Evonik Transforms to Focus on Specialty Chemicals Production

On May 11, Evonik announced that in 2023, Evonik will withdraw from the three functional material businesses of superabsorbent resins, functional solutions and functional material intermediates, which are also all Evonik's current functional material businesses. At the same time, Evonik will focus on the production of specialty chemicals such as specialty additives, nutrition and care chemicals, and smart materials under a portfolio reform plan.

Evonik Group Chairman Cullman told investors: "For strategic considerations, Evonik will exit the functional materials business and establish a development strategy leading to a better future in the best way." Currently, Evonik is preparing for the exit of all three projects. Prepare the Performance Materials business with the goal of finding a new owner or partner for each business in 2023. It is understood that the proceeds of the divestiture and the operating cash flow in the next few years will be used for the green transformation of the enterprise. Evonik aims to invest more than 3 billion euros in the development of "next-generation solutions" with significant sustainable advantages by 2030. This amount represents about 80% of the annual growth investment. Evonik will also invest 700 million euros in "next-generation technologies" over the same period, such as optimizing production processes and infrastructure to reduce carbon dioxide emissions.

"We will significantly increase the sales share of next-generation solution products, from the current 37% to more than 50% by 2030," said Evonik Executive Director Thomas Wessel. For example, for the controlled release of active pharmaceutical ingredients Drug delivery technology, gas separation membranes for biogas and hydrogen, and natural active ingredients for cosmetics. Evonik says it will reduce carbon dioxide emissions from the current 6.5 million tons to 4.9 million tons by 2030, supported by a new generation of technology. At the same time, it will reduce its annual operating costs by more than 100 million euros.

Evonik's repositioned R&D and Innovation division also integrates sustainability into the management of innovation activities. "By 2030, our R&D and innovation targets will generate additional sales of more than 1 billion euros in innovative growth areas. Our innovation capabilities are a key factor in harnessing green and profitable growth." Innovation Council Member Harald Scheer Wager said.

According to Evonik's financial report, sales of the functional materials business unit will increase by 47% in 2021 to 2.91 billion euros; adjusted EBITDA will increase from 88 million euros in 2020 to 317 million euros.