Evonik to build new production in Shanghai

Evonik Industries AG, the German specialty chemicals producer, will expand its silicone production platforms in Shanghai to meet growing demand in Asian markets.

The company said total investments for the project will be in the dozens of millions of euros. The groundbreaking for the Shanghai facility is being held on March 22.

Production will start in mid-2017. The market for specialty silicones has grown in recent years, mainly driven by the construction, textiles, coating, furniture and appliances industries.

According to Evonik, specialty silicones offer an enormous wide range of applications for numerous industries. For example, as additives for plastics, specialty silicones are responsible for comfortable furniture, car seats and ergonomic mattresses.

They also play an important role within the formulation of ideal insulation material for building insulation and guarantee high energy efficiency of refrigerators. Other areas of application are defoaming agents, used in industries like construction, textile or plastics. Furthermore, specialty silicones are used in coatings and inks.

"Evonik is one of the world's leading manufacturers of specialty silicones," said Hans-Josef Ritzert, member of the board of management, Evonik Nutrition & Care GmbH. "With production network in China, Germany and the US, Evonik wants to complement the growth of customers in the markets. We position ourselves as a long-term, innovation-driven, reliable supplier and partner."

Evonik posted strong financial results last year in a weak global economy. Its sales revenue rose 5 percent year-on-year to 13.5 billion euros ($15.02 billion).

"Our strategy of investing vigorously in organic growth, in other words, in new production capacities and innovations, has paid off for the company and its shareholders," said Klaus Engel, chairman of the executive board of Evonik.

"Thanks to our understanding of customers' specific requirements, we are able to provide them with tailor-made products and solutions," Engel said.

The company is optimistic about demand this year though the start of 2016 was marked by weak global economic momentum, high market volatility and an increase in geopolitical tension. Demand for its products will remain high due to its strong market position and concentration on high-growth businesses. But growth in volume will be overcompensated by declining prices, resulting in a slight drop in sales in 2016.

Evonik forecasted that adjusted EBITDA is expected to be between 2 billion euros and 2.2 billion euros this year. The 2015 figure was 2.47 billion euros.

The company's management has taken actions to fight against a possible drop in business. "Although the global business environment further deteriorated at the turn of the year, we will continue to utilize growth opportunities systematically in 2016," Engel said.

Evonik plans to upgrade its production capacity for amino acid methionine. Evonik's supervisory board gave the green light for pre-engineering work on a methionine facility in Singapore earlier this month.

Evonik also acquired Med-Palett AS, the producer of nutritional supplements in Norway, to strengthen businesses in ingredients for foods and pharmaceuticals.

Evonik is also expanding into other business and plans to build a new spinning plant for hollow fibers for the manufacture of membrane modules for energy-efficient gas separation in Schorfling, Austria.

zhuanti@chinadaily.com.cn

(China Daily 03/22/2016 page11)