- CEO says company must adjust to industry changes
- German site with 260 staff to close
- Non-core areas to be discontinued
BERLIN, Oct 11 (Reuters) - Germany's Evonik will scale back its adhesives and health care lines to focus on core assets, it said on Friday, shedding other operations including a polyester business and a production line for keto acids in Hanau.
The group, whose chemicals are used in products from autos and animal feed to Pfizer and BioNTech's COVID vaccine, in March announced up to 2,000 job cuts, the majority in Germany, by 2026 to reduce costs by 400 million euros ($437.3 million) annually.
Germany's chemicals industry suffered heavily throughout 2023 due to high production costs and weak demand as inflation rose, and the first signs of recovery seen in the first quarter of this year have begun to fade away.
"Our industry is undergoing fundamental structural change worldwide," said CEO Christian Kullmann. "We will align all our resources with our strongest businesses."
Evonik said on Friday its future health care business will focus on lipids for mRNA and gene therapies, drug delivery systems and cell culture ingredients. Its coating and adhesive resins business will consist of liquid polybutadienes and specialty acrylics.
Production of keto acids at the specialty chemical maker's site in Hanau, Germany, would be stopped at the end of next year, affecting some 260 employees, it added.
The company is still evaluating its options for its sites in France and China that are active in the same business, but will likely choose a partnership or divestment over closing them.
Evonik will also start looking this year for interested parties for its polyester business for coating and adhesive applications, which has turnover of about 150 million euros ($163.9 million), it said.
An existing polyolefins business that until now was under the Coating & Adhesive Resins business line will be transferred to Evonik's C4 chain business and sold as a part of it, it said.
($1 = 0.9147 euros)
Reporting by Anastasiia Kozlova, Amir Orusov and Miranda Murray, Editing by Friederike Heine, Rachel More and Jan Harvey
Source: Reuters