German chemical producer Evonik is kick-starting its entry to the digital business world with  a new wholly owned new subsidiary, Evonik Digital, aimed at developing new digital business models and building up in-house digital expertise.

Christian Kullmann, deputy chairman of Essen group’s managing board with responsibility for the digitalization strategy, said that, along with finding new technologies, having a dedicated company will create opportunities for collaboration and production, while giving rise to new business models and marketing options. “Evonik is taking a pioneering role in the chemical industry here,” he said.

As digitalization is giving rise to change globally, and not only in business with direct customers and consumers, there have been profound changes across production and supply networks, the German group points out. In its view, a digitalization initiative cutting across organizational units will strengthen competitiveness and distinguish Evonik clearly from other companies.  “We recognized early on the opportunities that digital business models could offer, and we’re very systematically organizing the necessary changes in the company,” Kullman said

The new subsidiary, which started operation at the beginning of 2016, has its offices and facilities in the center of Essen.  The 20-member team of experts with competence in a broad number of fields is led by Henrik Hahn, who holds the newly created position of Chief Digital Officer (CDO) of Evonik and chairman of the managing board of Evonik Digital. He will coordinate digitalization activities and form a central contact point for technical dialog as well as strategy.

Evonik Digital will have a high degree of freedom to develop novel digital concepts and solutions, test them and help them get off the ground, Hahn said, adding that collaboration with renowned technology companies and promising start-up companies “will play a crucial role” in its activities. The company will work jointly with the parent company’s business lines to identify digital business ideas throughout the entire group and provide strong support in their implementation.

First concrete results of the new digital company’s work are to be presented over the course of 2017. Current pilot projects include platform approaches for e-commerce and the topic of do-it-yourself sensor technology. This should provide an improved understanding of the needs of customers early on, for example in product development, Evonik said.