One chemical company’s vision of the future

In James Cameron’s 1991 sci-fi film Terminator 2, set in the year 2029, the T-1000, a human-robot hybrid made from liquid metal, is able to rebuild itself after being completely destroyed. The film wowed cinemagoers with the concept of growing a 3-D object from a pool of liquid.

But such is the accelerating pace of innovation that science has overtaken fiction. “Already we can see that the 3-D printing approach shown in the film is simple and for some time has been a reality,” says Harald Schwager, Evonik Industries’ deputy chairman, who is responsible for chemicals and innovation. While in 1991, 3-D printing was merely a curiosity, today, printable materials such as nylon 12 are one of Evonik’s fastest-growing businesses. The chemical company counts all leading 3-D printer makers among its customers.

Evonik is hungry for more success of this kind. To give itself a better chance of being involved in the step-change technologies of the future, the firm is attempting to move beyond traditional chemistry fields and into areas that overlap with biology and physics.

For some of its research projects, Evonik is doing this on its own. But it is increasingly choosing to gain access to emerging technologies by partnering with start-ups. To improve its research productivity and accelerate the speed at which it develops new technologies, Evonik also seeks to broaden its use of digital systems and supercomputers.

“In the past we looked for new molecules, then new formulations. Today our R&D is much more interdisciplinary, with projects combining with other disciplines,” Schwager says.

Evonik is concentrating its search for breakthrough technologies on six markets: animal nutrition, health care, food ingredients, membranes, cosmetics, and 3-D printing. The firm is targeting annual sales of $1.1 billion from innovations in the six fields by 2025, up from $280 million in 2018.

Technologies that the company hopes will help it hit its sales target include the culture of synthetic human skin—a potential $3 billion-per-year market—and artificial photosynthesis to make specialty chemicals from renewable electricity, bacteria, and waste carbon dioxide.

The development of human skin cells hits three of Evonik’s target markets: health care, cosmetics, and 3-D printing. Potential products the firm is eyeing in this field include synthetic skin patches for people with burns and diabetes as well as artificial skin for testing pharmaceuticals and cosmetics.

While Evonik has been collaborating with a network of experts in the field for several years, in April 2018 it created a research hothouse, called the Tissue Engineering Project House, to develop a process for making human skin cells. Headquartered in Singapore, the project has a staff of eight and plans to add another four or five researchers by the end of the year.

Evonik is testing different nutrients, trace elements, and surfaces required to grow artificial cell tissue. One of the areas Evonik is working on is the controlled release of nutrients to ensure steady cell growth.

Led by chemist Alexander König, the research team expects to have a viable synthetic skin technology ready for market sometime in 2020. Also that year, König plans to advise Evonik’s board on products that the company could introduce commercially.

“But this could be in a field where the market doesn’t exist yet. We do have some interesting applications in mind,” König says. Evonik has yet to decide on the commercial route it will take. “Maybe we would launch a product with a venture capital company, on our own, or as a spin-off,” he adds.

Technology developed in the Tissue Engineering Project House will be transferred to Evonik’s health-care business unit as soon as it is commercially viable.

Such a transfer would be similar to what happened in 2018 to Evonik’s Medical Devices Project House, which was set up to adapt polymers for medical devices, including pipes and tubes for diagnostic equipment. “We were able to launch the first products in 2018. They have received huge attention from medical players,” says Ulrich Küsthardt, Evonik’s chief innovation officer.

Some early research at Evonik is big and broad enough to potentially affect all of the firm’s six target markets. For example, last year the company formed a research collaboration with the industrial conglomerate Siemens to develop a synthetic photosynthesis process. The partners aim to use renewable electricity and bacteria to convert carbon dioxide into alcohols for making specialty chemicals.

Named Rheticus, the collaboration is still at a very early stage. The partners started up a pilot plant for the electrolysis component of the project in May. “Now the second stage is to develop the biotech,” Küsthardt says. Later this year the partners plan to combine the electrolysis elements of the process with those from the biotech side.

A key part of Evonik’s approach to R&D is taking stakes in—and partnering with—technology start-ups. In recent years, Evonik has wholly or partially acquired a substantial number of technology start-ups. The company keeps an eye on about 500 companies at any one time and typically directly invests in about 5 each year.

Anindya Mukherjee, CEO of the innovation consulting firm i2i Consulting, likes the changes he has seen in Evonik’s approach to innovation. “Evonik has done well to keep up, having reshaped their R&D and with their own venture capital fund,” he says.

Overall, Evonik spent close to $550 million on R&D in 2018, making it the chemical industry’s fourth-biggest spender, after DowDuPont (before the split), BASF, and 3M. At 3.1%, its spending as a percentage of sales places the company firmly in the middle of the pack of 20 of the world’s leading chemical companies, according to a recent survey by C&EN.

Unlike most of the other 19 players, though, Evonik’s 2018 R&D spending fell, by about 3.5%, from 2017 levels. And the company says spending will remain flat in the future because it expects to be more productive through wider use of tools such as computer modeling and digitization.

In one ongoing digital project, called Coatino, the company has developed a prototype voice-controlled digital lab assistant for technical staff at its paint- and coating-ingredient business and for its paint industry customers. Coatino, like Amazon’s Alexa, responds to questions, providing answers on which solvents, binders, pigments, and additives would be the best combination for making a certain type of paint or coating.

The aim is that Coatino will reduce complexity and save time. Evonik sells more than 300 additives to generate 40 coating effects. Manually determining the best potential combination from tens of thousands of different ones could take 10 years in the lab, says Gaetano Blanda, head of Evonik’s coating additives business.

But by combining an extensive database with an algorithm, Coatino provides an instant response. Via an app on a tablet or phone, it can provide full technical data about the components and even order the shipment of a sample pot of the chosen formula to a specified address.

The system is self-learning. If Coatino fails to come up with a suitable combination in response to a request, it will develop a series of potential alternatives, which a technician may then accept or reject.

Evonik is sharing a prototype version of Coatino with 100 of its customers. For its commercial version, to be launched in 2020, the firm plans to include specifications for additives, binders, pigments, fillers, and solvents made by its competitors.

“We have nothing to fear from our competitors,” says Oliver Kröhl, project leader for Coatino. If the app is successful, Evonik may apply the technology in other product fields. “We have lots of ideas for its development,” he says.

Evonik executives say they are acutely aware that the spread of digitization across the chemical industry could threaten its position in the value chain. Partly in response, the firm has introduced C4Buy, its own online trading platform for C₄-chain chemicals. Additionally, the firm has rolled out OneTwoChem, a trading platform open to competitors focused on biodiesel and household care products.

Such forward-looking projects are partly the result of guidance from Björn Theis, Evonik’s in-house futurologist. His job is to plot various potential scenarios for the firm according to geopolitics, emerging technologies, new feedstocks, and more.

Theis and his colleagues recently undertook what the company claims is the biggest study ever of the future of specialty chemicals. It took a year and involved interviews with more than 100 internal and external experts, plus 15 discussion workshops.

The study identified five key trends and potential scenarios that will influence the specialty chemical sector through 2040. The first four are digitization, China’s global economic and political influence, sustainability, and the impact of populist forces in a scenario that Theis describes as “turbulent times.” The fifth is that little visible change will occur, a scenario Theis calls “deceptive calm.”

“We’re now beginning to use the results of the scenario project for our innovation processes and strategies,” Küsthardt says.

Technology, of course, doesn’t always progress smoothly. In Terminator 2, in the year 2029, the T-1000 cyborg is outmaneuvered by an older nuts-and-bolts cyborg played by Arnold Schwarzenegger.

Küsthardt and Schwager, though, aren’t looking over their shoulders. They are confident that Evonik’s strategy of developing new technologies—including those outside traditional chemistry for markets that don’t yet exist—will be too powerful for old technology to overcome.