Germany-based Evonik is seeking to expand its footprint in North America and the US in particular, with a focus on its growth specialty segments. “Our focus for North America is on safety, people and growth,” said John Rolando, president of Evonik’s North America arm. “Resource Efficiency and Nutrition & Care are our growth businesses and where we will allocate most of our capital.”

Globally, the Resource Efficiency segment generated €5.39bn in sales and €1.17bn in adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) in 2017 for an EBITDA margin of 21.8%. Evonik’s Nutrition & Care segment had €4.51bn in sales and €747m in adjusted EBITDA for a margin of 16.6%. Its third segment, Performance Materials, posted €3.75bn in sales and €658m in adjusted EBITDA for a margin of 17.5%.

Within performance materials, Evonik is in the process of carving out its methacrylates business for divestment. Evonik is the #2 global player in both methyl methacrylate (MMA) and polymethyl methacrylate (PMMA) with sales of around €1.5bn in 2017. “In our portfolio, we want to become more balanced and more specialty,” Rolando said.

In North America, Evonik has grown rapidly in recent years, boosted by the $630m acquisition of J.M. Huber’s silicas business in September 2017 and the $3.8bn buyout of Air Products’ Performance Materials Division (PMD) in January 2017. Evonik had around €3.3bn in sales in North America in 2017. It operates 33 production sites, eight R&D centers and one medical device competency center with about 5,000 employees in total.

AUTOMOTIVE SILICAS EXPANSION

Within its Resource Efficiency segment, the company’s 60,000 tonne/year precipitated silicas project in Charleston, South Carolina, is on track for mechanical completion at the end of July 2018. The silicas will be targeted for automotive tyre and mechanical rubber applications.

“We’ll produce samples for qualification by customers and then ramp up to full-scale production by early 2019,” said Geoff Varga, senior vice president of Evonik’s Resource Efficiency segment in North America. These silicas are used to produce “green tyres” which have lower rolling resistance and thus higher fuel efficiency.

Varga said the specialty silicas can reduce rolling resistance in a tyre by around 30%, leading to about 8% lower fuel consumption and significantly lower CO2 emissions. They also improve tyre wet grip without compromising abrasion resistance (longevity), he noted.

The automotive silicas business should see multiple tailwinds – a high level of US auto sales, challenging US CAFE fuel efficiency standards even with the Trump administration seeking to slow down progress, a greater focus on safety and fuel efficiency in replacement tyres, and larger wheel and tyre sizes, said Varga. Lower rolling resistance tyres also give electric vehicles an increased range, he added.

“Silica saturation for tyres in North America remains far off. It is still replacing carbon black,” said Varga.

Evonik’s silicas business includes tyres, coatings and industrial specialties which were legacy Evonik, as well as dental and life science specialties from the J.M. Huber acquisition. The silicas market is growing at 4-6%/ year, Varga noted.

NUTRITION & CARE

Evonik’s Nutrition & Care segment is developing products in the personal care arena to meet consumer demands that are shifting towards natural ingredients, safety and sustainability, said Dave DelGuercio, senior vice president of the segment in North America.

This includes developing 100% biodegradable glycolipid surfactants from plant-based sugars for use in personal care cleansers. On the nutrition side, Evonik’s Veramaris joint venture with DSM is building a $200m facility in Blair, Nebraska, to produce Omega3 fatty acids from natural marine algae.

These nutrients will be used in aquaculture, being fed to salmon and shrimp to improve size, growth and quality of protein. The plant is scheduled to start up in 2019.

“Initial production capacity will meet 15% of the global demand for Omega-3 EPA and DHA in the salmon industry,” said DelGuercio.

MEDICAL DEVICE POLYMERS

Evonik is also developing high-value polymers and biomaterials for medical devices and implants. About 10% of Evonik’s total €458m in R&D spending is targeted at transformational innovations – essentially those with far-reaching and long-term impacts rather than quick commercial gains. Healthcare solutions is among the key areas for transformational innovation, and where the Evonik Medical Device Competency Center (MDCC) sits.

Evonik has developed polymeric medical implant materials that dissolve in the human body after a period of time, avoiding the need for a second surgery for implant removal. These polylactide and polycaprolactone materials can be used in orthopaedic devices such as screws, suture anchors and fracture plates.

The market for polymeric materials for medical devices is around $18bn globally, and growing at 19.7% annually, according to Balaji Prabhu, head of the Evonik MDCC in Birmingham, Alabama. “We want to be a preferred partner and solutions provider to the medical technology industry,” said Prabhu. “We aim to develop new materials, processing capabilities and new proprietary technologies, meeting the needs of the innovative medical device community.”

Evonik is also developing materials from polyether ether ketone (PEEK) that can be used to 3D print custom medical implants such as a jaw or skull fragments quickly for emergency surgeries.