Business Concentrates Landing Page

• Degussa mulls food unit options
• Companies win vaccine deals
• ISP and Niro in agreements
• BASF hosts MIT scientists
• Repsol buys Borealis site in Portugal
• Celanese sets return to U.S.
• DuPont to sell venture stake
• Praxair to buy German assets
• Thai industry moves forward
• Job slide continues
• Huntsman ending R&D in Austin
• Zhenhai gets nod for cracker
• Eastman sells Ariel to 3E
• SGI introduces hybrid computer
• Reliance gets new PTA unit
• BUSINESS ROUNDUP

Degussa mulls food unit options

Degussa is weighing the future of its food ingredients business. According to a company statement, "Seen from the present perspective, the unit is too small to be developed into a worldwide leading market position through its own efforts." The company says it is considering partnerships as well as an outright sale of the business, which had 2003 sales of just under $670 million. Degussa officials would not comment on newspaper reports that the company held tryouts earlier this month to choose a financial adviser and that a sales memorandum to prospective buyers would be sent out in the next several weeks. The company portrays the possible sale as distinct from the portfolio pruning that has been under way for the past four years but is now nearly complete. That pruning netted the company roughly $4.6 billion; the food additives unit is expected to sell for more than $800 million. ICI and Rhodia sold food additives units earlier this year to, respectively, Kerry Group and Danisco, companies focused on the food industry.

Companies win vaccine deals

Three drug and fine chemicals companies have been awarded contracts by NIH's National Institute of Allergy & Infectious Diseases to develop new vaccines. Avecia won a $50.7 million contract to develop a new recombinant protein vaccine to treat pneumonic plague. Involved will be pilot-lot manufacture, testing, and initial human clinical trials, with an option to conduct Phase II trials, between now and the end of the contract in 2007. Denmark's Bavarian Nordic and Acambis of Cambridge, Mass., and Cambridge, England, won contracts totaling up to $177 million for development of a smallpox vaccine based on MVA, a highly weakened form of the vaccinia virus that cannot replicate in human cells.

ISP and Niro in agreements

International Specialty Products has signed two agreements with the Danish processing technology firm Niro. In one, the companies will link to develop spray drying and formulation technologies that enhance the bioavailability of pharmaceutical active ingredients. In the second, ISP will acquire Niro's Pharma Technologies business in Columbia, Md. ISP CEO Sunil Kumar says the agreements will complement his firm's pharmaceutical excipients business.

BASF hosts MIT scientists

Ten young scientists from MIT and 10 from top European universities were invited to a workshop at BASF's German headquarters recently as part of the company's effort to forge ties with emerging scientists. The students heard lectures on nanotechnology by BASF scientists and toured plants making carotenoids and dispersions. "We are very keen to increase BASF's reputation as an innovative chemical company among a wider circle of young scientists, especially in the U.S.," says Marcos Gomez of BASF's university relations department.

Repsol buys Borealis site in Portugal

Spanish oil company Repsol YPF has agreed to purchase a petrochemicals complex in Sines, south of Lisbon, now owned by Denmark's Borealis, subject to authorization by the European Commission. The site houses a naphtha cracker, with annual capacity for 350,000 metric tons of ethylene and 180,000 metric tons of propylene, and two polyethylene plants. All told, the deal will boost Repsol's cracker capacity by 38% and increase its polyethylene capacity by 55%. Following the sale, Borealis will drop a notch to become the number three European polyolefins producer after Basell and BP Chemicals.

Celanese sets return to U.S.

Blackstone Group plans to move the headquarters of Kronberg, Germany-based Celanese back to the U.S., where the firm was founded by Camille and Henry Dreyfus in 1918. Bought by Hoechst in 1987 and spun off as a German stock company in 1999, Celanese was acquired by Blackstone at the end of 2003. By the end of this year, a company spokesman says, "a few people" in charge of global operations will move to Dallas, now the center of the firm's basic chemicals business. Kronberg will continue as the center of European operations, and Kelsterbach, Germany, will remain headquarters of Celanese's Ticona polymers business.

DuPont to sell venture stake

DuPont plans to sell its 50% stake in the five-year-old DuPontSA polyester fibers, resins, and intermediates business to its partner, Turkey's Sabanci Holding, for a reported $108 million. The business has sales of more than $1 billion annually and employs 3,500 workers at sites in the U.K., Germany, and Turkey. Earlier this year, DuPont completed the sale of its Invista textile fiber operations to Koch Industries for $4.2 billion.

Praxair to buy German assets

Air Liquide is selling certain German industrial gas assets to Praxair for $600 million, putting it one step closer to satisfying antitrust requirements following its May purchase of 70% of Messer Griesheim for $3.2 billion. Air Liquide sold German carbon dioxide assets to Tyczka in September for $12 million and some U.S. assets to Matheson Tri-Gas in July for $155 million. Still on the block is an interest in a joint venture serving the electronics industry that had 2003 sales of $43 million.

Thai industry moves forward

Thailand's PTT and National Petrochemical are advancing plans to build an ethane-based ethylene cracker and low-density polyethylene plant (C&EN, Aug. 30, page 10). The units, worth $444 million, will be built at the Map Ta Phut industrial complex and are expected to open in 2007. Separately, creditors of Thai Petrochemical Industry have agreed on a new plan that will reduce TPI's debt from $3 billion to $1.8 billion, primarily by issuing shares worth about $900 million. TPI founder and former CEO Prachai Leophairatana, who still owns 15% of the company, opposes the new plan.

Job slide continues

U.S. chemical employment fell in September for the third straight month, according to seasonally adjusted data from the Labor Department, as the number of chemical jobs declined by 800 from August to 892,400. Compared with last September, employment was down by 10,300. But while total employment fell, the number of hourly production workers increased for the eighth straight month, up 800 from August to reach a total of 526,300. There were 2,500 more production workers than in September 2003.

Huntsman ending R&D in Austin

Huntsman Corp. is shutting down its R&D center in Austin, Texas, by the end of next year and consolidating these operations in The Woodlands, Texas, according to local published reports. Of some 130 employees at the site, 120 are being offered transfers to Huntsman's new Houston-area location. Last month, Huntsman announced it was filing a registration statement with the Securities & Exchange Commission for an initial public offering.

Zhenhai gets nod for cracker

Zhenhai Refining & Chemical, a subsidiary of China Petroleum & Chemical (Sinopec), has won approval from China's National Development & Reform Commission to build a $2.15 billion petrochemical complex, Xinhua news agency reports. The project will feature an 800,000-metric-ton-per-year ethylene cracker and plants producing polyethylene and aromatics.

Eastman sells Ariel to 3E

Eastman has agreed to sell Ariel Research, a supplier of regulatory data and compliance services, to the outsourcing company 3E. The sale is part of Eastman's strategy to focus on its core chemical manufacturing business. Last month, Eastman said it was shutting down its Cendian logistics unit (C&EN, Sept. 20, page 18). Eastman says it will continue to use 3E for outsourcing.

SGI introduces hybrid computer

Computer graphics giant Silicon Graphics Inc. has launched a new line of Linux-based computer systems that it says combines the best capabilities of popular Linux clusters and traditional supercomputers. SGI says the Prism line features its signature graphics processing capabilities and will help scientists around the bottleneck of processing large amounts of visual data, including those from drug discovery. Prism's starting price is about $30,000, making the system accessible to a wider range of researchers than traditional supercomputers, the company adds.

Reliance gets new PTA unit

Aker Kvaerner has won the contract to engineer and construct a 640,000-metric-ton-per-year purified terephthalic acid unit at Reliance Industries' Hazira, India, complex. The plant, expected to open in 2006, will make use of a process licensed from Invista, a unit of Koch Industries. Kvaerner had earlier engineered two Reliance PTA units in India. A spokesman for Mitsubishi Chemical, the other PTA producer in India, says the Japanese company also finds the Indian market attractive but that it has no concrete plans to expand capacity at its plant in Haldia.

BUSINESS ROUNDUP

• Bayer has reached an agreement with the Department of Justice to settle charges that it fixed prices for acrylonitrile-butadiene rubber. Bayer will plead guilty and pay a $4.7 million fine.
•   Lion Bioscience's management and supervisory boards, including the firm's co-CEOs, have resigned. The company attributes the resignations to its inability to extend directors and officers insurance at economically feasible terms.
• KemFine is the new name for Kemira Fine Chemicals, effective Oct. 1. The name change concludes the acquisition of the unit from Kemira by British private-equity investors 3i. KemFine will retain its focus on custom production of intermediates and active ingredients for the agrochemical and drug industries.
•   Mitsui Chemicals will shut down its Osaka, Japan, acrylonitrile plant in May 2005. Mitsui says it will meet its future acrylonitrile needs by sourcing from Asahi Kasei, which has agreed to buy its ammonia feedstock from Mitsui.
•   BOC Edwards has acquired a 50% stake in Asia Union Electronic Chemical, a Taiwanese producer of ultrapure wet chemicals used by electronics manufacturers. A BOC Edwards spokeswoman says Asia Union's annual sales exceed $25 million.
•   NIH will use OpenEye Scientific Software's chemoinformatic toolkits to provide infrastructure for PubChem, the database of small organic molecules being developed as part of the NIH Roadmap for Medical Research initiative. Discovery Partners earlier won a contract to house the project's molecule collection (C&EN, Aug. 30, page 8).
• Saudi Basic Industries Co. has launched the Crown Prince Abdullah Bin Abdulaziz Al-Saud International Prize for Scientific Research. Three $160,000 awards will be given every two years for research in petrochemicals, metal, and plastics; environmental protection and combating desertification; and water and agriculture technologies.
•   BOC will spend more than $100 million to build a hydrogen and utilities complex in Toledo, Ohio, that will supply BP and Sunoco oil refineries. Expected to open in late 2005, the complex will help the two firms meet clean-fuel regulations.

BASF PHOTO