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Evonik committed to performance materials business

October 20, 2016
Chemical Value Chain

Evonik Industries’ performance materials segment remains an integral part of the group, says Johann-Caspar Gammelin, Evonik board member with responsibility for performance materials.

Speaking today at a press conference during the K 2016 trade fair, taking place in Düsseldorf, Germany, Gammelin said, “There are no plans whatsoever to sell the segment or to enter into a joint venture with another company.”

Evonik said in 2015 that it was reviewing the performance materials business and that options included forming partnerships and possibly divesting the business. The company announced plans earlier this year to acquire Air Products’ performance materials business.

Evonik’s financial performance is currently in line with its expectations, Gammelin says. Sales declined in the first half of 2016, as lower raw material costs filtered through to lower prices, to €6.3 billion from €6.9 billion one year earlier. But the margin remains relatively high at 18.1%, the company says. “We remain confident that we will be able to generate an adjusted EBITDA in the upper half of the given range of €2-2.2 billion for the entire year,” Gammelin says. Evonik is scheduled to publish third-quarter results on 4 November.

The performance materials business does not generate the same high margins as Evonik’s other segments—nutrition and care, and resource efficiency—but it remains profitable, Gammelin says. The company has been working to optimize its portfolio and the measures have started to yield results, he says. The performance materials business posted improved volumes and margins in the second quarter of this year.

Some portfolio-streamlining measures have taken place in Evonik’s agricultural chemicals and polymer additives business—part of the performance materials segment—including the closure of an extraction plant at Münchmünster, Germany.

The repositioning has also led to the closure of a polymethyl methacrylate (PMMA) site at Grammatneusiedl, Austria. But the repositioning has also seen the company invest in PMMA. Evonik is building a biaxial stretching plant for its Plexiglass PMMA, and a polishing and grinding facility, at Weiterstadt, Germany. The facility is expected to become operational in early 2018. “The company’s strategy is focusing on PMMA specialty products, and the new plant will offer new formats–twice the size of the dimensions generally available on the market—opening up opportunities for Evonik,” Gammelin says.

Evonik is also presenting at K 2016 products that illustrate the company’s focus on sustainability. Products showcased at the trade fair include a new type of Plexiglass that is so durable and impact resistant that it is suitable for use in non-transparent car body parts in the front and rear of the vehicle. Evonik’s nylon-12 and nylon-6,12 fuel-line system has been designed to meet an increasing use of alcohol in fuel lines. Applications in the medical segment include biocompatible polyether ether ketone that can be used for spinal implants, in orthopedics, in dental applications, and in pharmacy, Evonik says. The company is also exhibiting biobased nylon fibers, developed for the fashion industry and processed into fabrics with odor-reducing effects, among other traits. The fibers are 100% derived from castor oil seeds and have no adverse effect on the human food chain, Evonik says.

By Francinia Protti-Alvarez

Source: Chemical Week

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