Evonik to Sell or Partner Methacrylates
Evonik is weighing plans to exit its methacrylates business (MMA and PMMA). In explaining the decision at the annual results presentation in Essen, Germany, on Mar. 7, CEO Christian Kullmann said a systematic implementation of the company's strategy includes active portfolio management and sharpening the focus on specialty chemicals.
As growth engines, management has identified Specialty Additives, Animal Nutrition, Smart Materials, and Health & Care. Methacrylates are also enjoying healthy growth worldwide, but evidently are not considered a good fit with the more focused specialties.
Kullmann said options for the methacrylates business include a partnership or an outright sale. “Our MMA and PMMA businesses have leading competitive positions, and they are profitable and attractive,” he said. “We can therefore explore the options without time pressure and decide on the best solution.”
Analysts have estimated that the business with sales of around €1.5 billion and 3,700 employees at more than 18 sites in 2017 could be worth as much as €1.8 billion. Given the size of the business and the price, it is unclear who potential buyers might be.
In PMMA (acrylic sheet and mouding compounds), Evonik is counted among the three leading players, with a market share of 19-20%. The other two main players are Taiwan’s Chi Mei and Mitsubishi of Japan. Lucite and Arkema are Evonik’s European rivals. All three also produce in the US, along with DowDuPont.
A host of integrated Asian players produce both the monomer and the polymer. More than three-quarters of world output is seen to be concentrated in this region, where major manufacturers of LED screens for electronic devices are based. Market researchers see the market as poised for strong growth over the next ten years, boosted mainly by electronics applications.
The Middle East is also edging its way into the methacrylates business. Last year, a joint venture of SABIC and Mitsubishi Rayon started up a new gas-fed MMA/PMMA plant, claimed to be the world’s largest, at Jubail. The facility uses Lucite technology.
Evonik’s predecessors Degussa and Hüls were important methacrylates players prior to their merger in 1999. Degussa’s spun-off business, which traded as Agomer, was merged into the bigger Hüls subsidiary Röhm to create what at the time –was the global leader in PMMA and number 3 in MMA. Evonik is also a technology leader.
