The Alzchem unit, which offers additives to cosmetics and food products as well as pigments and fertilisers, is to be sold to German buyout group Bluo as long as the deal is given the green light.
Evonik’s corporate communications officer Alexandra Boy told CosmeticsDesign how the business unit has been on the company’s divestiture list for some time.
“Alzchem has been on the divestment list for some time as it is not our core business,” she said.
However, Boy confirmed that Evonik’s personal care and cosmetics portfolio outside of the Alzchem unit would be unaffected by the move.
Earlier this summer, the company said it was reviewing its strategy which prompted a number of predictions about the form the company would take in the future.
The company recently denied rumours that it plans to turn itself into a pure chemicals business by shedding its energy holdings.
The business had been the focus of a magazine report that claimed it was considering selling its Staeg power plant and simultaneously suggested it would be purchasing chemical company Lanxess – rumours that Evonik has dismissed.
Economic crisis taken its toll
Evonik has suffered during the economic crisis with first quarter sales for 2009 dropping 19 percent to €3.2bn ($4.7bn).
Overall net income for the quarter ending March 31st dropped to a negative €46m compared to the first quarter in 2008 when profit stood at €284m.
At the time the quarter results were published the company was not positive about the near future of the chemicals industry.
“The Chemicals Business Area, which accounts for around 75 percent of Evonik, is still facing very difficult economic conditions. Although Evonik registered a slight recovery in some areas of its chemicals business in March, there is still no sign of a broadly based upturn,” the company said.
However, significant progress has been made on improving efficiencies, according to Evonik, which is hoping to be making savings of €500m per year worldwide by 2012.