Issue Date: April 5, 2004
Dow spins off composites firm
Dow Chemical has spun off a polymer and fiber composites business, Fulcrum Composites, to North Coast Technology Investors, retaining a minority stake in the three-employee firm. Chris Edwards, former manager of the business, is now Fulcrum's CEO. Fulcrum uses Dow's Isoplast thermoplastic urethane resins to develop composites for ski poles, agricultural equipment, tool handles, and other uses.
BP Chemicals is putting its linear -olefins and poly -olefins unit, as well as its fabrics and fibers business, on the block. The two -olefins businesses have a total of 1.1 million metric tons of annual capacity in the U.S., Canada, and Belgium. The fabrics and fibers business is a major producer of polypropylene fabrics and carpet backings. The combined businesses represent $1.2 billion of the capital employed at BP Chemicals--10% of its total--and about 30% of its workforce. The company says the decision to sell coincides with a strategy of focusing on "advantaged" products such as purified terephthalic acid, p-xylene, and acetyl chemicals, particularly in Asia, and putting less emphasis on olefins and derivatives. Separately, BP has agreed to sell its performance chemicals business to Koch industries subsidiary Flint Hills Resources for an undisclosed sum. The purchase includes BP's complex in Joliet, Ill., which produces purified isophthalic acid (PIA), trimellitic anhydride (TMA), and maleic anhydride. Flint Hills will also receive the PIA output from BP's Geel, Belgium, plant. Koch already supplies pseudocumene feedstock for BP's TMA plant.
A last-minute flurry of share tenders has pushed Blackstone Group's acquisition of Celanese over the required 75% acceptance threshold (C&EN, March 22, page 10). The result of the bid was unclear up to the last day of the offer, when Blackstone was finally able to announce that it had received approximately 80% of Celanese's outstanding shares.
FMC, Georgia Gulf expect good results
FMC Corp. says its first-quarter earnings before special charges will significantly exceed 17 cents per share, the top end of analysts' earnings estimates. The company says the driver for this revised outlook is substantially stronger than expected performance during the quarter in agricultural chemicals--particularly in Brazil. On the day of the announcement, the company's stock price soared almost 14% to $42.23 per share. Meanwhile, Georgia Gulf also expects its earnings to beat the top end of analysts' projections of 50 cents per share. Its stock did not fare as well as FMC's, however, increasing to $28.50 per share from $28.38.
Wyeth exits biologics plants
Weyth will halt operations at its Marietta, Pa., biologics facility in December and will sell its St. Louis biologics plant to Centocor. The closure of the Pennsylvania facility, where Wyeth recently finished making an investigational influenza vaccine, will result in the loss of about 440 jobs. MedImmune, a Wyeth business partner, will take on further production of the vaccine. Biovitrum, another Wyeth partner, will take over production of Refacto, a recombinant hemophilia drug that is made in St. Louis. Wyeth's lead biologic drug, Enbrel, for rheumatoid arthritis, is made by Amgen. Wyeth makes Prevnar, a pediatric vaccine, in Pearl River, N.Y., and Sanford, N.C. In 2006, Wyeth will open a $685 million biologics facility in Grange Castle, Ireland, where it plans to manufacture Enbrel, Refacto, and Prevnar.
Eastman closing polyester plant
Eastman Chemical will close its copolyester plant in Hartlepool, England, and consolidate production at other sites. Most of the output will be shifted to Kingsport, Tenn., where Eastman is expanding capacity, but some will also be transferred to Kuantan, Malaysia. Some 75 jobs will be eliminated. That job loss follows the company's previously announced effort to shed 600 administrative positions through layoffs and attrition; most of those losses will be at the Kingsport headquarters.
Clariant to close facilities
Clariant will close plants in Beverley, England, and Knapsack, Germany, by the end of next year as part of its ongoing "transformation program." The entire Beverley site will be closed, resulting in the loss of 120 jobs, and production of leather chemicals will be transferred to Selby, England. Clariant says it will invest in the Selby site and make it a center for phenol chemistry. The Knapsack site's azo pigments output will be moved to other Clariant plants, resulting in the loss of 71 jobs.
Genencor sells vaccine program
Genencor has agreed to sell its therapeutic vaccine drug development program to Belgium's Innogenetics. Genencor will receive license fees in the first year of $10 million, up to $87 million in future milestones, and royalties on product sales. Genencor, primarily an industrial enzymes maker, launched its vaccine initiative in 2001. CEO Jean-Jacques Bienaimé says the deal underscores Genencor's ability to create value in the health care business, adding that the firm will accelerate its effort in therapeutics.
Glaxo expands Theravance pact
GlaxoSmithKline has formed an alliance with privately held Theravance to develop new drugs for a range of therapeutic areas. GSK has obtained an exclusive option to develop all Theravance drugs through August 2007. Theravance will receive $129 million, part of which will increase its ownership by GSK from 6% to 19%. Theravance could receive additional milestone payments ranging from $162 million to $240 million per development program that GSK undertakes. The two firms are already developing an asthma drug together.
Solvay reshapes pharma, plastics
Solvay will create a new company, based in Luxembourg, to consolidate the management of all its pharmaceutical operations. It will be headed by Jürgen Ernst, Solvay director and executive committee member currently in charge of pharmaceuticals. Additionally, Solvay will combine its plastics and processing divisions into a single division to be called Plastics Sector. The reorganization will leave Solvay with three sectors of comparable size--pharmaceuticals, chemicals, and plastics--rather than the four it runs currently.
New elastomers to cut costs at Goodyear
New rubber chemistry developments may soon allow Goodyear Tire & Rubber to substitute more polybutadiene and styrene-butadiene for increasingly costly natural rubber. The company says it could reduce its dependency on natural rubber by as much as 15% over the next few years. "We've been working on these proprietary polymers for some time," says Joseph M. Gingo, chief technology officer, "but recent natural rubber price volatility created a sense of urgency for our R&D people." About 40% of the rubber in a typical tire is natural rubber. Goodyear's ultimate goal is a 100% synthetic tire.
Japanese firms invest in China
Mitsui Chemicals and Sinopec will study a joint-venture bisphenol A plant in China. To be built in Caojing, near Shanghai, the 50-50 plant would have capacity for 120,000 metric tons per year and would open in July 2006. Mitsui says it is Asia's largest bisphenol A producer, while Sinopec is China's largest producer of feedstock phenol. Meanwhile, Mitsubishi Chemical, Itochu Corp., and Mitsubishi Corp. have finalized plans to make purified terephthalic acid in Daxie Island, in Zhejiang province. The plan, now submitted to the Chinese government, calls for a 600,000-metric-ton-per-year plant costing $314 million to open in late 2006.
Schering-Plough and Toyama in drug pact
Schering-Plough has acquired rights to garenoxacin, a quinolone antibiotic being developed by Japan's Toyama Chemical. Under the deal, Schering will pay $80 million for worldwide rights to develop and sell the drug, excluding Japan, South Korea, and China. Toyama could receive a further $245 million in milestone payments. Schering-Plough CEO Fred Hassan says the deal is in keeping with his turnaround plan for the company.
Shipments fall in January
U.S. chemical shipments declined in February from the previous month, according to the Commerce Department. Seasonally adjusted chemical demand fell 1.3% from January but was still up 6.1% from February 2003. Excluding pharmaceuticals, shipments of all chemicals rose 0.9% month-to-month and 10.2% from February of last year. Meanwhile, inventories rose 1.6% from January and 3.9% from last February. Inventories, excluding pharmaceuticals, were up just 0.5% month-to-month and 1.2% from 12 months earlier. Thus, the total chemical inventories-to-shipments ratio increased to 1.37 from 1.33 in January, but was still less than February 2003's 1.40.
MissChem ends output of melamine
Mississippi Chemical says it is permanently closing its melamine and urea operation and its number one ammonia facility in Donaldsonville, La., by the end of May. It will continue to operate its number two ammonia plant there as needed. The workforce will be cut by 72 positions, with 18 employees remaining to manage the port terminal at the site and operate the remaining ammonia plant. MissChem acquired the melamine unit from Borden Chemicals in April 2003, about a month before MissChem filed for bankruptcy. MissChem has begun to look for a buyer for its melamine business. Separately, Terra Industries says it will permanently close its ammonia and urea plants in Blytheville, Ark.
Rhodia wants to raise about $550 million through the issue of new shares and another $732 million through a bond offering. It presented the plan--part of an action plan for survival launched last October--to shareholders at its annual meeting last week.
Wacker-Chemie has signed a multi-million-dollar contract to be the exclusive supplier of cyclodextrins to Procter & Gamble. Wacker's specialties division says it is the world's leading manufacturer of cyclodextrins--ring-shaped, glucose-based compounds that have applications in personal and textile care.
ISP has acquired Hallcrest Ltd., a U.K. maker and marketer of custom microencapsulation and liquid-crystal products for the personal care, home care, and food industries. ISP says the purchase will expand its ingredient offering to consumer product makers.
Almatis will add a multi-million-dollar alumina grinding mill at its Ludwigshafen, Germany, facility, increasing the site's reactive alumina capacity by 50%. Almatis is the former Alcoa World Chemicals, sold in February to a consortium led by Rhone Capital.
CiVentiChem will make and market nonregulated forms of Ferro Pfanstiehl's carbohydrate product line under a new agreement. CiVentiChem says it will have access to Ferro manufacturing technology.
Microbia has expanded an agreement under which it improves Teva Pharmaceutical Industries' biomanufacturing processes with its Precision Engineering technology. The "multiyear, multiproduct" deal extends a 2002 collaboration.
Ticona is expanding acetal production at its Bishop, Texas, facility by nearly 20% to 102,000 metric tons per year.
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