePoint's commitment to the region and our valued customers."

The Riverside Company is another prime example of the services industry that exists in the DACH region. The US-based consumables firm made the bold leap in March to acquire Germany-based Dastex, a market-leading provider of both third-party brand and proprietary garments and consumables for cleanrooms in Germany, Austria and Switzerland.

Another consumables firm that is trying to make inroads in the region is Kimberly-Clark. Focusing on sustainability, Kimberly-Clark Professional has expanded their PPE recycling programme “RightCycle” to the Netherlands and Switzerland. The fact that this is such an important milestone here, is reflective of the priorities of the region. Sustainability is more and more being pushed to the front of the queue when it comes to business decisions, and this is in most part thanks to client pressures and preferences.

Medicine? Plant? Drug?

A repeatedly stated consequence that came out of the pandemic was the increased sterility of industries that previously did not require it. One such industry has been the cannabis production market.

Recently the SKAN Group was part of a project for increasing the quality of the cannabis produced by Switzerland-based Cannerald. The containment specialist provided both isolator systems and room decontamination with H2O2 for the facility, this is to keep the plants mould, fungi, and bacteria-free.

DACH cleanroom market report | Unanswered questions

The difficulty comes for this industry in the labyrinth of ever-evolving regulations that has to be navigated and so getting someone on board who has expertise in building or certifying for the industry that you are targeting can only be helpful for this.

Supply chain regulations?

A big change in 2023 for many of those operating in the DACH region is the new regulations on corporate due diligence in supply chains in Germany.

The regulation is intended to regulate that companies with a size of at least 3,000 employees in Germany fulfil their corporate responsibility for compliance with human rights in global supply chains, for example, protection against child labour, fair wages or protection of the environment.

Part of the regulation focuses on applying risk management to ensure human rights are met across the entire value chain. The transparency that is also required to ensure this will be a big change for these companies.

Supply chain management generally has been a huge topic since the pandemic, and many cleanroom projects tell tales of supply chain issues that they have to manage. However, disproportionately these news headlines come from places that aren’t the DACH region. Perhaps it does bode well to be at the geographical centre of a region, and being there helps you reap the benefits.

Viable semiconductor industry?

DACH-neighbouring Netherlands is home to Nexperia, a global electronics firm. Unsurprisingly, the company has a presence in Germany too, and in early 2023, expand the facility there. Enlisting Finland-based Caverion for the 700 sqm ISO Class 4 cleanroom. This wonderfully demonstrates that the DACH region does not exist in a vacuum and in fact, is probably such a success because it isn’t. More and more stories like this are cropping up as this as the semiconductor revolution carries on.

In terms of where the market is now following the pandemic, Exyte has seen a huge uplift specifically from this industry. “Between 2018 and 2022 we doubled our sales,” said Büchele. “For 2023 Exyte plans to increase sales to close to €8.0 billion. Our leading market position and our high order backlog of €6.8 billion enable us to continue to further increase the high level of sales in 2023 and beyond.”

A rarity in Germany, as a whole, only 8% of Exyte’s business comes from pharmaceuticals and life science. The chip shortage has scared more than a few nations into realising the need for domestic onshoring. With global semiconductor production seeing a revolution specifically from Europe and North America, Exyte, as a provider of high-tech facilities, has been at the forefront of this realisation. The company has already responded to several manufacturers that have already announced intentions to establish new or expand existing facilities in European countries.

“The importance of Europe for the global chip industry is expected to increase,” says Exyte CEO Wolfgang Büchele. “With our products from northern Bohemia, we will supply key customers from the semiconductor industry who build state-of-the-art chip fabs in Europe and especially in Germany.”

We have achieved tremendous success in a short period of time in Europe

- Eric Unrau, CRB’s VP of European Operations

Exyte is putting its money where its mouth is with this, announcing a $21m expansion in the DACH-neighbouring Czech Republic. The specialist has announced plans for new manufacturing sites in Hostomice and in Žatec.

The ongoing investment boom in the semiconductor industry is enhanced by the EU’s aim to increase its share of global chip production to 21% by 2030.

But there is concern about whether this will be enough, and if the framework is there. Speaking to German WirtschaftsWoche, Exyte’s Büchele expressed concerns about the plan for years to come. “While new plants are already being built on the other side of the Atlantic, people in Europe are still haggling over which pots to take the money from. Are the Europeans too late? And is money alone enough? After all, the framework conditions have to be right.”

Büchele also points out here how energy prices might play a huge role in this. Cleanrooms demand a huge amount of energy to run, so this can be a major determining factor in the industry’s comings and goings. As Western energy prices are rising, “Other regions of the world are now tempting with (more) money and cheaper energy prices,” he says.

The answer to this question will determine whether this is a long-term viable trend for other companies to jump on, or just a passing stress for the established companies to continue as normal with.

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