German specialty chemicals producer Evonik announced last month that it is considering the sale of its methacrylates business. The company advised, though, that the divestment will not affect its oil additives business, which supplies lubricant additives.
The oil additives business is part of our strategic growth engine, Specialty additives, a spokesman told Lube Report. There are no plans at all to sell this business.
Evonik, which is based Essen, is a major global supplier of lubricant additive components. It uses methyl methacrylates to make polyalkyl methacrylates, the chemical foundation of its viscosity index improvers, pour point depressants, cold flow improvers and synthetic base stocks that it offers to the lubricants industry. Those products are marketed under the Viscoplex and Viscobase brand names. The spokesman suggested Evonik could enter a supply agreement with whoever buys the methacrylate production operations.
If anything, we will simply contract with the new owner to continue supplying methacrylate polymers.
Evonik makes methacrylate polymers at 18 sites that, according to its own data, have a combined capacity of 400,000 metric tons per year. They are part of Evoniks Performance Materials segment and in 2017 accounted for some 40 percent of its sales, or 1.5 billion. By comparison, the company as a whole recorded 14.4 billion euros in sales in 2017.
Going forward, the company intends to concentrate its efforts on the divisions with less low cyclical exposure, having identified specialty additives, healthcare, smart materials and animal nutrition as areas for growth.
We are systematically implementing our strategy of sharpening our focus on specialty chemicals, Chairman of the Executive Board Christian Kullmann said in a press release.
Speaking to Lube Report, a company spokesperson said internal preparations for the divestment are underway. There is no deadline, and the company is taking it step by step. The methacrylates business performed well last year and had a good start in 2018 as well. As such, we are not in a rush.
Performance Materials head Caspar Gammelin left the door open for other options for further development, such as partnerships. Our goal is to extend our technological edge and cost leadership. To achieve that, we will find partners and will make full use of our strengths, he was quoted as saying in the statement. Our methacrylates business has a leading competitive position and is profitable and attractive.
The spokesman, who asked not to be identified, added, While a full-scale divestment is our preferred option, we do not exclude the possibility of a future partnership. This would of course also depend on the future buyer. In short, we are still examining both paths.
The oil additives business is part of Evoniks Resource Efficiency segment, which was the companys best-performing branch last year. Sales jumped 66 percent year over year to reach 5.4 billion euros, benefitting in part from the January 2017 acquisition of United States company Air Products specialty additives business.