Evonik Industries plans to reorganise the group structure

The Germany chemical major Evonil Industries AG is planning to reorganise the group structure to concentrate more on Evonik's strategic development within a management holding structure. The plan is make the three operating segments - Consumer, Health & Nutrition, Resource Efficiency, and Specialty Materials - three fully functional legal entities operating as limited liability companies (GmbH). This would give them far greater entrepreneurial independence, allowing more targeted management of their respective businesses, position them even closer to their markets and customers, and bring a further improvement in efficiency.
 
In the future, Evonik also intends to operate the present Site Services as a limited liability company (GmbH) with the involvement of the three operating segments. Further details of the planned new corporate structure will be worked out in the course of this year.
 
Klaus Engel, Chairman of Evonik's Executive Board, explained, “Through the planned reorganisation of the management and portfolio structure we want to create a better basis for more differentiated management of our various businesses close to the markets and for more focused development. That will increase our strategic flexibility and strengthen our leading competitive positions in the different markets."
 
The demands made on managing and running the three segments already differ considerably in line with their respective market requirements.
 
The business model for the Consumer, Health & Nutrition and Resource Efficiency segments is based on providing customised, individual, innovation-driven solutions, and they operate primarily in markets with high margins, growth rates and entry barriers. In these segments, above-average profitable growth should be generated mainly by selective investments and acquisitions.
 
As a more product-oriented, energy and raw material-intensive supplier, the Specialty Materials segment is characterised principally by integrated technology platforms and efficient processes. Evonik wants to raise efficiency and effectiveness further in order to strengthen these competitive advantages. In the future, investments and, where appropriate, alliances should concentrate on securing and extending its good market positions.
 
Engel said, “Through our Administration Excellence program last year we started to align Evonik's administrative workflows to the demands of specialty chemicals. Our latest plans are designed to pave the way for aligning Evonik's management model to the tougher competition in global markets."