Evonik targets €1 billion+ in circular economy sales
Evonik has revealed that it aims to generate at least €1 billion/year in additional sales a year from circular products and technologies, both in its own processes and support its customers in the transition to circular applications. The company’s strategy in this arena is based on multiple initiatives in which it claims that it is already contributing to the circular economy, notably:
* Further strengthening its activities in additives and specialities for the circular economy
* Making greater use of raw materials based on recycled materials, biomass and CO2
* Developing its own technologies for closing the loop or which use CO2 and biobased raw materials as feedstock
As part of this, Evonik has launched the group-wide ‘Circular Economy Programme. This replaces the Global Circular Plastics Programme that had been in place since 2020 and achieved sales from these activities of over more than €30 million. The new programme targets all value chains.
In its Q3 results presentation, Evonik announced a continued focus on “strict cost discipline” in the face of weak demand. Sales and EBITDA fell 23% and 21% respectively year-on-year, with volumes 5% down and prices 6% down. The company made a net loss of €96 million. However, EBTIDA was 8% up on Q2 because of cost controls.
In 2H 2022, Evonik began implementing such measures as not filling vacant positions, not using external service providers and cutting down on business travel. This has saved €175 million since 30 September, 70% of the target for 2023. The measures will continue in 2024.
The company has also just strategically reorganised two major units to focus resources more closely on the operating business of the three growth divisions. The Technology & Infrastructure division is being split into:
* Technology, which will “benefit from a global pooling of competencies independent of locations”
* Infrastructure, which will run the chemical parks in Marl and Wesseling, Germany, and Antwerp, Belgium, independently
* Evonik Tailor Made, which will have a new organisational design for faster decisions and more efficient processes regarding internal needs