"Evonik has delegated greater authority to Singapore, by setting up the regional management hub for Asia in the country."
Could you give a sense of the significance of Singapore for Evonik, and highlight some recent milestones in the company’s evolution in the region?
In July 2020, Evonik unveiled our new group structure which makes Singapore not only the headquarters of Southeast Asia, Australia and New Zealand (SEAANZ), but also the headquarters for Asia. Evonik also delegated greater authority to Singapore, by setting up the regional management hub for Asia in the country.
Evonik has five plants in Singapore. This includes the two world-scale production complexes for essential amino acid DL-methionine and an oil additives production site on Jurong Island. It also comprises of two more specialty chemicals plants in Tuas – one for epoxy curing agent, ink and hotmelt resin and polyurethane catalyst blends, as well as another catalyst plant from our recent acquisition of the Porocel Group in the US.
Singapore also plays an important innovation role: In 2018, we inaugurated our first research hub here in Asia. We decided to make this investment because we see Singapore has the ideal open innovation environment with skilled talents. Also, Singapore offers a great logistics gateway.
As a recent milestone and another mark of our commitment to the country, we officially launched our Digital Labs Asia in 2020. We now have a designated team of scientists that look at AI and advanced digital tools to better explore the growth potential in the region and to optimize our processes.
What attracts chemical leaders like Evonik to Singapore?
To live up to Evonik’s purpose of “Leading Beyond Chemistry” in the specialty chemicals space, innovation, intellectual property and technology are quintessential to success. These attributes make Singapore very attractive. Culture wise, the similarities between Singapore and European countries also make investments in the country more appealing. Finally, Singapore gathers the best international talent that complements its domestic well-educated workforce.
Could you comment on the 2020 company’s performance at a global and APAC level?
Evonik was one of the few companies to announce its adjusted targets early in 2020. Our expected sales for the year were between €11.5 and €13 bn, with an EBITDA of €1.7 to €2.1 bn. According to our recently released financial report, our sales in 2020 were €12.2 bn and our adjusted EBITDA was €1.9 bn. Evonik also reported a very strong free cash flow of €780 million, a fantastic improvement compared to €472 million in 2019. Across our divisions, Nutrition and Care was the frontrunner with a net growth globally, followed by Smart Materials and Specialty Additives. For 2021, the expectation for adjusted EBITDA is between €2 and €2.3 bn. APAC performed the best compared to other regions.
Evonik generates 35% of sales from products with a sustainability edge. Could you elaborate on how Evonik integrates sustainability in its business strategy and its operations?
Sustainability has become a highly talked about issue nowadays, but Evonik started earlier. Starting with our suppliers, we looked at the source of our raw materials and the emissions associated with their production. We began this as a founding member of the “Together for Sustainability” initiative 10 years ago. Next, for our production, we introduced an internal carbon emissions price system to stay on top of our targets. Rather than establishing targets in the far future, we set clear, tangible targets like cutting carbon emissions by 50% between 2008 and 2025. Finally, our products offer solutions to our customers to reduce their own environmental footprint.
For example, Evonik is a pioneer in green membrane technology for biogas (biomethane) separation. Through our membrane-based biogas separation technology, we provide a climate-friendly energy source for the future. In another example, our products used in insulation for buildings help reduce energy consumption by driving down the use of AC.
Evonik highlighted six innovation growth fields to generate additional sales of €1 bn by 2025. Could you share more details?
As a technology-based company, innovation is a cornerstone of who we are at Evonik. The six innovation growth fields are sustainable nutrition, healthcare solutions, advanced food ingredients, membranes, cosmetics, and additives manufacturing. Our innovation strategy is heavily focused on biotechnology and is shaped under a sustainability mindset.
Do you have a final message?
I firmly believe the world will be dramatically changed after the pandemic. Compared to the 2008 financial crisis, sustainability and digitalization are now taken much more seriously. This is an opportunity for companies not just to derive more business value, but also to contribute more to society.