Evonik's New Approach: Two Business Lines United For Growth

Evonik is reorganizing two of its business lines to increase their growth potential. The Coating & Adhesive Resins and Health Care divisions will focus on the core areas and accordingly administer future investments.  Non-core businesses will be sold, merged into partnerships, or phased out in a socially responsible manner. These changes affect businesses generating a total of €350 million in sales.

The  Health Care division will now focus on elaborating vital growth sectors like lipids for mRNA and gene therapies, drug delivery systems, and cell culture ingredients. Production of keto acids for pharmaceuticals in Hanau will end by 2025, impacting around 260 employees, who will be supported in finding new roles within or outside the company. Several strategic business options will be explored in Ham and Wuming. In recent years, the amino and keto acids segment has averaged €100 million in sales. 

Christian Evonik, Chairman Of TheExecutive Board of Evonik, says, “Our industry is undergoing fundamental structural change worldwide. 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.”

“Our amino and keto acids businesses in Ham and Wuming are strong and offer great potential. We are therefore not considering closing them. These businesses could reach their full potential and flourish with investments in these sites. Therefore, We are examining options such as partnerships or divestments allowing the businesses to prosper,” commented Caspar Gammelin, the Head of Nutrition & Care division.

The  Coating & Adhesive Resins division will concentrate on the growth of two core areas, which are liquid polybutadienes for adhesives, sealants, and tires and speciality acrylics for medical technology and packaging. The polyolefins business, with annual sales of €100 million, will be merged into Evonik’s C4 chain business, which will later be sold. With about 330 employees across Germany and China, the polyester business for coatings and adhesives is to be sold to new owners. 

This segment generates around €150 million in sales annually. The largest site, in Witten, Germany, employs about 250 people, while a smaller facility in Shanghai has around 30 employees. According to Lauren Kjeldsen, head of the Smart Materials division, the polyester business has solid technical expertise but requires investments that other companies can better realize. The search for potential buyers will begin this year.

“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,” said Thomas Wessel, Chief Human Resources Officer and Labor Director of Evonik.

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.”