Solvay furthers G.R.O.W. strategy
During its annual results presentation, Solvay revealed that it is taking steps to organize its Soda Ash & Derivatives business into a separate legal structure. This is part of the G.R.O.W. strategy, under which the Materials, Chemicals and Solutions segments were each given distinct mandates that reflect the differing dynamics in their markets.
“These steps will reinforce internal financial and operational transparency and accountability, in line with its mandate of optimising cash flow generation and returns, while increasing future strategic flexibility,” the company said.
In January and also as part of G.R.O.W, Solvay had announced 500 job cuts by the end of 2022, as it seeks to simplify its support functions. This will mean costs of €170 million, but should lead to incremental savings of €75 million/year. Together with previously announced plans, this will increase the mid-term cost savings target from the €300 million announced in November 2019 to €500 million by 2024, of which €175 million was delivered in 2020. In all, Solvay achieved savings of €332 million in 2020.
Solvay has also concluded recently to sell its interest in six commodity business lines with combined sales of about €300 million/year: barium and strontium products, the European sodium percarbonate and commodity amphoterics businesses; the sodium chlorate business and related assets in Portugal; some fluorine chemicals and a site in Korea; and the process materials product line. All these should be completed within 1H.
During 2020, Solvay’s net sales were down 10% organically on 2019, due to the impact from COVID-19 on civil aerospace markets and low volumes in the oil and gas markets. For similar reason, EBITDA was 13.9% down. Healthcare, personal care, consumer product and electronics were more resilient.
Separately, Solvay has begun testing ChemChain blockchain technology to trace its products throughout the entire value chain in order. This being done, it said, to address challenges in circularity and sustainability that are “driving the development of new regulatory requirements and corporate responsibility actions”.
“ChemChain would be instrumental in allowing circular processes, which are among the chemical industry’s most exciting contributions to a sustainable future,” said Sophie Maillet, digital hub coordinator. By 2030, Solvay intends to treble its sales of products based on renewable or recycled resources to 15% of group turnover.