Emblematic of the inventiveness, but also of the decline of German chemistry, Covestro passes under the flag of the United Arab Emirates. The polymer specialist is about to be sold to oil group Abu Dhabi National Oil Company (Adnoc). The operation, valued at almost 15 billion euros, makes this Gulf country one of the key players in one of the most traditional specialties of the Rhine Valley, while Adnoc aspires to become “one of the five greatest chemists in the world”.
Covestro was born in 2015 from a spin-off from Rhineland-based Bayer, which wanted to refocus on agrochemicals and pharmaceuticals. The German group, a specialist in high-performance polymers and plastics, produces essential compounds for the automotive, furniture, household appliances and construction industries. It went public in 2015 and is one of the world leaders in plastic recycling.
It is these specialties that interested Adnoc. The Emirati oil group wanted to diversify, while Covestro has been suffering for several years from the erosion of demand and high energy costs on the other side of the Rhine. Ahmed Al-Jaber, president of Adnoc, described the partnership between the two companies as “an ideal alliance”.
Al-Jaber has become a media personality since hosting the United Nations climate conference in Dubai in 2023. Many wondered how he could preach decarbonization and lead one of the largest groups of oil and gas companies. largest on the planet. He saw no contradiction there, but quite the opposite. “a fortress”. In any case, petrodollars allow you to make strategic purchases at low cost, in a Germany that is struggling to maintain its industrial base.
Cost reduction program
The question is whether the core of Covestro’s activity will remain well established along the Rhine, while cheap energy resources are thousands of kilometers away. By the way, Adnoc is committed to respecting an agreement to maintain jobs at Covestro, which will extend until 2032, as well as the principle of codecision, which implies obtaining the agreement of the unions on strategic decisions.
“The most important thing is proximity to the customer”Markus Steilemann, head of Covestro, also stated in an interview with Handelsblatt Wednesday, October 2, where he insists that the investment agreement is a sign of attractiveness for Germany. However, the question of maintaining strategic sites along the Rhine remains, at a time when German chemists are reducing their staff and redirecting their investments.
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