Business Concentrates

Dow's Gross to retire; company names new R&D leadership team

Richard M. Gross, 56, corporate vice president of R&D at Dow, is retiring. To replace him, the firm has established a five-member R&D Council to coordinate research activities across the company. President Andrew N. Liveris says the reorganization aligns R&D efforts with the firm's business portfolios, "allowing each portfolio to focus its R&D activities to reflect the business' characterization and growth potential." Members of the council are Carol Dudley, newly named R&D director for chemicals, intermediates, hydrocarbons, and energy; Dan Kittle, R&D director for AgroSciences; Rich Myers, R&D director for performance chemicals and thermosets; and Kurt Swogger, R&D director of plastics. A director of R&D for Dow Ventures--to be named later--will also be a member of the council. Other lower level R&D organizational changes are likely to come, a Dow spokeswoman indicates. Gross, who has led Dow's R&D organization since 1998, is taking on a special assignment to define a technology strategy in emerging markets such as China, India, and Russia; establish a strategy for R&D alliances; and identify Dow's next growth technology platform after biotechnology. He will retire after he completes the assignment at an as-yet-undetermined date.

Valspar buys Dutch coatings

To broaden its technology and geographic reach, Valspar has purchased De Beer Lakfabrieken, a privately held maker of car refinish coatings, based in Lelystad, the Netherlands. The $50 million acquisition includes De Beer's subsidiaries in the U.K. and Australia. Separately, Valspar says its board approved the construction of an architectural coatings manufacturing and distribution facility in eastern Pennsylvania to be operational by mid-2005.

Air Products, DuPont donate technology

Both DuPont and Air Products & Chemicals have just given away intellectual property to universities. DuPont donated two patents to Colorado State University's College of Engineering. The patents could lead to an on-site process that cleans soils contaminated with chlorinated solvents. Air Products donated a technology portfolio to the University of California, Davis, to produce vinyl acetate at significantly lower cost than the conventional processes. Vinyl acetate is a key raw material in the manufacture of polyvinyl alcohol, a business Air Products sold to Celanese in 2000.

BASF, ICI in paint ventures

BASF and ICI have signed deals intended to enlarge their respective paint franchises. BASF has reached a five-year agreement with Volkswagen to supply car body paint and related services to Volkswagen's plant in Puebla, Mexico. The paint maker already supplies paint systems to nine other Volkswagen plants. Separately, ICI has reached a deal with This Old House Ventures to produce a line of paints under the name of the well-known home improvement television series. ICI is the manufacturer of popular brand-name paints such as Glidden, Dulux, and Fuller-O'Brien.

Huntsman to cut alkoxylation

Hunstman Corp. is reviewing the economic viability of its alkoxylation business and studying ways to improve it. "We have identified a large portion of the alkoxylation business as being highly commoditized and unsustainable with current costs to serve," explains Tony Hankins, president of Huntsman Performance Products. He notes that the slow economy, high energy and raw material costs, and industry competitiveness and overcapacity are all factors forcing the change. The company has made no firm decisions on which capacity--of its four plants in North America, three in Europe, and one in Australia--it is likely to close.

Chiral ligand agreement set

Avantium Technologies and Chiral Quest will team up on R&D into chiral ligand catalysts. In the partnership, Avantium will use Chiral Quest's array of novel chiral ligand catalysts in its own high-throughput experimentation and simulation technology. The goal is development of products for the biopharmaceutical and fine chemicals industries. "Chiral Quest's ligands will add great value to the diversity of our existing catalyst library and greatly benefit the development technology that we provide to our clients," says Alan Lahaise, senior vice president for business development at Avantium.

Bristol-Myers, Iconix in pact

Iconix Pharmaceuticals has entered a research and license agreement with Bristol-Myers Squibb, allowing BMS access to Iconix' DrugMatrix chemogenomics system and its library of Drug Signatures. DrugMatrix is a reference source of information on the genomic effects of drug and chemical treatments. The agreement calls for Iconix to work on several projects each year involving proprietary BMS compounds. If the agreement runs its full term, the total value to Iconix--excluding commercialization fees and royalties--would be $24 million.

Belgium hot on industrial biotechnology

Industrial biotechnology is a good thing, and there should be more of it: That's the conclusion of the newly published official report on the subject by the Royal Belgian Academy Council of Applied Science (BACAS). The BACAS report urges Belgian industry--and by extension, industry throughout Europe--to make significant investments in the technology. It should be useful not only for fine chemicals, but also for other chemical production as renewable raw materials become increasingly important.

Sasol invests in pipeline

Sasol is set to invest roughly $87 million over the next four years to extend its chemicals plant at Brunsbüttel, northern Germany, and link that site with the German ethylene pipeline network via a pipeline to Dow Chemical's site in Stade. As part of the project, Sasol will upgrade and expand its production of alcohols and alumina, the associated infrastructure, and its downstream processing. Construction is scheduled to begin this year and is due to be completed in 2007. About a quarter of the total cost of the project covers a linkup of the site with the planned ethylene pipeline to Stade, an essential element of the ChemCoast Project of the German Chemicals Industry Association.

M&G expands PET in Mexico

Mossi & Ghisolfi will increase its polyethylene terephthalate production at its Altamira, Mexico, site to 965 million lb annually later this year. Last year, the company completed a 600 million-lb plant at the site, which is now operating at a 685 million-lb-per-year rate. Owing to the "residual capacity potential of the plant," the company says it will be able to increase production further. M&G also says it is considering a PET plant in Brazil, probably in Recife.

Roche plans R&D in Shanghai

Roche will open a pharmaceutical R&D center--its fifth worldwide--in Shanghai's Zhangjiang Hi-Tech Park. Scheduled to be functioning by the end of this year, the center will employ 40 chemists. Roche says it decided on Shanghai because its operations in China are rapidly expanding and the company already has a plant in Shanghai. The city is particularly appealing, Roche says, because it is China's center of excellence for biotech research. Roche plans to focus on medicinal chemistry research in Shanghai. Its facility will initially study key molecular building blocks and focused libraries. Covering 21 sq miles in the Pudong district, the Zhanjiang Hi-Tech Park was set up in 1992 to attract biomedical and information technology firms.

Output up in December

U.S. chemical production ended the year on an up note, according to the latest seasonally adjusted data from the Federal Reserve Board. Chemical production increased 0.7% from November 2003 and 4.7% from December 2002 to an index of 108.9 (1997 = 100). Output of the important basic chemicals sector rose 0.6% from the previous month and 2.9% from the end of the year before to an index of 95.3. The government's estimate of capacity utilization rose to 75.1% from 74.7% in November. In December 2002, capacity use was estimated at 73.4%.

Indonesian blast kills two workers

At least two workers died and 68 were injured in an explosion and fire at a plasticizer plant in the Surabaya suburb of Gresik in East Java, Indonesia. The 140,000-metric-ton-per-year phthalic anhydride complex is run by Petrowidada, a subsidiary of the Indonesian group Eterindo Wahanatama. The facility operates three phthalic anhydride plants built in 1989, 1996, and 2001. The damage caused by the explosion was extensive. The fire created a thick cloud of smoke rising at least half a mile into the sky. Police and company officials are conducting an investigation into the cause, but police are treating the incident as an accident.

Mitsui warns of charge

Mitsui Chemicals cautions that its financial results could suffer following the recent bankruptcy of its subsidiary Daika Polymers. Mitsui's 32% stake in Daika is worth only $3.5 million, but its loans and loan guarantees to Daika total $65 million. Launched in 1949, Daika produces pipes, construction materials, and other molded plastic products. It employs more than 250 people in Japan. Mitsui earned a net profit of $190 million in the fiscal year ended March 31, 2003.

BUSINESS ROUNDUP

Solutia says the U.S. Bankruptcy Court has approved a bank loan of $525 million from Citibank. By replacing a loan obtained last month when it filed for reorganization, the firm says it expects to save between $20 million and $40 million in interest charges.

Adhesives Research has opened a technical center in Singapore. The center will serve electronics, medical, and display customers in Asia.

Air Liquide has reached a preliminary agreement with Taiwan's AU Optronics to supply high-purity nitrogen, oxygen, argon, helium, and carbon dioxide for 15 years. AU is the world's third-largest manufacturer of thin-film-transistor liquid-crystal displays. Air Liquide says it will build its largest-ever high-purity nitrogen generator to fulfill the contract.

Akzo Nobel plans to build two coating plants in China this year. One will be located in Langfang, a northern city between Tianjin and Beijing, and the other in Shenzhen, a southern city neighboring Hong Kong. Akzo already has seven coatings plants in China.

Solvay will end its production of chlorine and caustic soda in Zurzach, Switzerland, effective July 31. The plant closure will affect 80 of the plant's 106 employees. According to Solvay, it would have had to invest nearly $16 million to bring the 55,000-metric-ton-per-year plant into environmental compliance, and the expense was not justified.

Bayer CropScience has named Friedrich Berschauer to succeed current CEO Jochen Wulff upon his retirement on April 1. Berschauer, 53, is currently head of the animal health division of Bayer HealthCare. Berschauer in turn will be succeeded by Gunnar Riemann, 45, now in charge of Bayer HealthCare's biological products unit.