Evonik of Germany Unfazed by Tariff, to Further Expand Investment in Asia

Claus Rettig, President of Evonik Asia Pacific, stated in an interview with ICIS that Evonik is accelerating investments in factories and R&D in Asia to achieve its growth objectives. At the same time, the company aims to mitigate the direct impact of U.S. tariffs by adopting a strategy of "local production to supply local markets."

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Evonik is undergoing a major strategic transformation, aiming to increase its adjusted EBITDA to 2.7 billion euros by 2027, up from 1.7 billion euros in 2023—a rise of 1 billion euros. According to Rettig, half of this increase (500 million euros) will come from growth, while the other half will result from cost reductions and other efficiency improvement measures.

Asia has been identified by Evonik as a key region for further investment, one example being its new alkoxides plant on Jurong Island in Singapore, which is Evonik's fifth plant in Singapore.

When deciding to build the alkoxide plant in Singapore, Rettig stated that Jurong Island already has existing infrastructure, making Singapore a logical choice for a base. This allows for cost savings and enables the company to serve customers in Indonesia and Malaysia, who typically purchase alkoxides from China and Saudi Arabia.

Indonesia's increasing emphasis on biodiesel production also brings opportunities for the company. Evonik hopes to raise the plant's operating rate to 100% by the end of 2026.

As of this year, Indonesia has implemented B40—a mandatory blend of 40% palm oil with diesel for domestic consumption—and plans to introduce B50 in the coming years.

In addition, this Singapore alcoholate plant with an annual capacity of 100,000 tons complements Evonik's three plants located in Germany, Argentina, and the United States, and is also its first "world-class" plant of this kind.

"Amid various uncertainties (geopolitical tensions), we hope to maintain a very balanced global layout," Rettig said.

Focus on Asia

As of 2024, sales in Asia account for only a quarter of Evonik's total sales, but the company plans for one third of its sales to come from the region by 2032, with about half of that from China.

Meanwhile, in 2024, Europe accounts for 45% of Zhan Ying Chuang's total sales, while the Americas account for approximately 30%.

"I don't think anyone will doubt that Asia is and will continue to be the fastest-growing region in the global chemical industry. This is why we are investing disproportionately in Asia to expand our influence in the region," Rettig said.

Although China remains the focus of Evonik's business in Asia, the company also targets India and Southeast Asia for growth. For example, new plants in India and Japan are expected to start operations by the end of this year, Rettig said.

Tariff Impact

The main service is for the factories in the respective country, which helps Evonik mitigate the direct risk from U.S. tariffs. U.S. tariffs are expected to reduce the global GDP growth rate from 3.2% in 2024 to 3.0% in 2025.

However, the indirect effects of geopolitical tensions are more difficult to quantify, Rettig said.

"It's actually difficult to determine exactly how much impact there will be," he said.

In any case, Evonik will continue to advance investments "based on fundamentals," and these fundamentals remain valid regardless of the presence of tariffs.

"Population growth, population aging, and the ever-growing middle class are fundamentals that will persist regardless of the presence of tariffs," Rettig said.

In addition, the Regional Comprehensive Economic Partnership (RCEP), which includes major Asian economies such as China, Indonesia, Japan, and South Korea, will also be crucial for the company to achieve its sales target of 33% by 2032 in the coming years.