German specialty chemicals company, Evonik, has signed an agreement to sell its Lülsdorf site and associated cyanuric chloride business in Wesseling, Germany, to Luxembourg-based International Chemical Investors Group (ICIG).
The purchase price has not been disclosed. The transfer of ownership is set to take place in mid-2023, pending antitrust clearance and approval from Evonik committees.
ICIG to Expand Lülsdorf and Wesseling Businesses
ICIG, with approximately 4,800 employees and €4 billion in sales last year, specializes in the acquisition and development of sites and business units that are no longer core businesses of other enterprises. The company will take over the entire site in Niederkassel-Lülsdorf and the associated cyanuric chloride business in Wesseling, along with more than 600 employees and all production plants. ICIG already has subsidiaries operating in chlorine chemistry and specialty chemicals and plans to expand its businesses in Lülsdorf and Wesseling.
Assurances for Employees
ICIG has given contractual assurances that the sale will not affect the rights of the employees at the sites. The agreement excludes dismissals for operational reasons following the transaction until 2032. The Chairman of Evonik’s Executive Board, Christian Kullmann, said, “We wanted a reliable investor that is able and willing to leverage Lülsdorf’s potential effects, and that is what ICIG offers.”
Realignment of Business
Evonik is realigning the three businesses of its Functional Solutions business line in conjunction with the divestment of the Lülsdorf site. Evonik will completely divest the production of potassium derivatives and cyanuric chloride, which takes place exclusively in Lülsdorf and Wesseling. The company is retaining the business with alkoxides for biodiesel, which are produced at two further sites apart from Lülsdorf. This business was integrated into the Catalysts business line in the Smart Materials division effective January 1, 2023. ICIG will produce alkoxides at the Lülsdorf site exclusively for Evonik until 2027. The businesses to be divested generated sales of around €260 million in 2022.
End of Plans for Ethylene Oxide Production
The sale to ICIG marks the definitive end of plans by another investor to produce ethylene oxide in Lülsdorf, which had previously caused public concern. Instead, ICIG intends to invest in facilities for renewable energies in addition to strengthening the existing production in Lülsdorf. Martin Albers, Chairman of the General Works Council of Evonik, said, “It is common practice at Evonik to select investors who deal responsibly with employee rights. That also holds true in this case and will remain a prerequisite for the other parts of Performance Materials.”