Business Concentrates

Degussa, Akzo plot 2004 paths

Spending on R&D and training will be up at Degussa this year, says Chairman Utz-Hellmuth Felcht. And even capital spending, while tightly controlled, will rise by roughly 6% over that of 2003, he says, as part of plans to invest nearly $3 billion in property, plants, and equipment in the next three years. For Felcht, the challenge for the company is innovation--"our ability to refine our products and applications still further and thus create something new, valuable, and indispensable for our customers. Despite the more difficult economic environment and limited financial resources, cutting back on R&D and training thus remains taboo at Degussa." Meanwhile, at Akzo Nobel, CEO Hans Wijers says 2004 "is going to be another challenging year." It will, he adds, "very much be a balancing act on our way to new growth. Debt and cost levels will have to be reduced further, but Akzo Nobel cannot primarily focus on cash and costs forever. We will allocate the available funds to businesses with solid financial performance and attractive growth opportunities." And the company is looking closely at its headquarters offices in Arnhem, the Netherlands, he says, having "identified a substantial savings potential."

Monsanto results up on Roundup

It was the longtime product Roundup that boosted Monsanto's earnings in the first quarter of its current fiscal year, which will end on Aug. 31. The company reports earnings from continuing operations, excluding special charges, of $10 million, up from a loss of $9 million in the same period the year before. "Our first-quarter performance was anchored by improved Roundup and branded seed corn results in Brazil," CEO Hugh Grant says. Sales of Roundup and other glyphosate-based herbicides in the quarter jumped 65% to $429 million, which resulted in 34% sales growth in Monsanto's "agricultural productivity" segment to $643 million. Sales in the company's seeds and genomics segment rose just 5% to $385 million.

Mitsui vows to increase focus

In a New Year's message, Mitsui Chemicals President Hiroyuki Nakanishi says the company will clarify its business focus. Mitsui will drop certain products in an effort to maximize profits rather than sales. The firm intends to expand its performance materials business, particularly new functional olefinic polymers. Mitsui's primary petrochemical complex in Osaka will be redefined as a propylene center, producing mostly propylene derivatives, purified terephthalic acid, and products from the phenol chain. Nakanishi says Mitsui is drafting a new corporate strategy providing more details on these objectives.

Takeda revamps R&D operation

Takeda Chemical Industries is reorganizing R&D operations as part of its plan to become a pharmaceutical industry leader. It is creating the Takeda Global Research & Development Center in Lincolnshire, Ill., as a subsidiary of Takeda Pharmaceutical North America. TPNA's existing R&D division will transfer to the new center, and Takeda's European R&D center in England will report to it. John Yates, recently vice president for medical and scientific affairs at Merck, will head the new center.

VW, ADM in biodiesel pact

At the North American International Auto Show in Detroit last week, Volkswagen and Archer Daniels Midland announced a joint research agreement for developing biodiesel fuels for the auto industry. Biodiesel, according to the companies, is a blend of petroleum-based diesel with renewable oils such as canola and soybean oils. "Given the tremendous environmental, economic, and quality-related benefits of increased biodiesel usage, we believe this joint research agreement will go a long way toward advancing and furthering the development of this vital renewable fuel choice," VW Chairman Bernd Pischetsrieder said.

Noveon buys emollient maker

Noveon has acquired Scher Chemicals, a 70-year-old producer of emollients and surfactants for cosmetic and other personal care formulations. Sources place Clifton, N.J.-based Scher's sales at less than $20 million per year. The purchase brings Noveon--a maker of rheology modifiers, polymeric emulsifiers, and hair fixatives--an entirely new line of personal care ingredients. In the fall, Noveon expanded its personal care business by taking an ownership position in Specialty Natural Products, a Thailand-based maker of botanical extracts.

Celanese ups specialty glycol

Celanese has begun the second phase of a two-step expansion of its capacity for tricyclodecanedimethylol at its plant in Oberhausen, Germany. The first step, recently completed, increased production by about 30%. The second phase, to be completed by the third quarter of this year, will raise capacity for the specialty glycol by another 60%. It is used primarily in fragrance formulations but also in production of special polymers.

Array in new licensing deal

Array BioPharma and Genentech have signed a licensing agreement under which the companies will collaborate to advance two of Array's oncology programs, both based on small-molecule leads, into clinical development. Array will receive an up-front payment and research funding as well as potential milestone and royalty payments. Financial details were not disclosed; however, an Array official calls the agreement the company's second largest licensing deal after the MEK inhibitors pact it signed with AstraZeneca last month (C&EN, Jan. 5, page 14).

Air Products invests in two emerging firms

Air Products & Chemicals has made venture-capital investments in two emerging companies. Along with DuPont, NGen Partners, and others, Air Products participated in a $7 million investment in psiloQuest, a maker of polishing pads for semiconductor chemical mechanical planarization. Air Products also invested an undisclosed sum in Sterilox Technologies, a Radnor, Pa.-based company that makes electrochemical cells for on-site generation of hypochlorous acid, a broad-spectrum biocide.

3M buys supply chain company

3M plans to acquire HighJump Software, a supply chain management software firm, for an undisclosed sum in a cash and stock-for-stock acquisition. HighJump, with 2002 sales of $36 million, will operate as a wholly owned company within 3M's two-year-old industrial services and solutions division, which also markets Integrated Packaging Tool, a Web-based data management product developed by 3M.

Aventis, Crucell join in vaccines

Aventis and Crucell have entered an agreement under which vaccine maker Aventis Pasteur will receive an exclusive license to research, develop, and make cell-based influenza vaccines using Crucell's PER.C6 cell line technology. Crucell says it will receive payments totaling $38 million and royalties on future vaccine <br > sales up to double-digit levels. Crucell retains rights for Japan, which in 2002 accounted for 15% of the $1.5 billion influenza vaccine market.

Moody's cuts Avecia rating

Moody's Investor Service has lowered its ratings on more than $1 billion worth of Avecia debt securities. Among the factors Moody's cites for the downgrade are a difficult business environment in fine chemicals. "Whilst Moody's understands the group's strategy and focus on fine chemicals and electronic materials, it is concerned that cash flow improvement and a turnaround in the fine chemicals division will be heavily reliant upon the success of a few compounds" and upon a high occupancy rate at the firm's new biopharmaceutical plant in Billingham, England. Avecia will have difficulty meeting obligations to banks and bondholders without further asset sales, Moody's adds.

DuPont is red hot

DuPont's Zodiaq surfacing material lines a newly installed tunnel inside Selfridges department store in London. In an effort to revitalize the 95-year-old store, architects chose Zodiaq--a blend of quartz, pigments, and binding agents--to construct the 34-foot-long tunnel. It leads shoppers into the "Superbrands" department that offers premier fashion brands.

Reliance buying Indian rival

Reliance Industries will take over the petrochemicals and plastics divisions of fellow Indian company National Organic Chemical Industries Ltd. NOCIL owns a complex in Mumbai with total capacity of 300,000 metric tons per year. Idle since 2001, the complex will gain from Reliance's technical and manufacturing expertise, Reliance says. The purchase increases Reliance's control of India's petrochemical industry. In May 2002, the firm gained management control of Indian Petrochemicals Corp., giving it two-thirds of the country's ethylene capacity.

Xoma, Diversa in license pact

Xoma and Diversa have entered a licensing and product development agreement under which Diversa will use Xoma's antibody expression technology for developing antibody products. Diversa has an option for a license to produce antibodies under Xoma patents. Xoma will receive an undisclosed licensing fee as well as potential milestone and royalty payments. As part of the agreement, the two firms will also collaborate on antibodies for autoimmune-related diseases. For the antibody work, Diversa will receive research funding and is entitled to receive milestone payments and royalties on any drugs developed.

BUSINESS ROUNDUP

InnoCentive, the scientific problem-solving website, has formed a partnership with eBay under which the InnoCentive site will feature a link to eBay's laboratory and test and measurement equipment categories. The eBay categories offer used, refurbished, and new products for sale.

Mitsubishi Rayon will invest $35 million in a second unit producing acrylic sheet and coating resins at its Nantong site in China. The plant, with annual capacity for 20,000 metric tons of sheet and 3,500 metric tons of acrylic resins, is scheduled to open next year.

Atofina has agreed to share market and technical information with Zotefoams toward the development of closed-cell polyvinylidene fluoride foams. Atofina manufactures Kynar brand PVDF; Zotefoams is a foam specialist.

Cargill has commissioned a plant for the noncaloric sweetener erythritol at its Blair, Neb., site. The plant, one of only two in the world, was originally built for a joint venture with Mitsubishi Chemical. Cargill bought out Mitsubishi in 2002.

Borden Chemical has acquired the business and technology assets of Southeastern Adhesives Co. The Lenoir, N.C.-based producer of furniture and millwork adhesives had annual sales of about $7 million.

Amgen has invested $25 million in Infinity Pharmaceuticals, giving it a nearly 15% stake in the drug discovery company. Infinity will provide Amgen nonexclusive access to a collection of small molecules for three years, during which time Amgen may perform screening and chemistry to identify drug leads.