There should be no layoffs: At Evonik, 3,000 jobs will be lost through sales

There should be no layoffs

At Evonik, 3,000 jobs will be lost through sales

The Essen group wants to dissolve a division through sales. There will be no layoffs for operational reasons. As chemical president, Evonik boss Kullmann warns of a gas embargo: Germany could do without Russian gas by mid-2024 at the earliest.

The chemical company Evonik wants to reposition itself. The volatile Performance Materials division is to be “dissolved over time through sales,” announced Group CEO Christian Kullmann. Evonik wants to separate from the C4 business, which produces basic chemicals in Marl and Antwerp. A total of around 1000 employees are affected. The plant in Lülsdorf south of Cologne is also to be sold, with 600 employees leaving the group. In addition, Evonik is splitting off the business with absorbers for diapers (Baby Care), which has 700 employees. A total of around 3,000 jobs will be lost within the group. Since 2017, the group has cut more than 7,000 jobs worldwide. It currently employs 33,000 people.

“As long as I am CEO, there will be no redundancies at Evonik. We always make job cuts socially acceptable,” announced Kullmann, whose contract runs until 2027. By then, Evonik should become the “best specialty chemicals company in the world”. “We are concentrating even more on specialty chemicals: We are investing in businesses that are highly profitable and less cyclical.” In the future there will only be three divisions in whose growth the Group intends to invest further: Smart Materials, Special Additives, and Nutrition&Care. With regard to its important product methione, Kullmann said: “In the business with the feed additive methionine, it is not enough to be the world market leader. The important thing here is that we have to be cost leaders.”

Evonik wants to invest eight billion euros by 2030, three billion of which will be in what Kullmann calls “next generation solutions” – products that are sustainable and help customers to become climate-neutral.

Evonik also wants to become more climate-friendly. “So far, our goal has been to make the CO2– Halve emissions from 2008 to 2025. We have almost achieved that. By 2030, we want to reduce our CO by another 25 percent2-Reduce emissions. This target relates to the base year 2021.” For comparison: the other chemical companies in NRW have more ambitious targets. Lanxess wants to be climate neutral by 2040, Covestro by 2035 and Bayer by 2030. “We have our CO2-Aim deliberately set in such a way that it can be achieved. I don’t promise anything I can’t keep,” said Kullmann. The sustainability goals would also become part of the remuneration system for the board and the 150 top executives.

In his capacity as President of the German Chemical Industry Association (VCI), Kullmann urgently warned against a gas embargo by the West: “The loss of prosperity, added value and jobs would be dramatic. You can’t just shut down chemical plants.” He sharply criticized Veronika Grimm’s economic practice, who considers an embargo to be feasible: “These are Grimm’s fairy tales. This has nothing to do with science. Ms. Grimm ignores the secondary and tertiary effects of an embargo. Chemistry is at the beginning of 90 percent of all value chains.”

Kullmann praised Federal Minister of Economics Robert Habeck (Greens): “He has to endure a lot and has an eye on the responsibility for the economy and society.” He also emphasized: “All chemical companies are preparing for worst-case scenarios. But we need time to adjust. Germany could do without Russian gas by mid-2024.” In order to achieve this goal, the permits would have to be issued more quickly and companies would have to be given tax relief, and the price of electricity for energy-intensive industry would have to fall. “In Germany we need six years for a wind turbine, in that time Beijing is building a new national airport.”

The federal government has announced the first stage of the gas emergency plan. Ways are currently being sought to distribute gas that is becoming increasingly scarce. The Federal Network Agency has written to 2,500 companies that have a high demand for gas. According to observers, should Putin turn off the gas tap, pricing models will not get you anywhere, and the system will have to be switched off. “The network agency, the federal government and industry are in close contact,” said Kullmann.

A particular problem is that when supplies stop, the gas flows have to change direction: gas is currently flowing from Russia to the west. In the event of a delivery stop, the flows would have to flow from west to east, since the liquefied gas would land in the western European countries and Germany’s eastern neighbors would also have to be supplied.

Evonik is reducing its activities in Russia: “Methionine is on the list of the sixth EU sanctions package.” In addition, because of the war, the logistics to Russia hardly work anymore. Evonik had sales of around 200 million euros in Russia in 2021, currently has around 50 sales employees there, but no production facilities.

Kullmann also said a few sentences about the state elections: “NRW Prime Minister Hendrik Wüst is doing a decent job.” She has what it takes.”

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