SINGAPORE – German chemical giant Evonik Industries has invested over €500 million (S$768 million) in opening a second plant in Singapore to produce a key additive in animal feed and is an example of the role that industry can play in growing the economy and creating jobs, said Deputy Prime Minister Heng Swee Keat.
With an eye on the rising demand for meat in this region, Evonik’s second methionine plant will double its capacity in Singapore..The company’s total annual production here will increase from 150,000 to 300,000 tonnes .This makes up over 40 per cent of the 730,000 tonnes made globally each year by Evonik, which has four such plants in Belgium, Germany and the United States.
The new plant started operations on Tuesday (June 18) on Jurong Island. At the launch of the plant in Capitol Theatre on Tuesday, DPM Heng said: “Growing the economy and ensuring economic growth benefits the large majority of workers is a complex and difficult endeavour. Several developed economies have struggled in this aspect. As a result, the social compact in these economies has been affected.”
In Singapore, the Government brings business leaders, trade associations and chambers, and unions together to build the future economy, to help businesses succeed and create good jobs.
Mr Heng, who is also Finance Minister, said Evonik is a good example in the energy and chemicals industry – a significant contributor to Singapore’s economy – that has been innovating and leveraging technology.
The new facility, a “twin” of the company’s first methionine plant which started production in 2014, creates over 100 jobs in Singapore. These range from laboratory technicians and process technicians, to engineers in the maintenance, environmental, safety and health domains, according to Mr Heng.
Over the years, Evonik’s growth in Singapore has also created other new kinds of non-manufacturing jobs such as scientists and
researchers who work on cutting-edge developments in 3D printing and other areas.
The new investment reflects growing opportunities in Asia for sustainable nutrition, and the importance of innovation in ensuring food security, he said.
He noted that demand for meat and seafood in Asia is set to grow by 78 per cent by 2050, and global food security is becoming “an increasingly pressing issue” with the world’s population set to hit 9.8 billion by the same year.
“At the same time, arable land and crop yields are declining due to climate change,” he said.
To address challenges of meeting food and nutritional needs in a sustainable manner, new and innovative measures are required, he added.
Feed additives such as methionine are added to animal feed to boost its nutritional value and help meet the growing demand for meat. It can be used to replace soybean meal, and helps to reduce ammonia emissions and nitrate use.
For Evonik, Asia is the biggest growth market for methionine, with demand rising about 7 per cent annually.
Mr Johann-Caspar Gammelin, chairman of the management board of Evonik’s Nutrition & Care segment, said: “The growing customer affluence in Asia supports the increasing demand for animal protein.
“On the other hand, producers are increasingly focusing on more sustainable production of eggs, milk and fish,” he added, noting the role of the company’s methionine in supporting these efforts.
Evonik’s combined investment of more than €1 billion in both Singapore plants marks its largest single investment.
The reasons for its choice of location include Singapore’s position as a logistics and trade hub, its qualified workforce and access to talent, as well as its political stability, said Evonik Asia-Pacific South regional president Peter Meinshausen at a pre-launch press conference .
He added that more than half of the global chemical industry will be in Asia by 2030, with China being a key market, and this is among the company’s considerations in positioning itself here.
Asked about the impact of the US-China trade conflict at the press conference, Evonik chief executive Christian Kullmann said trade turmoil has slowed its growth in automotive-related industries as well as construction in China.
But he added that he expects performance to pick up in the later part of the year.
On the anti-dumping probe that Chinese authorities said in April that they were launching into Evonik’s imports of the amino acid methionine from Japan, Malaysia and Singapore, Mr Kullmann expressed confidence that the issue will be resolved.
The investigation will last a year and is to be completed by April 10, 2020.