Evonik upgrades Shanghai site to explore growth potential
German specialty chemical company Evonik said it will upgrade its R&D center in Shanghai, transforming it into the new Evonik Shanghai Innovation Park with enhanced research and development capabilities in order to seek more growth opportunities in China. China is the biggest market for specialty chemicals, making up one third of the total world market.
The move further entrenches Shanghai as one of its six R&D core sites globally, according to the company.
"Being close to customers, markets and developments is crucial for Evonik," said Andreas Fischer, chief innovation officer of Evonik. "Evonik considers China one of the world's fastest-growing innovation drivers. We are committed to significantly enhancing our R&D competencies in this region."
Evonik's sales in China have continuously grown. As of 2021, the demand for chemical products in China is still tremendous. In the second quarter of this year, revenues achieved a double-digit growth compared with the prior-year quarter.
Aside from Evonik, other foreign investors were also optimistic about China and Shanghai, with foreign direct investment in the city reaching US$12.45 billion, up 21.1 percent from the same period last year and an average increase of 13 percent over a two-year period, according to data released in July by the Shanghai Statistics Bureau.
Companies have continued to choose Shanghai as their regional headquarters base. In the first half of the year, Shanghai added 31 regional headquarters sites and 12 R&D centers of foreign companies, bringing the cumulative number of each to 802 and 493.
Evonik's administrative headquarters for China is located at its Xinzhuang site in Minhang District of Shanghai which is also home to its Shanghai R&D Center. The R&D Center was first established in 2003 and expanded in 2007, 2013 and 2018. Its latest upgrade corresponds to China's current strategic growth in markets such as electric vehicles, environmental protection, smart manufacturing and the consumer goods sector.
"The Shanghai Innovation Park and the expansion of R&D activities align with China's economic and social development agenda, which brings us tremendous growth potential. It also underlines our commitment to China with investments in market-driven innovation areas," said Xia Fuliang, president of Evonik China.
To seize these growth opportunities, Evonik will enhance its innovation capabilities regarding specific technologies, such as lithium-ion battery materials, high-performance polymers, and formulation technology of specialty ingredients for cosmetics and cleansing products. For example, the company will set up its global competence center of lithium-ion battery technology in Shanghai.
With its strengthened R&D setup, Evonik plans to further foster and utilize the full potential of top local talent. The company expects to double the size of its R&D team at Shanghai Innovation Park by 2027.
Evonik also plans to expand its innovation networks through various open innovation approaches. For example, the company is working on several joint research projects focusing on advanced materials with leading Chinese universities and is exploring new business potential through venture capital investments in startup companies.
Evonik Industries AG is a German specialty chemicals company headquartered in Essen, North Rhine-Westphalia, Germany. It is the second-largest chemicals company in Germany and one of the largest specialty chemicals companies in the world.