Singapore’s Temasek buys 4.6% stake in Evonik

Temasek Holdings, the Singapore sovereign wealth fund, paid US$785.9 million in early March for a 4.6% stake in German chemicals company Evonik through private placement.
The Singapore fund joins a group of institutional investors – including CVC Capital Partners, the private equity group – that have now acquired about 9% of Evonik and are attempting to revive a much-delayed public listing.
CVC owned 25% of Evonik, with the remaining 75% held by the RAG foundation, a quasi-public body linked to the German coal industry. Last month both owners took the first steps to reduce their stakes, selling about 4% of shares to a first group of investors in a private placement.
Temasek’s investment in Evonik comes as the state investment agency is building its interests in companies that have exposure to long-term demographic trends such as urbanization, rising consumer spending power in emerging markets and energy. Evonik makes chemicals for fields such as health and nutrition.
Meanwhile, Evonik has started recruiting staff for its world-scale US$656.4 million methionine plant scheduled for start-up in the third quarter of 2014.
The Jurong Island plant will produce DL-Methionine, an amino acid that go into making animal feed, and all strategically important intermediates.
Evonik “has big plans for Asia,” declared Chairman and CEO Klaus Engel at a plant groundbreaking in August 2012. At that time, he announced a proposed third plant on Jurong Island, estimated to cost another US$328.2 million that will produce polyamide-12, which is used in a range of applications, from sophisticated line systems for motor vehicles, through large-volume pipes used in crude oil production, core insulation in the cable industry, catheters in medical technology, to precision injection-molded parts like impellers and control-valve housings in machine and equipment manufacture.
These projects follow its initial investment in Singapore in a lubricant additives plant at a cost of US$13.1 million in 2008. It has since announced that it will double the lube additive plant’s capacity by 2015.
The German group also stepped in earlier this year to replace rival BASF in Malaysia’s Refinery and Petrochemical Integrated Development (RAPID) project, after the latter withdrew from its joint venture with Petronas due to an inability to agree on the terms and conditions for the project.
Evonik’s joint venture with Petronas plans for downstream plants for the production of intermediates like hydrogen peroxide, C4 co-monomer and oxo-products. These are used to produce end products like bleaching agents in the paper and textile industries, as well as films, automotive applications and plastics.
(March 19, 2013)