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Business Concentrates

May 17, 2004 | A version of this story appeared in Volume 82, Issue 20

Goodyear sues EPDM suppliers to recover rubber overcharges

In the latest wrinkle surrounding investigations of anticompetitive behavior among rubber suppliers, Goodyear Tire & Rubber has filed a lawsuit against ethylene-propylene diene rubber (EPDM) makers, seeking to recover overcharges for the high-heat- and ozone-resistant polymer. Goodyear, which also produces synthetic rubber and rubber additives, is not the subject of government inquiries. The firm does not produce EPDM, which is used to make tires and auto hoses, but says it is a significant EPDM buyer, both in the U.S. and Europe. Filed in U.S. District Court for the Northern District of Ohio, Goodyear's suit blames Bayer, Crompton, Dow Chemical, DuPont, DuPont Dow Elastomers, DSM, and Polimeri Europa for keeping prices artificially high between 1994 and 2002. Crompton uncovered and reported the price-fixing conspiracy among EPDM makers in December 2002 during an internal investigation of improper conduct in the sale of rubber additives. A Crompton spokeswoman says the firm is aware of the Goodyear suit but cannot comment at this time. Other producers had similar responses. DuPont says the litigation will be covered under an agreement it made with Dow Chemical in April to fund any DuPont Dow Elastomers liabilities of up to $150 million and 75% of any additional potential rubber price-fixing costs.

Monsanto retirees sue for benefits

A seven-member committee that is looking out for retiree interests in Solutia's bankruptcy case has filed a lawsuit on behalf of about 23,000 former Solutia and Monsanto workers. Monsanto and Pfizer's Pharmacia subsidiary could be forced to assume $475 million in Monsanto retiree benefit obligations if Solutia can't. Solutia undertook responsibility for the retirees when it spun out of Monsanto in 1997. However, the environmental obligations it also took on forced it into Chapter 11 reorganization late last year. The committee named Pharmacia in the litigation because the drug firm acquired Monsanto and its Searle drug unit in 1999 and subsequently spun off Monsanto in 2002 as a condition of its acquisition by Pfizer.

BASF to cut plant jobs

BASF will eliminate between 550 and 680 jobs at its Gulf Coast manufacturing locations as part of its previously announced North American cost-cutting program. The company says the job cuts are a component of an efficiency improvement plan at the plants that will save $30 million to $40 million annually. The overall program seeks to save at least $250 million by 2006. In Geismar, La., the company anticipates that 400 to 500 employees and contractors out of 1,400 will be let go. The Freeport, Texas, site will see 150 to 180 cuts out of 1,000. "Our business and industry are challenged by overcapacity, high energy costs, and the movement of customers to other countries," BASF CEO Klaus Peter Loebbe says. "We are acting to address these issues."

China merges chemical groups

China has merged China National Blue Star Corp. and China Haohua Chemical Industrial, two state-owned chemical conglomerates. The new company, China National Chemical Corp., employs 100,000 and is expected to achieve sales of $4.8 billion this year. Headquartered in Beijing, National Chemical makes detergents, silicon, bisphenol A, epoxy resins, fluoroelastomers, rocket fuel, fertilizers, and other industrial chemicals. Among the hundreds of firms that are part of the new conglomerate are several research institutes. China's Xinhua News Agency says the merger is part of Beijing's effort to create 30 to 50 internationally competitive companies.

Earnings: Degussa up, Bayer down

Bayer and Degussa reported earnings last week, and they went in opposite directions. Bayer reported first-quarter earnings before interest and taxes (EBIT) from continuing operations, excluding special items, of $902.0 million, down 11.6% from first-quarter 2003. Sales were up a scant 0.1% to $9.29 billion. In contrast, Degussa's EBIT from continuing operations in the first quarter totaled $272.7 million, a 7.0% increase. Continuing operations sales fell 2.3% to $3.20 billion.

Grace has a birthday party

Last Monday, W.R. Grace marked the 150th anniversary of its founding with celebrations at many of its offices and facilities around the world, including its Columbia, Md., headquarters. CEO Paul J. Norris rang the closing bell at the New York Stock Exchange. William Russell Grace, an Irish immigrant to Peru, founded the firm in 1854 when he took over the operations of a ship chandler's business, selling supplies to ships engaged in the country's guano and nitrates trade.

Avecia licenses drug technology

Avecia will license several of its technologies to Japan's Nard Institute, a contract research and process development company with labs and pilot plants near Kobe and Osaka. The technologies include catalysts used in chiral manufacturing, some biocatalytic processes, and an encapsulated palladium catalyst used for cleaner drug development. Nard's customers are pharmaceutical producers or specialty chemical companies serving the electronics and metalworking industries.

Atofina wins DOE grant

Atofina Chemicals and four other organizations will receive a $5.8 million grant to participate in the Department of Energy's Fuel Cell Project. As part of the program, Atofina will provide polymer expertise, Johnson Matthey will provide catalyst and membrane-electrode assembly know-how, United Technologies will contribute fuel-cell design, the Georgia Institute of Technology will offer high-throughput experimentation capabilities, and the University of Hawaii will host fuel-cell testing facilities. The grant is part of the government's FreedomCar and Hydrogen Fuel initiatives. Last month, Air Products & Chemicals and others won a grant to develop a fuel-cell car fleet and hydrogen fueling stations in California.

Roche and Syrrx in alliance

Roche and the privately held drug firm Syrrx have formed a partnership targeting drugs that treat cancer and type 2 diabetes. The pact, which expands an agreement that the two signed in May 2002, focuses on inhibitors of two emerging drug targets--HDAC and 11-beta HSD-1--for which Syrrx has developed inhibitors. Roche has rights to commercialize products resulting from the new collaboration. Syrrx will receive upfront and milestone payments that could total $178 million.

Jobs gain in chemicals

Total U.S. chemical employment grew by 900 jobs in April from the previous month to 895,600, according to seasonally adjusted data from the Labor Department. The April figure, however, was down by 18,300 employees from April 2003. The industry employed 519,800 production workers in April, up 500 from March but off by 8,700 from April of last year. The workweek averaged 43.0 hours, unchanged from March and up from 42.3 hours 12 months earlier. The workweek combined with the number of production workers produced an index of aggregate weekly hours of 99.4 (2002 = 100), up from 99.3 in March and down from 99.5 in April 2003.

Degussa buys amino acid unit

Degussa is acquiring the Hungarian firm Agroferm from Japan's Kyowa Hakko. The deal includes Kyowa Hakko's intellectual property for the feed amino acids l-lysine, l-threonine, and l-tryptophan. Kyowa Hakko, which recently closed its Mexican feed amino acid plant, says it is concentrating on food and industrial amino acids. Agroferm has annual sales of about $30 million.

Lonza signs peptide pact

Lonza has licensed technology related to peptide folding from Germany's AplaGen. The technology--CFPS, for correctly folded peptide synthesis--is important in solid-phase synthesis of longer peptides and proteins, Lonza says, and also useful during rapid, large-scale purification. AplaGen Managing Director Hans-Georg Frank says Lonza is his firm's "right partner" for large-scale industrial manufacture of pharmaceutical peptides. Lonza recently signed a technology agreement with the Belgian company RNA-TEC related to oligonucleotide synthesis.

Solvay eyes China soda ash

Solvay, the world's largest soda ash producer, is negotiating with Nanjing Chemical Industries to buy a stake in its soda ash plant in Lianyungang, China. The Lianyungang plant uses the Solvay production process and, with capacity for 900,000 metric tons per year, is one of Asia's largest, Solvay says. If a deal to create a joint venture is concluded, the partners will seek to hike capacity at the plant and develop sodium bicarbonate, calcium chloride, and related products. "This could become a first step in the implementation of Solvay's strategy in China," Chairman Aloïs Michielsen says.

Bentley Pharmaceuticals, a specialty drug firm, has acquired the Spanish active pharmaceutical ingredient maker Laboratorios Argenol for about $3.3 million. Argenol has annual sales of $3 million from APIs such as methocarbamol, silver sulfadiazine, nimodipine, and guaifenesin.

Albany Molecular Research has been awarded a three-year contract by the National Institute on Drug Abuse to manufacture potential treatments for substance abuse. The contract is valued at up to $3 million and follows a $3.6 million contract awarded in 1998.

NovaSep has acquired fellow French separations company Applexion. The combined firm will have sales this year of some $95 million, NovaSep says, and will have expanded expertise in low-pressure chromatography for biochemical and pharmaceutical separations.

Genta will reduce its workforce by 85 employees, or about 45%, and stop actively marketing its only product, Ganite brand gallium nitrate. The cutbacks follow an FDA advisory committee decision not to recommend approval of the firm's Genasense skin cancer treatment (C&EN, May 10, page 12).

Bayer Chemicals has invested $500,000 to add manufacturing of thiabendazole and dibromodicyanobutane biocides at its Wellford, S.C., plant. Bayer acquired the products from Ondeo Nalco at the end of 2002.

Dow Chemical is closing its Somerset, N.J., latex emulsions facility during the second quarter, affecting 28 employees. The closure is related to a Dow emulsions revamp that includes $100 million in investment but also closings in Georgia and Texas.

Celera Genomics has sold its 29% stake in Discovery Partners International to the public at a price of $5.00 per share. Celera, which acquired the investment when it bought Axys Pharmaceuticals in 2001, hopes to receive net proceeds of about $32 million.

Ticona is planning improvement projects at its Shelby, N.C., plant as early as this year that will increase liquid-crystal polymer capacity there by 40%. The company says it was planning to increase output next year but has pushed up the project because of high demand.


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