Executive Interview Series | Claudine Mollenkopf, Division President - Evonik Industries

I mean, you made a very nice introduction about Evonik, and it's in fact summarizing the purpose we have defined: it's leading beyond chemistry to improve life today and as well as tomorrow. And this is exactly what you make with a couple of examples you gave about the mattress and the tire. That's us. We are a company based in Germany, however we have 33,000 employees over 100 countries in the world, and we have four divisions, and I'm leading one of them, the Specialty Additives division. We are selling additives that make all the end products of our customers more valuable, more durable, more energy saving, and simply better. That's what we are doing with our 3,800 employees at Specialty Additives.

I mean, there are two aspects of all these efforts we are able to do in automatization and digitalization. You are speaking about the customer interaction, but let me speak potentially first of another aspect. It is simply that in essence for the chemical company, or in general for the chemical industry, digitalization or automatization has generally one main purpose: it's to become more efficient and to reduce cost. This is visible in everything what those companies or that we are also doing: automatization of production, of maintenance, enhancement of order to cash process, enhancement of the forecast to produce process, and things like this. However, Evonik, and maybe that's one big difference with other companies, we do see a lot of additional aspects apart from just sheer efficiency gains. So for me, for us, it's also about raising and deepening the awareness of our customers for our offering. And today, the outreach opportunities to our customers are by far wider than in the past. Of course, in the past you have the sales guy which was visiting the customer or have a chat with them during a fair. But in the meantime, in order really to present your offering or to help your customer to become better in their product, it's more type of a 360-degree contact around the customer. And this development is by far going beyond just good market data and excellent customer intimacy.

If you allow me just to add on that point, I do believe it's more than just the catalog. We have with the digital communication tools we can reach the product development team directly, and we can even increase the density of the information. In the meantime, you can have a contact with the lab guy. And in the past, you had the head of the lab or you had the person which was involved in this communication. Today it's by far quicker, and this increased also the probability that our product becomes part of something new which is developed at a customer.

No, what I wanted to say is that this is happening since a couple of years, but we should not forget there's still the older way. Important is to touch everybody, so it's really the 360 degrees. So we are involved in all the way, the connection needs to happen on several levels.

I'm not ultimately convinced that, or at least I do not feel that the customer expectations are changing that much. I do believe that all the customers are very often looking for similar information or for similar improvement or for similar process. And it has really in the meantime become a common understanding that the digitalization of marketing and sales ultimately translates into value for the customer. However, I would agree with you that the degree of penetration or the implementation status of such a digitalization is heavily depending on the industry where you're moving, and for sure also on the culture, on the region. So potentially that might explain that some customers have, as you say, different expectations. But I do see that more as a degree of implementation which is different, but the expectations in general are pretty similar.

I think the business leaders should always have or keep two goals in mind: it's all about optimizing today and being prepared for tomorrow, for the future. So in the chemical industry, at least at Evonik, we do have a lot of products which are produced in assets that need also optimization as of today, and where we need to make decisions on capital expansion, on long-term technology investment to generate a competitive advantage in the future. So that's on one hand optimization of our assets and also prepared for the future. And this is also valid for business processes: optimizing the current supply chain after the nice disruption we had on the logistics for two years almost, and preparing the new digital solutions. On the supply chain and logistics, we learned that it's important to track our containers because for a couple of weeks or even sometimes two or three months, we were not knowing in which harbor our containers are landing. So also in our order to cash process, in our forecast to produce process, in our relationship with our customers, a lot of things are changing. And we can optimize today and need to be prepared for what's upcoming for the next year. But for me, what is also important in all that is to be realistic about what can be the targeted outcome or what is reachable with the organization you have, because change management is key as well to motivate our team so that we can really be prepared for the future when it comes to new digital processes to bring our offering on the market, or when it comes to new production processes in order to be able to produce competitive products for our customers.

For sure, you can assume in a time where you have a certain downturn, or at least it's not the growth you were expecting to have in one of these years. So after an outstanding year 2022, it's always to have a year which is not showing that good development as in the year before. There's a lot of discussion which is ongoing because it's simply a limitation also about the money or the capex which is available for that. So you need to make the right decision as well for the future.

Thank you very much.