Add Evonik to the list of corporate giants that prefers other, higher-growth, businesses to plastics. According to a report from Reuters, CEO Klaus Engel said that results from its Specialty Materials businesses are below expectations and that the company is on the lookout for potential spinoffs or partnerships.
Evonik, created in 2007 and owned by RAG Foundation and a financial fund, is an amalgam of well-known brand names in the specialty chemicals and plastics industries: Röhm & Haas, Degussa, BYK-Chemie, Boehringer, Hüls, and Goldschmidt.
At the heart of Evonik’s Specialty Materials unit are methylmethacrylate chemistry (MMA) and polyamide 12, an engineering plastic that made headlines two years ago when an explosion at a plant in Marl, Germany removed the sole source for many automotive customers. Evonik also produces polyetherether ketone (PEEK) and polyimides. Sales were around €1.8 billion ($2.4 billion) in 2013.
One of Evonik’s problems is its second-fiddle position. Victrex is a clear leader in PEEK, and Solvay has made a major play in the engineering plastic. Arkema is number one is specialty polyamides and a formidable competitor in clear acrylic sheet.
GE famously sold its engineering plastics business (very different portfolio) to SABIC in 2007 for $11.6 billion. SABIC also bought DSM’s polyethylene and polypropylene businesses in Europe in 2002. It has been reported that Bayer, like DSM and now Evonik, wants to focus on higher-growth, life sciences businesses.