Evonik looks set to benefit from dynamic feed amino acid market

By Jane Byrne contact

- Last updated on GMT

Evonik looks set to benefit from dynamic feed amino acid market

Related tags: Amino acid

Evonik Industries, in its Q4 and full year results, predicts a slight hike in profit in 2015 based on ongoing high demand for amino acids in animal nutrition in tandem with their limited availability in the market.

The group posted 2014 net income at €568 million ($634) on sales of €12.9 billion. And its quarterly earnings surpassed analysts' estimates.

Ute Wolf, chief financial officer of Evonik, said: "The fourth quarter brought a turnaround: although adjusted EBITDA was lower than in the third quarter for seasonal reasons, it was up year-on-year for the first time in three years."

Klaus Engel, Evonik CEO, hinted during the company’s 2014 Q3 result presentation that it may be on the asset trail. And, last October, rumors were rife that the German chemical group was eyeing up DSM as a potential acquisition.

But, commenting on the financial results today, the CEO, only said the company intends to continue its expansion strategy with discipline, based on its strong balance sheet and solid financial profile. "We will mobilize the company's resources and funds for further growth.”

And the German chemical group said the ramp up of amino acid capacity in Asia will support such a tactic.

Total amino acid capacity

Its new methionine complex in Singapore officially came on stream late last year after two years in construction. The facility has an annual capacity of 150,000 metric tons, bringing Evonik’s methionine output worldwide up to 580,000MT.

Evonik’s L-lysine feed additive, Biolys, has a yearly output of 280,000 tons, with additional capacity set to come from plants under construction in Russia and Brazil. The company produces 30,000 tons of its L-threonine amino acid, ThreAMINO, per year and “several thousand”​ tons of the L-tryptophan additive, TrypAMINO, annually.

The group invested over €500 million on the complex, the most it says that it has ever ploughed into a single chemical project.

“Methionine is one of our core businesses and Asia is the fastest-growing methionine market in the world. This is why we decided to build here,”​ said Engel.

Progress in feed technology, rapid population growth and rising consumption of meat in the region are fuelling Asia’s high methionine demand, said the German firm.

New production facilities for methionine formulations that are tailored to particular animal species are also under construction. 

A plant in Alabama in the US is set to come on stream mid-2015. It will produce Mepron, which is used in the feeding of dairy cattle. And the first production site for Evonik’s shrimp targeted Aquavi Met-Met, a dipeptide made up of two methionine molecules, is being built in Antwerp in Belgium.

Process breakthrough

In February, the chemical group announced a breakthrough in its amino acid continuous chromatography process that is said to separate the amino acids from the fermentation broth with high selectivity, to increase product yields and the efficiency of the entire process.

A spokesperson for Evonik told us then: “The process was developed for the purification of amino acids based on a biotechnology process and isolated in crystalline form. This means it has relevance for ThreAMINO and TrypAMINO.”  

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