Investment in MMP Production in Alabama Shows Evonik’s Commitment to Responsible, Local Supply Chains: INDUSTRY PERSPECTIVES

Source: Evonik via Feedinfo

Methyl mercaptan is an intermediate in the production of DL-methionine. Until now, Evonik has relied on third parties to supply methyl mercaptan to its MetAMINO manufacturing site in Mobile, one of its three methionine production hubs worldwide. However, last February, the company announced that it would be investing around EUR 150 million over three years to make its own methyl mercaptan in Mobile.

Today, we hear from Dr. Gaetano Blanda, Head of Evonik's Animal Nutrition Business Line, about how this investment in backwards integration will strengthen Evonik’s ability to provide reliable, cost-optimized supply for North and South America, how it fits in with the company’s commitments to values such as responsible care and sustainability, and what’s ahead for Evonik’s methionine asset strategy.

[Feedinfo] It’s been about a year since Evonik’s plan to make methyl mercaptan for use in its methionine operations in Mobile, AL was announced. Can you give an update on how the project has progressed since that time?

[Dr. Gaetano Blanda] The project is progressing very well. Despite the challenging economic backdrop, with rising inflation, energy costs and raw material prices, development of our new methyl mercaptan plant at Mobile remains on track to open in the second half of 2024, which is fantastic news for us and our customers in the Americas. Construction is already well underway, with a groundbreaking ceremony held last October to celebrate the start of the build. The project team has been excellent in managing costs and resources in the face of economic volatility, and we’re proud that our timeline remains on course.

[Feedinfo] How will backwards integration at the Mobile plant help ensure stable supply for your Americas customers? How does this represent a commitment to the growers of the Americas?

[Dr. Gaetano Blanda] We see a clear potential for further growth in the Americas region based on our strong track record in serving the market, which goes as far back as the 1970s. With this come ambitious goals to anticipate and facilitate the growth of the feed and food industries. In times of global supply chain issues, which continue to be felt by industries across the globe, customers need that all-so-critical supply security through local production. This has been highly appreciated by our regional customers in the Americas with growing importance in recent years. And that is what we promise to deliver. Whatever happens, we are prepared and stay committed to serve the markets in the Americas with a strong local Evonik team and production.

Gaetano Blanda, Evonik

Dr. Gaetano Blanda
Head of Animal Nutrition Business Line

Moreover, we’re aiming to use backward integration of the plant as the basis of further potential expansion. This will enable us to boost future capacity for methionine in step with our customers’ needs and remain the reliable partner for our customers – not only in the region, but globally.

[Feedinfo] How does making methyl mercaptan locally help Evonik meet its objectives in terms of both Responsible Care and sustainability? In other words, what makes this the right decision both for the people working on these supply chains and for the environment?

[Dr. Gaetano Blanda] For Evonik, financial attractiveness must go together with safe, environmentally friendly and best-in-class technology leading solutions. We believe sustainable and Responsible Care business activities are vital for the future of our company and the wider industry. The Mobile investment is entirely in line with this strategy. The new plant will result in a total reduction of approximately 7% of CO2 (25 metric tons of CO2 eq.), achieved mainly through production process integration and transport minimization.

Evonik is known for its high standard of safety and technology leadership at all stages of the production process – from raw materials, intermediates to the end product – and our local customers in the Americas appreciate the efforts to strengthen our presence and therefore the supply security in the region, particularly during such volatile times we’re seeing at present.

We are also working on the introduction of new technology concepts to minimize the handling of critical intermediates, both during transport to the plant or storage at the site. The future production of methyl mercaptan in Mobile for example, will allow us to minimize railroad transportation of critical intermediates, which is essential for safeguarding business continuity for our customers. In Wesseling, Germany, we are investing around EUR 25 million in developing and implementing a new production process for methylmercaptopropionaldehyde (MMP) to eliminate the storage of acrolein at the site in the future. Both measures are an expression of our commitment to Responsible Care and sustainability.

[Feedinfo] Let’s talk about some of the longer-term evolutions in your methionine asset strategy. To what extent does Evonik remain committed to its three methionine production hubs? In the medium term, could we see pressures such as energy costs causing a re-evaluation of this strategy?

[Dr. Gaetano Blanda] Our Methionine Asset Strategy is a unique long-term plan to expand and serve the global feed market and manage all our DL-methionine production from three main international production hubs, spanning Europe (Antwerp, Belgium), Asia (Singapore) and the Americas (Mobile, Alabama). We are leveraging a global “Verbund structure”, which means that we add value through intelligently interlinking production plants, resources and logistics.

The optimized production setup is a result of changing market needs and offers significant cost and logistics advantages for Evonik and our customers, through better utilization of capacity and economies of scale, facilitating smart debottlenecking and an enhanced ability to adapt to changing market conditions.

We remain fully committed to strengthening these production hubs regardless of the current economic challenges, as demonstrated by the on-track development of the new Mobile plant in the US. We do not build our strategy based on tariffs, but on the best possible cost position in regions we are active in – always combined with the best ways to serve our customers.

More generally, the current energy crisis and elevated raw material costs are challenging the whole industry. Just as we have seen in other parts of the feed additive industry and in other sectors of the chemical industry, all producers are confronted with an unprecedented increase of raw material costs. These additional costs need to be compensated. At the same time business continuity for feed additives remains an issue, particularly in light of the current Covid-19 developments in China and the competitiveness of producers all around the globe. While we have noticed that suppliers of several chemical raw materials, such as ammonia in Europe, have stopped production, Evonik has done its best to safeguard its raw material supply and stay competitive. While operating in a very challenging cost environment, we are well prepared with our three world-scale methionine production hub setup.

In other words: we cannot change the weather, but we can be prepared with the right setup to master the storms.

[Feedinfo] What about the production of other amino acids, such as lysine? Has the recent market environment caused you to reconsider the economic logic behind continuing production in the Americas?

[Dr. Gaetano Blanda] Evonik also has two strong lysine production facilities in North and South America, and aims to make these carbon neutral. Our teams in both Blair (Nebraska, USA) and Castro (Paraná, Brazil) have done an excellent job to continuously improve production costs. Both plants are running at high rates and, as is the case with methionine, our regional customers appreciate having locally-produced supply: “made in America for the Americas”. We are pleased with the current development and expect further success and growth in the coming years.
We truly believe in the long-term growth and potential of the Americas region, which is why, alongside our decision to invest in a global methionine hub in Mobile, we have made other significant investments in this hemisphere; for example, in our global production plant in Veramaris (Blair, Nebraska) in partnership with DSM, to produce omega-3 fatty acids for sustainable salmon farming.

[Feedinfo] Meanwhile, what else is on the agenda in terms of investments in your production capacity for animal nutrition products, either in the Americas or elsewhere?

[Dr. Gaetano Blanda] Apart from our nutritional feed additives such as methionine and lysine, we are focusing on products, services and solutions to address various health issues in farm animals, for both monogastric and ruminant species. One example is our probiotics portfolio for strengthening the animals’ intestinal microbial balance. Here, we have just recently expanded our production capacity at our Leon site in Spain. We intend to further invest in expanding our portfolio of functional feed additives in the gut health and ruminant area. All products must have a positive impact on the sustainability of animal husbandry and on animal welfare. Here, too, we will make our location and investment decisions after careful consideration of market requirements and customer proximity.

Published in association with Evonik

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