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Innovation drives growth at Evonik

• New products and business models add fresh impetus to the Group
• Value of innovation pipeline increased by a third over the past five years
• Digital technology are further boosting innovation

Schwager intends to quickly implement these business plans to generate additional sales from the value of the project pipeline. “We have to bring our innovation projects to customers in faster, even more targeted ways. We will achieve that with greater efficiency in research and development, working in close collaboration with our customers,” he said. In the intermediate term, Evonik’s goal is to increase the sales share from products and applications developed in the past five years to sixteen percent. This portion is currently ten percent.

Evonik wants to increasingly support customer success with digital technologies. The company announced this summer that it would make around €100 million available for digitalization projects. “Our focus is on new business models as well as bespoke solutions and services for customers. Digital change will be an essential innovation driver, moving through the supply chain to reach our customers’ industries,” Schwager emphasized.

Research & development expenses will remain at a high level with over €400 million per year. However, Schwager does not consider research an end in itself. “It must occur in a targeted way in projects that promise more business and growth – in the short, intermediate and long term.” Accordingly, some ninety percent of funds are invested in the research efforts of the operative segments, and specifically in businesses with particularly high growth potential. The revenue share of R&D expenses (R&D ratio) in these businesses is already between 4 and 6 percent. Throughout the Group, the R&D ratio exceeds 3 percent.

“Innovation is the key to securing and expanding our market positions. On top of that, we are focusing on areas that will generate new business for us, driven by innovation,” says Ulrich Küsthardt, Chief Innovation Officer. Evonik places particular emphasis on six innovation growth fields: Sustainable Nutrition, Healthcare Solutions, Advanced Food Ingredients, Membranes, Cosmetic Solutions und Additive Manufacturing. Each of them is backed up by a clear strategy with business objectives, market goals and business models, up to and including the acquisition of competencies. “The innovations from these fields will generate another €1 billion in sales by the year 2025,” Küsthardt explains.

Company information

Evonik, the creative industrial group from Germany, is one of the world leaders in specialty chemicals. Profitable growth and a sustained increase in the value of the company form the heart of Evonik’s corporate strategy. Its activities focus on the key megatrends health, nutrition, resource efficiency and globalization. Evonik benefits specifically from its innovative prowess and integrated technology platforms. Evonik is active in over 100 countries around the world with more than 35,000 employees. In fiscal 2016 the enterprise generated sales of around €12.7 billion and an operating profit (adjusted EBITDA) of about €2.165 billion.

Evonik’s international activities are organized into six regions. The Asia Pacific North region consists of China, Taiwan, Japan & Korea, and is headquartered in Shanghai. Sales in Asia Pacific North reached 1,947 million euros in 2016. Evonik regards China as one of the driving forces of the global economy and we consequently endeavour to grow our business here. The company now employs about 3,000 employees and has in total of 10 production sites in China.