**Title: Evonik Announces Downsizing Amid Industry Crisis**
**Date: [Insert Date]**
German chemicals giant Evonik Industries has announced significant changes to its domestic operations, citing a “structural and economic crisis” within the chemical industry. This decision comes as the sector faces a multitude of challenges, including plant closures, job losses, and soaring energy costs, particularly following the reduction of affordable Russian energy supplies.
On Tuesday, Evonik outlined a series of measures that include site closures and job cuts, with plans to eliminate approximately 2,150 jobs in Germany by 2029. The company is also undergoing a restructuring of its six main production plants in the country. Despite these cuts, Evonik is looking to increase its investment in markets outside of Europe, particularly in Asia and the Americas, where the company perceives “good opportunities for growth.”
The announcement has sparked criticism from political figures, notably Mirze Edis, the industrial policy spokesman for the opposition Left Party (Die Linke). Edis condemned the job cuts as a “damning indictment” of the current government, specifically targeting German Chancellor Friedrich Merz and Economy Minister Katharina Reiche. He argued that the government’s inaction regarding the chemical industry poses a significant economic risk to the nation.
Evonik plays a crucial role in the economy, producing a wide range of chemicals and additives that are integral to various industries, including automotive, plastics, cosmetics, and pharmaceuticals. The company’s operations are closely tied to the health of Germany’s chemical sector, which has been severely impacted by the ongoing energy crisis.
In response to the escalating conflict in Ukraine in 2022, Germany has been working to reduce its reliance on Russian energy sources. This shift has led to increased energy costs for manufacturers, particularly those in energy-intensive sectors like chemicals. Evonik has previously reported that it consumes around 15 terawatt-hours of natural gas annually, with more than a third of that consumption occurring in Germany. The company has warned that the loss of Russian gas supplies could “seriously jeopardize chemical production” in the country.
The situation has been further exacerbated by the ongoing US-Israeli conflict with Iran, which has disrupted shipping routes through the Strait of Hormuz. Although Germany primarily sources its liquefied natural gas (LNG) from the United States, the instability in the region has tightened global LNG supplies, contributing to rising energy prices in Europe.
The crisis affecting Evonik is not isolated to Germany. Across Europe, the chemical industry has seen a dramatic increase in permanent plant closures, with the European Chemical Industry Council (Cefic) reporting a sixfold rise in closures compared to pre-2022 levels. Factors contributing to this trend include high energy costs, diminished demand, and competition from cheaper overseas producers.
In a related development, British chemicals company INEOS announced the closure of its three acetyl plants in Hull, marking the end of major acetyl production facilities in Europe. The company cited soaring energy costs and carbon taxes as the primary reasons for the closures, highlighting that natural gas prices in Europe are currently 12 times higher than those in the United States, rendering even the most efficient plants uncompetitive.
As Evonik navigates this challenging landscape, the company’s restructuring efforts and potential shift in investment strategies will be closely monitored by industry analysts and stakeholders. The decisions made in the coming months will not only impact Evonik’s future but could also have broader implications for the European chemical sector as it grapples with ongoing economic pressures and a rapidly changing energy landscape.