"We already achieved €500m in sales in 2021. Evonik places particular emphasis on our six innovation growth fields – Sustainable Nutrition, Healthcare Solutions, Advanced Food Ingredients, Membranes, Cosmetic Solutions and Additive Manufacturing."
Could you share the highlights of Evonik’s 2021 financial performance?
2021 brought outstanding results for Evonik. Globally, we closed the year with almost €15 billion in sales, a 23% increase from the previous year. Cashflow also rose by 22% to €950 million, a near historical high. Despite significant challenges in raw material supply chains, our EBITDA grew by 25%. Due to current developments – including the Chinese lockdowns – Evonik may need to adjust the forecast for this year, but right now we are projecting 2022 figures to be significantly higher compared to 2021. In our outlook, we expect an EBITDA between €2.5 and €2.6 billion. The preliminary results for the first quarter indicate that our adjusted EBITDA grew by 25% to €735 million. Year-on-year sales also soared by 34% in the first three months.
Could you elaborate on what underpins growth in APAC, specifically, and what have been the latest developments at Evonik in the region?
Asia represents close to a fourth of Evonik’s total sales and we hardly saw any slowdown in 2020, even as other regions saw a dip in sales. Against this strong 2020 baseline, we had a very healthy growth of 20% in APAC, with sales of €3.4 billion. What’s more, most of our sales come from a market-leading position. For instance, we increased our capacity for the specialty lipids production used in the mRNA vaccination technology of BioNTech. We are focused on using our mechanical and chemical recycling capabilities to support the company’s global circular plastics program. Last year, Evonik became a member of the Plastic Recycling Association Singapore (PRAS). Also last year, Evonik made the first Venture Capital investment in Singapore through Revivo BioSystems, a local start-up working on an alternative to animal testing for the development of chemical, cosmetic and pharmaceutical compounds.
What are the main pillars of Evonik’s strategy in the Nutrition and Care segment in APAC?
One of the most significant contributors to our success is the demand for our active ingredients for cosmetic applications. With four out of the six innovation fields Evonik has identified coming from Nutrition and Care, our priority is to develop more specialty chemicals that are closely attuned to our customers’ needs. Our roadmap for the region differs in each market, meeting individual local needs. In China, we focus on feed solutions for a large population, in Japan we collaborate with big pharma partners on drug delivery technologies. While in Korea, we see ourselves in niche, high-tech areas like 3D printing for medical devices, as well as in genetics and biosimilars. In Singapore, we house our tissue engineering hub.
Evonik set a goal to generate up to €1 bn in sales from innovative products by 2025. Could you give us more details about your innovation focus?
We are well on track towards this goal, as we already achieved €500m in sales in 2021. Evonik places particular emphasis on our six innovation growth fields – Sustainable Nutrition, Healthcare Solutions, Advanced Food Ingredients, Membranes, Cosmetic Solutions and Additive Manufacturing.
Our research hub activities in Singapore strongly supports the company’s innovation focus points. For example, the Additive Manufacturing team has conceptualized and invented a commercially ready product line – INFINAM®. It is a high-performance photopolymer resin that is used in industrial 3D printing applications, which is a sustainability-supporting technology, as it reduces waste and raw materials needed for such manufacturing. Furthermore, the lab’s recent Cell & Tissue Engineering center expansion is also supporting our innovation growth fields under Healthcare Solutions.
Singapore is our innovation hub for the entire region and we are growing our facilities here.
What is your outlook for the future of the chemical industry regarding the challenge of sustainability?
The chemical industry must work hard to prove its centrality as a contributor to sustainability. It has great potential in the area of developing green energy. However, the technology remains overly expensive. Governments must incentivize green energy production and Singapore’s dramatic increase in the carbon tax is the right approach to secure future investments. Big economies like China and India are setting examples of how to be supportive of hydrogen. South Korea is also taking steps to phase out fossil fuels by using hydrogen and ammonia as a feedstock for their thermal power generation. But it is still a long way to go before we have enough renewables to replace traditional energy sources.