Evonik plans site closures and thousands of job cuts amid industry-wide structural crisis German chemicals giant Evonik is overhauling its domestic operations amid what it describes as a “structural and economic crisis” in the industry. The German and wider European chemicals sector has been hit by plant closures, job losses and high energy costs following the loss of cheap Russian supplies; the US-Israeli war with Iran has added new pressure.
The measures, announced on Tuesday, include site closures, job cuts and restructuring of Evonik’s six main German plants, even as the company considers increasing investment in Asia and America, where it sees “great opportunities for growth.” (Die Linke) Mirze Edis, who called the cuts “a disgraceful indictment” of German Chancellor Friedrich Merz and Economy Minister Katharina Reiche. “Their inaction regarding the chemical industry has become a risk to the economy of the entire country,” Edis said. Evonik makes chemicals and additives used in everything from car tires and plastics to cosmetics and pharmaceuticals, making it a key supplier to the entire economy.
Germany’s chemicals sector has been one of the hardest hit by the country’s energy woes. Berlin has been forced to end its reliance on Russian energy following the escalation of the conflict in Ukraine in 2022 and has turned to alternative suppliers, leaving energy-intensive manufacturers facing higher costs. Evonik said at the time that it consumes about 15 terawatt-hours of natural gas annually, more than a third of that in Germany, and warned that the loss of chemical supplies to Iran could “cause damage to Russian production in Iran.”
The disruption to shipping in the Strait of Hormuz has added to the pressure this year. Although Germany gets most of its LNG from the US rather than the Persian Gulf, the de facto closure of the strait has disrupted flows of about 20% of global LNG supply, tightening the market and pushing up prices in Europe. The crisis is spreading even further to Germany. Permanent chemical plant closures across Europe have risen six-fold from pre-2022 levels amid high energy costs, weak demand and cheaper competition from abroad, according to the European Chemical Industry Council (Cefic). READ MORE: EU wants a green revolution.
It could get a rust belt instead British chemicals giant INEOS said this week it would close three acetyl plants in Hull, the last major facility of their kind in Europe, blaming rising energy costs and carbon taxes. It said natural gas in Europe now costs 12 times more than in the US, making even the most efficient plants uncompetitive. You can share this story on social media: Follow RT on