Essential - At the heart of most chemical reactions is a catalyst, and given their complex nature, it's not always an easy task to find the right one. As a global supplier for catalytic system solutions, Evonik has been working to establish itself as a leader in the field, most recently through building a new plant in China and acquiring assets in Germany and India. Brandi Schuster and Dr. Michael Reubold spoke to Dr. Wilfried Eul, Senior Vice President of Evonik's catalyst business, about the company's recent strategic moves, opportunities in the market and technological progress.

CHEManager Europe: Dr. Eul, in February, Evonik bought H.C. Starck's catalyst business; in June, you also took over Indian Ravindra Heraeus' precious metal powder catalysts business. How are you integrating these businesses into Evonik's catalysts group?

W. Eul: From H.C. Starck we bought the activated base metal catalyst business, and from Ravindra Heraeus in India we have acquired their precious metal powder catalyst business. With H.C. Starck we have entered into a toll manufacturing agreement during the transition period - they will continue to manufacture the catalysts at their site in Laufenburg, Germany, until we have transferred all of the production formulations to our plant in Hanau, Germany. We expect this to be completed by early 2011.

Will Evonik need to build new capacity for these catalysts?

W. Eul: No - we have sufficient capacity to integrate the business. Nevertheless, we also acquired some special technologies and some special catalysts which will complement our portfolio of technologies and gives us more flexibility in terms of applications for serving the customer base with activated base metal catalysts.

And the Ravindra Heraeus business?

W. Eul: The acquisition of the Ravindra Heraeus precious metal powder catalysts business was the second step of a deal we did with Heraeus in 2005, when we acquired major parts of their corresponding North American and the European precious metal powder catalysts business. As part of the transaction we have established a partnership with Heraeus covering a significant part of our global precious metal recycling from spent catalysts.
We did not acquire any production assets in India, just the customer list. Ravindra Heraeus will toll manufacture all the catalysts we need in the Indian market, and they will also do the precious metal recycling from spent catalysts.

What are the advantages of having a partner who takes care of your precious metal recycling?

W. Eul: In precious metal powder catalysts, it is important to close the precious metal loop in the country or region and offer recycling services via a reliable and experienced partner to the customers. In many countries or regions of the world it is a difficult undertaking to import precious metals or precious metal catalysts and then to export the spent catalysts - which are very often considered hazardous waste - for recycling of the precious metal. It is therefore important to have a closed precious metal loop in big markets such as India, China, North America, Europe, etc.
This also means it is important to have the catalysts produced in the same country where you recycle the precious metal.

How important is the Asian market for your business?

W. Eul: The worldwide growth rate for precious metal powder catalysts is about 2-3%. In China and India we see double the growth rate, thanks to their booming fine chemical and pharmaceutical markets - the main outlets for these catalysts. Leading pharmaceutical companies are shifting their production into Asia, and they require the suppliers to follow them.
We also just recently opened our new facility for precious metal powder catalysts in Shanghai. Here we also work together with Heraeus, which enables us to have a closed loop for precious metals in China. The new facility allows us to cater the Chinese market directly from a local source.
With the recent acquisitions and investments in Asia we accomplished our mission to offer state of the art Precious Metal catalyst technology accompanied by a full Precious Metal Loop in all developed and emerging regions on the planet.

Many industry sectors, such as fine and specialty chemicals, have been concerned for years about Asian competition becoming stronger, and many fear that their intellectual property could be compromised.

W. Eul: The situation is somewhat different in the catalysts business. Catalysts are really the core know-how of chemical processes, and companies are very careful when choosing their partners. Very few Western or Japanese customers would give any catalyst know-how to producers or into regions where they have concerns about the IP security.

How can a company do business in Asia and still have peace of mind that their IP is safe?

W. Eul: For Evonik, it is important that our staff is loyal, and this is achieved by selecting them carefully and treating them well. Secondly, we have implemented mechanisms to protect our know-how. However, local companies in Asia are starting up and may try to pick up know-how wherever they can find it. They may catch up with us, mostly with standardized products, but in catalysts it takes longer than in the production standard chemicals - and we have to maintain the speed of innovation to stay ahead.

What are your expectations in homogeneous catalysts, which are also part of your portfolio?

W. Eul: The market is still in a formation stage and requires very specific tailor-made catalysts and significant screening and testing resources. Successful applications will be best developed by entering into partnerships.
For CX-coupling reactions and asymmetric hydrogenations, we have teamed up with Solvias, a leading company in providing customer solutions to the life sciences industry. We have granted them in 2008 an exclusive license for our cataCXium and catASium product families.
A hot topic is olefin metathesis, which has emerged as a powerful tool that is opening unique industrial routes for the production of petrochemicals, polymers, specialty chemicals and pharmaceuticals. Core asset here is an unambiguous and firm IP position, a transparent customer friendly, and a royalty-free business model as Evonik offers it for the catMETium product family. In such emerging markets you also need the determination and power to protect your own IP-rights to the benefit of the customers. Recently we settled a patent issue with Elevance Renewables Sciences and turned this into a cooperation in the field of generating specialty chemicals from an oleo chemical natural feedstock.

The demand for olefin polymerization catalysts is also increasing, especially now that polypropylene is being substituted for more and more other polymers in different applications. Has this lead to a demand for new catalytic technologies?

W. Eul: Yes. The polyolefin market is growing at a rate of about 5% p.a. This has translated into an increase in the demand for Ziegler-Natta catalysts and catalyst components. This is a very complex technology, and customers demand a lot of innovation and support. There are also new technologies based on metallocenes and single-site catalysts. We are working with customers on an exclusive basis in this area of polyolefin catalysts to help them developing improved or new generations of catalysts.

So this field is growing as much as the life sciences sector?

W. Eul: Yes. There is a lot of new polypropylene or polyolefin capacity coming on stream in the Middle East, China and India. According to industry experts, we may see significant overcapacity in the market at some point, but until today the growth rate is still strong.

What other areas are important for your customers?

W. Eul: Something very important for our customers is our service in high-throughput catalyst preparation for fixed-bed catalysts and high-throughput catalyst screening. Here we help customers to identify the optimal catalyst in a short period of time. This is the basis for fast tracking catalyst development projects and moving quickly into up-scaling and production within a given timeline.

How have high-throughput screening and other new technologies given a boost to catalyst development?

W. Eul: Today you can screen a number of catalysts and /or enhance their performance in a relatively short period of time, much faster than it was possible 15 or 20 years ago. Back then, it took years to improve a catalyst - now, each time you change a fixed-bed catalyst in your production plant you may already have an improved catalyst generation.. There is a large number of parameters that have to be screened in order to find the right catalysts or improve existing catalysts- in the end, finding the right one is the art of combining good science with the unavoidable trial and error approach.

How is your production set-up for fixed bed catalysts?

W. Eul: We are well known in the market for taking customer developed catalyst recipes with challenging time lines through our scale-up plants to commercial manufacturing at one of our sites. A versatile set-up of equipment capacities and catalyst manufacturing technologies from 100 kg to several thousand tonnes per year give us sufficient flexibility. Our toll manufacturing business for established catalysts allows leveraging large scale capacity and technological competence.

Are fixed-bed catalysts an area in which you see chances for growth?

W. Eul: There is good growth potential in the fixed-bed /continuous process catalyst area. Evonik has leading positions in certain catalyst application fields for chemical or petrochemical production processes. We are expanding our technological spectrum to generate more value for our customers. You can either develop such technologies on your own, you partner with a customer or you acquire a company who has already the market access or the know-how for a certain catalyst technology.

So Evonik is constantly working on new developments, yet always has an eye out on the market?

W. Eul: We do both. We focus on new catalyst developments in areas such as bio based chemicals, either on an exclusive basis with selected customers, or as a technology platform offering the catalysts to the general market. Developing new technology platforms takes a lot of time and resources. Therefore we constantly look for partnerships or acquisitions in relevant technologies or market access.

Are there any potential acquisitions on the horizon for Evonik?

W. Eul: We are constantly looking for potential acquisitions - if they have the right size and the right fit, be it technology, market access or regional set-up. At the same time, we are focused on organic growth through developing and manufacturing catalysts growing with the general market and convincing the customers with the competitiveness and quality of our products and our services.