Evonik to Invest More Than 4 Billion Euros in R&D

Stating that “Innovations are key drivers of sustained value creation at Evonik,” Klaus Engel, Evonik’s chairman of the Executive Board, reported that in fiscal year 2014, Evonik’s R&D spending amounted to €413 million, an increase of 5% over the previous year (€394 million). The R&D investment ratio was 3.2% (2013: 3.1%).
 
“Our intention is to turn Evonik into one of the world’s most innovative companies,” said Engel. “Innovations are a key element of our growth strategy.” noted
 
Evonik plans to invest more than €4 billion in R&D over the next decade. Engel referred to innovations as the “elixir of life” for the specialty chemicals industry: “Innovations open up new business areas and strengthen our leading market and technology positions.”
 
The company plans to significantly expand its innovation pipeline to keep up a steady flow of new products and solutions. Ulrich Küsthardt, who was appointed chief innovation officer at Evonik earlier this year, presented a three-point plan for this purpose. “We must become more focused in our projects, more international in our research, and more open in our exchange of knowledge,” said Küsthardt. The goal is to bring innovations to consumers with even greater speed and efficiency.
 
The Evonik R&D pipeline is filled with approximately 500 projects. Promising innovation areas for Evonik include ingredients for the cosmetics industry, membranes, specialty materials for medical technology, food supplements and animal feed additives as well as composite materials.
 
Küsthardt also plans to push for the expansion of international competence centers. Evonik already supports customers with tailored solutions in laboratories and pilot centers around the world. Thus, an R&D center for coating additives with locations in Singapore and Shanghai develops products for coatings and paint manufacturers in Asia. The company also maintains a technology center in Taiwan to advise customers from the Asian display industry, and its Medical Devices Project House in the U.S. is working on innovations in medical technology.
 
Evonik is deliberately opening up to external partners and cooperating with scientists and start-ups (Open Innovation), an effort Küsthardt plans to intensify further. This also includes corporate venture capital activities, for which a budget of some €100 million has been set aside. Such investments and shareholdings give Evonik insights into innovative technologies and businesses in the early development phases. The company’s latest acquisition is Nanocomp, a Finnish company that develops nano-optical structures for applications in 3D gesture recognition, medical technology, and displays.
 
The close connection between innovative power and proximity to customers is reflected in the breakdown of R&D spending. Some 80% goes to activities within the operative businesses, which are specifically aligned with their respective core technologies and markets. Another 10% is used by the operative units to research and develop new business. The remaining 10% goes to the strategic research of Evonik’s innovation unit, Creavis, for establishing new high-tech activities outside of the existing Group portfolio.
 
The large number of first-time patent applications filed by Evonik places the company at the forefront of the specialty chemicals sector. The company held over 25,000 patents and patent applications in 2014. Some 250 new patents were filed last year—the equivalent of almost one invention per business day. With some 2,600 Evonik employees working in research at 35 sites, the company has continuously increased the value of its patent portfolio over the past years.