Evonik plans major restructure of two business units as global competition intensifies

BARCELONA (ICIS)–German specialty group Evonik plans to restructure two of its business units, putting non-core assets up for sale, closure or partnerships.

The Coating & Adhesive Resins and Health Care businesses will be extensively reorganized, with operations generating sales of €350 million slated for strategic changes, the company said on Friday.

In Health Care, production of keto acids for pharmaceutical applications in Hanau, Germany, is to be discontinued at the end of 2025, with the loss of around 260 jobs. For the sites in Ham (France) and Wuming (China) active in the same business, partnerships or divestments are being evaluated. The amino and keto acids business generates sales of around €100 million.

In future, the Health Care business line will focus on what Evonik considers to be its growth areas: lipids for mRNA and gene therapies, drug delivery systems, and cell culture ingredients.

Caspar Gammelin, head of the Nutrition & Care division, said: “Our amino and keto acids businesses in Ham and Wuming are strong and offer great potential. 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.”

COATINGS RESTRUCTURE
Evonik’s Coating & Adhesive Resins business line 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. In the future, the business will be sold as part of the C4 chain business.

The €150 million turnover polyester business for coating and adhesive applications is to be sold. It has around 330 employees in Germany and China. The largest site, with around 250 employees, is in Witten (Germany). A smaller plant in Shanghai has around 30 employees.

Lauren Kjeldsen, head of the responsible division Smart Materials, said: “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.”

Evonik, like many of its peers in the European chemical sector, is under intense pressure from mainly China-driven global overcapacity, with companies under pressure to take radical action to focus on core assets and close or sell other operations.

As well as the ramp-up in global production capacity, the region is being battered by a global slump in demand and a high cost base, which has led to collapsing margins and a wave of capacity closures across Europe.

Thumbnail photo: Evonik’s Essen, Germany, campus. Source: Evonik