Evonik revamps animal nutrition operating structure, looks to shed 200 jobs

03-Apr-2023 - Last updated on 10-Jul-2023 at 14:52 GMT

German specialty chemicals business, Evonik, is separating its amino acids and specialties businesses into two distinct operating models; it says the move will allow it to adapt to market dynamics, ensuring competitiveness and enabling further profitable growth.

The company is also optimizing the production setup for the manufacture of its DL-methionine product, MetAMINO, at its three global production hubs, with it looking to improve the ecological footprint at those facilities too.

The measures to adjust operating models and optimize production will result in cost savings of €200m (US$217.6m) with a percentage of those gains being realized in the current year, and the full amount in the 2025 fiscal year, reported Evonik. Its animal nutrition business will also see a reduction of around 200 jobs worldwide.

When asked whether the division was challenged financially, a spokesperson for Evonik told FeedNavigator:

“Animal nutrition is a strong and profitable business for Evonik. The market is undergoing structural changes, and it is important that the company, as one leader in this market, adapts its operating model in accordance with the industry. The setup of two dedicated operating models for amino acids and specialties is a logical consequence.”

The market environment for amino acids is characterized by unchanged sturdy growth and an attractive sustainability profile but it is also challenged by rising raw material and energy costs, explained the firm.

Evonik said it is targeting a streamlined amino acids operating model focused on efficiency and cost-leadership. “This go-to-market approach will be characterized by a lean sales organization with strong digital competence and processes to benefit the customer.”

The specialty nutrition division includes functional feed additives and digital tools; that will be developed into a business with system solutions and specialties for poultry, swine, and ruminants. “We will focus on new product developments and offerings through partnering with industry leaders, i.e., phytogenics," said the spokesperson.

In terms of the proposed job cuts, the Evonik representative said the company was currently in negotiation with employee representatives.

Methionine hubs

In the US, a new plant for the production of MetAMINO precursor, methyl mercaptan, is currently being built at the methionine hub in Mobile, Alabama. The company said this will further strengthen Evonik’s ability to offer dependable and cost-optimized supply. Additionally, it will reduce the carbon footprint of MetAMINO from the site by approximately 7%.

In Singapore, Evonik is investing in process optimization, and it outlined how this measure will result in an improved cost position and an annual capacity expansion of 40,000 metric tons – leading to a total of close to 340,000 metric tons per year. It will also lead to a 6% reduction of the site’s methionine production carbon footprint.

Additionally, in 2022, it further developed and expanded the production facility for methylmercapto-propionaldehyde (MMP) in Wesseling, Germany, which it said reinforced the European methionine hub in Antwerp, Belgium.