Evonik aligns two business lines with new growth strategy
Businesses outside core areas are to be sold or discontinued
Evonik is reorganizing two business lines to strengthen their growth prospects. Coating & Adhesive Resins and Health Care will focus on and concentrate future investments in their respective core businesses. The remaining businesses outside these cores are to be sold to new owners or incorporated into partnerships. In individual cases, businesses are to be discontinued in a socially responsible manner. In total, businesses affected by these changes generate sales of €350 million.
“Our industry is undergoing fundamental structural change worldwide,” says Christian Kullmann, chairman of the executive board of Evonik. “We will align all our resources with our strongest businesses. Only then can we seize growth opportunities in these markets at the necessary speed. Conversely, this also means that for businesses where we cannot offer appropriate prospects at Evonik, we will implement solutions outside Evonik.”
In the future, the Health Care business line will focus on its growth areas: lipids for mRNA and gene therapies, drug delivery systems, and cell culture ingredients. The production of keto acids for pharmaceutical applications in Hanau is to be discontinued at the end of 2025. The approximately 260 employees affected will be actively supported in their search for new options in other businesses within Evonik or outside of the Group. For the sites in Ham (France) and Wuming (China) active in the same business, several strategic options are being evaluated. The entire amino and keto acids business on average generated sales of around €100 million in recent years.
“Our amino and keto acids businesses in Ham and Wuming are strong and offer great potential,” says Caspar Gammelin, head of the Nutrition & Care division. “We are therefore not considering closing them. With investments in these sites, these businesses could reach their full potential and flourish. We are therefore examining options such as partnerships or divestments that would allow the businesses to prosper.”
The Coating & Adhesive Resins business line is being developed along similar lines. In the future, it will focus on two core areas for growth: liquid polybutadienes as additives for adhesives and sealants or tires, and specialty acrylics for medical technology and the packaging industry. The business line's existing polyolefins business, with sales of around €100 million, will be transferred to the C4 chain business at Evonik. This will make even better use of the advantages of the existing close supplier relationships of the two units based in Marl (Germany). In the future, the business will be sold as part of the C4 chain business. The polyester business for coating and adhesive applications is to be sold to new owners. It has around 330 employees globally, in Germany and China. The largest site with around 250 employees is in Witten (Germany). There is also a smaller plant in Shanghai with some 30 employees. The business has annual turnover of around €150 million. “The technological expertise of our polyester business is extensive,” says Lauren Kjeldsen, head of the responsible division Smart Materials. “But to be successfully competing in the long term globally and to generate the necessary margins, investments are needed - and other companies for which polyester is a core business can realize these better than we can.” The search for interested parties is to begin still this year.
For Thomas Wessel, Chief Human Resources Officer and Labor Director of Evonik, one thing is clear: “Whether we transfer businesses to new owners or discontinue them in individual cases, we always do so in a socially responsible manner with close involvement of employee representatives. Also, when divesting businesses we have proven: We select investors carefully and always have the future of our company and the well-being of our employees firmly in mind.” Chief Executive Officer Christian Kullmann says: “The realignment of the two business lines exemplifies our approach. By concentrating on our strengths, we can unlock the growth potential that lies within our company.”
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