Business Concentrates

Newtop executives named at Shell, OxyChem, and Ecolab

Three chemical companies are getting new top executives.Rob Routs, 57, will replace Jeroen van der Veer, 56, as head of ShellChemicals, effective immediately. Van der Veer, in the job for justover a year, is replacing Sir Philip Watts, who is stepping down as chairmanof Royal Dutch/Shell in the wake of the company's acknowledgment in Januarythat it had overestimated oil and gas reserves. Routs will retain his responsibilityfor Shell's oil products business. Meanwhile, OccidentalPetroleum appointed James M. Lienert, 51, president of Occidental Chemical,effective March 1. He replaces John L. Hurst, 64, who retired from OxyChemon March 1 and will retire from the parent company at the end of the year.Lienert most recently headed OxyChem's vinyls business. And Ecolab's boardhas elected Douglas M. Baker Jr., 45, as CEO, effective July 1, succeedingAllan L. Schuman, 69. Baker is now president and chief operating officer;Schuman will remain chairman until at least the end of next year.

Arch to acquire Avecia biocides

Arch Chemicalshas agreed to acquire Avecia's biocidesbusiness for about $210 million. The business, which had sales last yearof $137 million, consists of a pool and spa unit and a protection and hygieneunit serving industrial and consumer product makers. The business' keyactive ingredients are polyhexamethylene biguanide and 1,2-benzisothiazolin-3-one.Arch CEO Michael E. Campbell says the purchase will complement Arch's existingchlorine-based pool sanitizer business and extend its biocide businessinto consumer markets. For Avecia, the deal follows the recent sale ofits additives business to Lubrizol and continues a shift toward pharmaceutical markets.

Genzyme boosts cancer programwith two deals

Genzyme will acquire Ilex Oncology in a stock deal valuedat approximately $1 billion to Ilex shareholders. Genzyme also announcedit is the lead bidder to purchase Impath's cancer diagnostics business.Genzyme is offering approximately $215 million for the business, whichit would combine with its genetics unit. The two acquisitions bolster Genzyme'sefforts to build its oncology, biologics, and targeted therapeutics businesses.Ilex' leading product, Campath (alemtuzumab),is an injectable humanized monoclonal antibody indicated in the U.S. fortreatment of B-cell chronic lymphocytic leukemia. Impath, which filed forChapter 11 bankruptcy last September, develops diagnostic technologies that work by gauging drug resistance.

Dow invests in latex emulsions

Dow Chemical will spendmore than $100 million over the next three years to revamp its latex emulsions operations in North America. The company is building a new latex plantin St. Charles, La., based on a Dow technology that is expected to improve manufacturing productivity and product quality. The company is also planning improvements at its Alsip, Ill., and Sarnia, Ontario, plants. However,Dow is closing plants in Tucker, Ga., and Garland, Texas, in 2006. The company says it cannot afford to reinvest in these sites and will transfer production to St. Charles.

Nordion adds radioisotopes ...

MDS Nordion has begun commercial-scale production of lutetium-177 and rhenium-186, radioisotopes being investigated for use in new biotech cancer drugs. Today, only two drugs--Corixa's Bexxar and Biogen Idec's Zevalin--combine radiation and biopharmaceutical protein therapy (C&EN, Oct. 20, 2003, page 16). They employ Nordion-supplied iodine-131 and yttrium-90, respectively. Nordion notes that high-specific-activity isotopes such as Lu-177 are preferred when radiolabeling peptides because smaller amounts of peptide can be used.

... radiopharma makers settle

Corixa and GlaxoSmithKline have reached a settlement with Biogen Idec that settles all outstandingpatent litigation between the two parties regarding their Bexxar and Zevalinradiolabeled biopharmaceuticals. Biogen Idec will pay Corixa and marketingpartner GSK a $20 million up-front settlement, as well as future milestoneand royalty payments based on Zevalin sales. The firms will also cross-license patents related to the lawsuit.

Chiron, Xoma in cancer pact

Chiron and Xoma will jointly research, develop, and commercialize a range of antibody-basedcancer therapies using targets developed by Chiron BioPharmaceuticals.Under the agreement, the companies will share expenses--including preclinicaland clinical development, manufacturing, and marketing costs--on a 70-30basis, with Chiron taking the 70% share. Xoma will receive an initial paymentof $10 million and a loan of up to $50 million to fund its share of development expenses.

Chemistry firms win financing

Two fine chemicals companies have won the backing of outsideinvestors. Cedarburg Pharmaceuticals,a maker of active pharmaceutical ingredients based in Grafton, Wis., hasreceived a $7 million investment by LOF Partners, the life sciences investmentarm of Sanders Morris Harris Group.Cedarburg says it will use the funds to repay debt and grow its business.Meanwhile, Chiral Quest, a chiralproducts and technology company, has sold securities to investors in aprivate placement worth $7.2 million. CEO Alan D. Roth says the funds willstrengthen the firm's balance sheet.

Degussa selling plant to Hexal

Degussa will sell its pharmaceutical chemicals plant in Radebeul, in eastern Germany,to the German drugmaker Hexal,effective July 1. Hexal, which is based near Munich but is particularlystrong in eastern Germany, says the site will provide a platform for developingits own active substances. For Degussa, the deal is a relief, as the companyhad originally planned to close the site. As Chairman Utz-Hellmuth Felchtputs it, "We have produced a socially responsible solution, and made animportant contribution to securing the future of the site and the region."

Sumitomo is expanding polarizing films

Sumitomo Chemical is investing $185 million at its Taiwanese and South Korean sites to increase capacity for polarizing films used in liquid-crystal displays. The company is doubling capacity to 8 million m² per year at both sites. The new facilities, scheduled to open in December,will be fully integrated, from stretching rolls of films to the assembly of polarizers. Sumitomo says the booming demand for flat-screen displays justifies the investment.

Insecticides under fire in France

BASF is protesting the French government's ban on the insecticide active ingredient fipronil.The government is conducting a probe, scheduled for completion by the end of 2005, on whether the chemical kills bees. Fipronil is the largest asset in the portfolio of insecticides and fungicides that BASF bought a year ago from Bayer. BASF claims the product poses no harm if used properly and is proposing a study of why the bee population is declining in Europe. Bayer, meanwhile, says its insecticide imidacloprid has been cleared by French health and food safety authorities.French beekeepers have blamed the product for bee deaths.

Sinopec joins with BP foracetic acid

China Petroleum & Chemical Corp. (Sinopec) will teamup with BP for the construction of an equallyowned 500,000-metric-ton-per-year acetic acid venture in Nanjing, China.In a statement, Sinopec says it had considered another foreign companyas a partner before selecting BP. Celanese,which last year announced its own acetic acid plant in Nanjing, says itplans to go ahead with its wholly owned project. "Celanese has a government-approved project and permits for its acetic acid plant in place, final engineering activities are being completed, contractors are on board, and we continue to be on schedule," a spokesman says. Sources earlier told C&EN that Sinopec, which owns most of the petrochemical infrastructure in the Nanjingarea, does not support the Celanese project (C&EN,July 21, 2003, page 12).

Shipments climb in January

U.S. chemical shipments increased 1.3%in January from the previous month, according to seasonally adjusted data from the Commerce Department. Compared with the same month last year, demand was up 8.3%. Shipments of chemicals excluding pharmaceuticals rose 0.8%from the previous month and jumped 12.9% from January 2003. Meanwhile,inventories for all chemicals increased just 0.2% from December. Inventories excluding pharmaceuticals were up 0.8% month-to-month. The inventories-to-shipments ratio for all chemicals fell to 1.32 in January from 1.33 in December and from 1.38 in January of last year. The ratio excluding drugs was unchanged from December at 1.03, but well down from 1.16 in January 2003.

BUSINESS ROUNDUP

BASF has acquired Foam Enterprises, a Minneapolis-based supplier of rigid polyurethane foam systems with sales last year of about $80 million. BASF says the purchase strengthens its network of polyurethane "system houses."

Peakdale Molecular, a U.K. contract research company, will provide a team of chemists to work with GlaxoSmithKline's respiratory and inflammation center of excellence for drug discovery. The collaboration will extend through 2004.

Hercules won't go through with the acquisition of Italian polypropylene fiber maker Meraklon because of "difficulties encountered in obtaining antitrust regulatory approval." Meraklon, which has annual sales of about $78 million, was to be combined with Hercules' Fiber Visions polypropylene fibers unit. Rhone Capital has completed the purchase of alumina chemicals maker Alcoa Specialty Chemicals for $342 million. The business, now known as Almatis, has annual sales of $360 million and employs 800 people at 11 facilities in North America,Europe, and Japan.

IMC Global and Cargill say they will comply with a Department of Justice request for additional information about the merger of their fertilizer businesses that they first proposed at the end of January.

Petro China is licensing Basell's Lupotech T low-density polyethylene technology for a 200,000-metric-ton-per-year plant planned for Lanzhou, China. In 2002, a similar contract was signed between the two companies for an LDPE plant in Daqing.

Dow Chemical has signed a 20-year terminal use agreement with Freeport LNG Development that will give it access to liquefied natural gas from a proposed terminal in Quintana, Texas. Dow first signed on to the project last year (C&EN,June 30, 2003, page 9).

Degussa has acquired Risjad Brasali Industries' hydrogen peroxide facility inthe Cikareng Industrial Estate outside Jakarta, Indonesia. The plant can produce 10,000 metric tons of H2O2 annually. Degussa says it will raise capacity to 18,000 metric tons immediately and 24,000metric tons by the end of 2004.