Skip to main content

Evonik announces ‘next phase of strategic transformation’

13th May 2022

Submitted by:

Andrew Warmington

At its Capital Markets Day, Evonik announced that it is embarking on the next phase of its strategic transformation. During this, said board chairman Christian Kullmann, the company will be “executing targeted and massive investments in green growth and making sustainability our central innovation driver”.

Evonik will focus on its three ‘growth divisions’ of Specialty Additives, Nutrition & Care and Smart Materials, while selling off Performance Materials. It aims to find new owners or partners for the division’s three businesses, Superabsorbents, Functional Solutions and Performance Intermediates, during 2023.

Performance Materials has sales of about €1.8 billion/year and accounts for about 12% of Evonik’s revenue. Last year, its adjusted EBITDA rose from €88 million to €136 million on the back of strong demand, but many of its products have become relatively commoditised. They include acrylic acid, oxo alcohols and plasticisers, potassium derivatives and intermediates for pharmaceuticals, cosmetics and surfactants.

The proceeds from the divestments and the operating cash flow in the coming years will be channelled to the green transformation, Kullmann added. By 2030, Evonik aims to invest more than €3 billion, 80% of its annual growth investments, to ‘Next Generation Solutions’, which offer sustainability benefits.

The company aims to increase the share of these products from 37% now to 50% by 2030. These include delivery technologies for controlled release of APIs, gas separation membranes and natural-based cosmetic active ingredients. In addition, the repositioned RD&I unit is “fully integrating sustainability into the management of Evonik’s innovation activities”.

A further €700 million will be invested in ‘Next Generation Technologies’, that is production processes and infrastructure to avoid CO2 emissions. Evonik is seeking to reduce its Scope 1 and 2 emissions by 25% from 6.5 million tonnes/year to 4.9 million by 2030. The investment will also help to cut operating costs by more than €100 million/year up to 2030.

As part of the transformation, Evonik has reviewed its mid-term financial targets and confirmed core targets of an adjusted EBITDA margin of 18-20%, a cash conversion rate of over 40% and ROCE of around 11%. In line with the full alignment to high-growth speciality chemicals, it will seek organic sales CAGR of over 4%, up from the previous target of 3% volume growth.

Earlier, Evonik’s Active Oxygens business line had released a new sustainability strategy for its hydrogen peroxide (H2O2), peracetic acid and persulfates. This includes steps to slash carbon emissions and increase resource efficiency in production, with the goal of achieving climate neutrality by 2040.

These products are powerful oxidants, which break down quickly into oxygen and water and as such are considered to be some of the cleanest chemicals available. However, conventional upstream production has a substantial carbon footprint. Demand for H2O2 is growing at 7-8%/year.

Plans involve increasing the proportion of renewable electricity in producing these chemicals from 80% in 2021 to 90% in 2023 and having a fully climate-neutral facility by 2032. New means will also be implemented for heat pumps and efficient energy reuse over the next ten years.

Active Oxygens is also pursuing plans to switch fossil-based raw materials in its production processes to bio-based acetic acid and green hydrogen among other things. It is currently exploring options to source sustainable hydrogen locally at each of its sites, with the first scheduled to use it in 2026.

Evonik has also opened its new ‘Agro Hub’ for its Interface & Performance business line in Americana, Sao Paulo, Brazil. This combines new laboratories, two pilot plants and infrastructure to support customer training. The business offers additives and adjuvants for conventional and biological agrochemical formulations under the Break-Thru brand. Existing tech centres are at Marl, Germany, and Richmond, Virginia.

Feature article – Saltigo rides out the cycle

Market and sustainability trends are positive drivers for Saltigo, despite the agro downturn. Andrew Warmington met up with the new CEO at Chemspec Europe

Submitted by:

Andrew Warmington

UPL to split out specialities

Indian agrochemicals giant UPL has announced plans to transfer its speciality chemicals business, including agrochemical active ingredient (AI) manufacturing to its wholly owned subsidiary UPL Spec

Submitted by:

Andrew Warmington

Nippon Shokubai opens Indonesian plant

Japan’s Nippon Shokubai has officially opened a 100,000 tonnes/year acrylic acid (AA) plant that was built at a cost of about $200 million at Cilegon, Banten, Indonesia.

Submitted by:

Andrew Warmington

CABB to invest at Finnish agro site

The CABB Group has said that it will invest over €50 million by 2025 to expand facilities at its agrochemical manufacturing site in Kokkola, Finland.

Submitted by:

Andrew Warmington

AI for SAPs

Together with Algo Artis, Japan’s Nippon Shokubai has developed an algorithm-based means for the production planning of superabsorbent polymers (SAPs) based on acrylic acid, and has started operati

Submitted by:

Andrew Warmington

Halozyme has dropped its approach to buy Evotec

Halozyme abandons Evotec bid

San Diego-based biopharmaceutical company Halozyme Therapeutics has withdrawn the offer it made for Evotec after a week after the latter declined to engage with it.

Submitted by:

Andrew Warmington

adcs

Three invest further into ADCs

Three CDMOs have separately announced expansions in their antibody-drug conjugate (ADC) manufacturing capabilities and capacity on opposite sides of the Atlantic.

Submitted by:

Andrew Warmington

Cambrex exits drug product

CDMO Cambrex has sold its Drug Product business unit to Noramco. Terms were not disclosed.

Submitted by:

Andrew Warmington

Siegfried breaks ground on R&D centre

Siegfried has broke ground for its new global R&D centre for drug substances at its site in Evionnaz, Switzerland.

Submitted by:

Andrew Warmington

Drug product centre opens

Following two years of construction work, CDMO Siegfried has officially opened its new development centre for drug products at its sites in Barberà del Vallès and El Masnou near Barcelona.

Submitted by:

Andrew Warmington

First waste-based biosurfactants

Belgian start-up AmphiStar has launched what it claims are the first fully upcycled biobased surfactants under the trade names AmphiCare and AmphiClean.

Submitted by:

Andrew Warmington

Aether to supply Seqens

Indian firm Aether Industries has entered into a manufacturing agreement with Chemoxy International, a UK-based subsidiary of Seqens.

Submitted by:

Andrew Warmington

New model for biocatalysts

BASF, the Austrian Research Centre of Industrial Biotechnology (ACIB) and the University of Graz in Austria have co-developed a computer-assisted regression model to improve enzyme performance and

Submitted by:

Andrew Warmington

CBE JU funds 31 more projects

The Circular Bio-based Europe Joint Undertaking (CBE JU), a €2 billion partnership between the EU and the Bio-based Industries Consortium (BIC) that funds projects advancing competitive circular bi

Submitted by:

Andrew Warmington

Investment in Tanasote plant

Octowood, a part of the Sweden’s Rundvirke Industrier Group, has invested in a new treatment plant using Arxada’s wood preservative, Tanasote.

Submitted by:

Andrew Warmington

Rhamnolipid milestone reached

Evonik has manufactured the first product from its industrial-scale biosurfactants facility at Slovenská Lupca in Slovakia.

Submitted by:

Andrew Warmington

Sudarshan to buy Heubach

India’s Sudarshan Chemical Industries (SCIL) has entered into a definitive agreement to acquire the Heubach Group in a move that it said would “create a global pigment company, combining SCIL’s ope

Submitted by:

Andrew Warmington

Lanxess to continue pigment production

Lanxess has reversed a decision to sell the chromium oxide pigments business at the Krefeld-Uerdingen site in Germany, preserving 50 jobs there.

Submitted by:

Andrew Warmington

Alliance in natural fragrances

Sensegen, a US-based specialist in biotech-enabled fragrances, notably a new class of natural musk raw materials, has announced a strategic collaboration with Japan’s Takasago, a large player in th

Submitted by:

Andrew Warmington

Croda breaks ground in China

Croda International has broken ground for a low-carbon, multi-purpose production facility on a greenfield site in Guangzhou. This triples its manufacturing capacity for fragrances and establis

Submitted by:

Andrew Warmington

CCT collaboration for Givaudan

Flavours and fragrances giant Givaudan has agreed a research collaboration for the development of sustainable fragrance ingredients from renewable carbon, with US-based LanzaTech, which describes i

Submitted by:

Andrew Warmington

Kao boosts jasmine fragrance

Japan's Kao Corporation is to double capacity for the synthetic fragrance methyl dihydrojasmonate (MDJ) at its site in Olesa, Spain, by adding a second production facility.

Submitted by:

Andrew Warmington

Merck KGaA “in a strong strategic position”

At its latest Capital Markets Day, Merck KGaA said that it is “in a strong strategic position” to profit from medium-term growth opportunities in all three of its business sectors after a transitio

Submitted by:

Andrew Warmington

Suez joins Global Impact Coalition

Suez, which describes itself as “a global leader in circular solutions for water and waste”, has joined the Global Impact Coalition (GIC).

Submitted by:

Andrew Warmington

Chemours opens battery lab

Chemours has opened Chemours Battery Innovation Centre (CBIC) at the Chemours Discovery Hub in Newark, Delaware.

Submitted by:

Andrew Warmington