Evonik Industries says it is “exploring strategic options” for its superabsorbent polymers business, which the German firm is carving into a stand-alone unit to prepare for a possible sale or joint venture.
A sale would be its second large polymer divestment as Evonik hones its focus on specialty chemicals. The company sold its methacrylates business to the private equity firm Advent International last year for $3.4 billion.
Superabsorbent polymers, normally derived from acrylic acid, are used in baby diapers, adult undergarments, and other applications. According to the consulting firm Fior Markets, the sector is growing 6.1% annually and is expected to hit $12.2 billion by 2025.
Evonik isn’t stating how large the business is other than to note it has 800 employees. Evonik says it is the world’s third-largest maker of superabsorbents, behind Nippon Shokubai and BASF.
In 2016, Evonik reduced capacity at its plants in North Carolina and Louisiana in response to demand trends. It started up a joint venture in Saudi Arabia with the local firm Tasnee in 2013. It also has superabsorbents plants in Germany.
As Evonik contemplates exiting superabsorbents, Nippon Shokubai is doubling down on the sector. It is merging with another Japanese producer of the polymers, Sanyo Chemical, in a transaction they expect to complete by April 2021.