The sluggish global economy has not spared German speciality chemicals giant Evonik Industries.
But Dr Klaus Engel, chairman of the group's executive board, believes there is no better time than now to invest for the future.
"As of right now, we have to face the 'new normal' and get used to it," Dr Engel told The Straits Times in an interview on Tuesday during a visit to Singapore.
"This means that as we expect the global economy to continue to slow down, at least for the foreseeable future, we have to focus on our own means - in terms of cost efficiencies and the swift execution of our long-term strategy."
Dr Engel was here for the groundbreaking of the group's second methionine plant on Jurong Island - its sixth such facility worldwide - yesterday.
Methionine is an essential amino acid in animal feed.
INVESTING FOR TOMORROW
So even though the global economy is not in the best of shape, now is the right time to invest and think about how demand will be like two to five years down the road.
DR KLAUS ENGEL, chairman of executive board of Evonik Industries.
Amid growing uncertainties over the health of the global economy, Evonik has seen its customers switch to more short-term orders, Dr Engel noted.
"People are more cautious about having too much inventory. They're ordering not to meet demand for the next one year or half a year, but in some businesses, they're ordering just to meet demand for the next one to three months," he said.
"So the order books become more short-term and this puts some stress on the entire supply chain. This is something we, of course, have to pay attention to, but based on a profound strategy, we take a long-term view. You do not want to sacrifice the future for short-term gains."
On Evonik's latest investment in Singapore, Dr Engel added: "So even though the global economy is not in the best of shape, now is the right time to invest and think about how demand will be like two to five years down the road."
It was important for the group to do so, given that new competitors are fast emerging from Asia, he said.
Following a review of the business, Evonik announced earlier this year that it plans to close a number of smaller methacrylate-producing sites in Europe.
The move would allow the group to focus on its key businesses, such as nutrition and care, which include methionine production, Dr Engel said.
Already, it has mothballed two sites in the United States related to the super-absorbent polymer business amid a supply glut.
"Companies like ourselves, we have to focus on what we do best," said Dr Engel. "Our industry is capital-intensive, so we have to spend our resources on where we are the best - markets and business units where we have proprietary technology and significant market share."