Evonik Industries AG

Evonik Industries AG Overview

Company Headquarters: Essen, Germany

Founded: 2007

Workforce: ~36,043

Company Working: Evonik Industries AG (Evonik Industries) is one of the leading producers of sodium methylate in the world. It is the largest specialty chemical company and has production sites in 28 countries across the globe. Evonik Industries operates through the following business segments—resource efficiency, nutrition & care, services, and performance materials. The company produces sodium methylate under the performance materials business segment. The company marks presence in 100 countries across Asia-Pacific, North America, Europe, and Africa.

It has three major production sites in the US, Germany, and Argentina, with an annual production capacity of approximately 200 kilotons to ensure optimal deliveries of sodium methylate. The company held assets worth USD 23,952.13 million in 2018.

Strategy

Evonik Industries AG aims at increasing value of the company by focusing on three areas- product portfolio, innovation, and corporate culture. Under its portfolio strategy, the company strives to continuously expand its growth in business areas, including specialty additives, health care, smart materials, and animal nutrition. Under its innovation strategy, the company focuses on developing customer-focused and sustainable products by working closely with customers and external partners.

Company Snapshot

$14.98M

Revenue

36,043

Employees

2007

Founded

Essen, Germany

Headquarters

SWOT Analysis

Strengths

High production capacity
Wide presence in the European market
Wide presence
Robust R&D
Backward integrated production of polyamide 12
Strong presence across various regions, such as Western Europe, North America, and Asia-Pacific
Significant spending on R&D to meet the increasing demands
Leading player in the global market
EBITDA margin increased to 17.3% in 2018 from 2017
Free cash flow of USD 772.8 million
Growing leadership in the specialty chemicals segment
Highly equipped research & development facility
Strong domestic demand for specialty chemicals
Capital expenditure USD 1.02 billion
Free cash flow USD 772.8 million
EBITDA margin improved to 17.3%
▪ Holds 26,000 patents
Diverse product portfolio
Global presence in the market
Strong strategic merger and acquisition
Broad Product Portfolio
Adoption of advanced technologies
Wide product portfolio
Strong presence in the Western Europe, North American, and Asia-Pacific markets
Total assets worth USD 22,524.81 million in 2017
Broad product portfolio

Weaknesses

Limited presence in the developing regions
Declining profitability (In 2017, the company’s operating margin was 8.5% as compared to 10.2% in 2016.)
Dependence on a few suppliers for different raw materials
Net debt of USD 3,433 million in 2018
Supplier driven distribution channel
Reliance on raw material suppliers
Discontinued methacrylates business segment
Law suits & allegations
Fluctuations in the availability of raw materials
Dependent on raw material suppliers
Law suits and allegations

Opportunities

Collaborations and mergers for the production of isobutylene
Growth of the 3D printing industry
Strategic acquisitions and expansion through new alliances and agreements in the automotive plastic market
Product development
Increasing number of supplier collaborations for distribution channel
Increasing revenue from sales and finance market
Strategic acquisitions
Digitalization in pharmaceutical industry
Rising demand of sustainable development
Expansion of oil & gas industry in Latin America
Strengthening the marketing operations
Significant spending on R&D and product development
Expansion of the oil & gas industry in Latin America

Threats

Currency fluctuation risks
Stringent environmental and health regulations
Intense competition from players such as Arkema and UBE Industries Inc.
Volatile raw material prices and increasing energy cost
Fluctuating currency exchange rates
Trade disputes between the European Union and the UK after Brexit
Stringent environment regulation, which is selling operating cost
Fluctuating exchange rates
Escalation of the trade disputes between the European Union and UK after Brexit
Intense competition from the players in Asia-Pacific
Foreign exchange risks
Increasing threat of cyberattack
Trade dispute between US and China
Intense competition
Negative or uncertain worldwide or regional economic conditions or trade relations may adversely impact the business
Stringent REACH regulations
Foreign exchange rate risks

Key Developments

Date	Approach	Development
September 2018	Expansion	Evonik Industries AG completed its expansion of contract manufacturing capabilities in the US and Europe. This expansion will aid the company in enhancing the portfolio and increase the production capabilities of advanced technologies, including HPAPI, fermentation, continuous processing, and others.
20 August 2018	Joint Venture	Evonik and Wynca, a Chinese company, formed a joint venture for the production of fumed silica. Evonik will hold 60% in Wync, which will produce fumed silica that would be marketed under the name AEROSIL.
09 December 2016	Acquisition	Evonik Industries AG acquired the silica business of the US-based company J.M. Huber for USD 630 million. This acquisition enabled Evonik to expand its presence in North America and Asia.
14 March 2014	Expansion	Evonik opened a new production plant for precipitated silica in Rayong, Thailand. With this investment, it increased its capacity for precipitated silica for the automotive, food and animal feed, as well as paints and coatings industries.

Product Offering

Evonik Industries AG
- Global Oilfield Biocides Market
- POLYVEST® 110
- POLYVEST® 130
- POLYVEST® EP MA 100
- POLYVEST® ST-E 60
- POLYVEST® HT

Financial Performance

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