Germany: Digital Innovation Evonik Seeks to Leverage Growth with Innovations
According to Harald Schwager, deputy chairman of the Evonik Industries Executive Board, new products, solutions and business models will make a significant contribution to the company's growth and profitability.
Essen/Germany — Schwager intends to quickly implement detailed business plans to generate additional sales from the value of the project pipeline.
“We have to bring our innovation projects to customers in faster, even more targeted ways. We will achieve that with greater efficiency in research and development, working in close collaboration with our customers,” he said. In the intermediate term, the company’s goal is to increase the sales share from products and applications developed in the past five years from currently 10 % to 16 %.
One means to this end, are digital technologies. The company announced this summer that it would make around € 100 million (approx. $ 117 million) available for digitalization projects. The focus is on new business models as well as solutions and services for customers.
Research & development expenses will remain at over € 400 million (aprox. $ 470 million) per year. Some 90 % of funds are invested in the research efforts of the operative segments, and specifically in businesses with particularly high growth potential. The revenue share of R&D expenses (R&D ratio) in these businesses is between 4 and 6 %. Throughout the Group, the R&D ratio exceeds 3 %.
The company places particular emphasis on six innovation growth fields: Sustainable Nutrition, Healthcare Solutions, Advanced Food Ingredients, Membranes, Cosmetic Solutions and Additive Manufacturing. Each of them is backed up by a strategy with business objectives, market goals and business models, up to and including the acquisition of competencies.
The innovations from these fields will generate another € 1 billion in sales by the year 2025, the company claims.