Revitalizing R&D

"Our commitment to R&D is total. It’s our engine of growth. Without it, we have no future,” says David Lilley, Cytec Industries’ chairman, president, and chief executive officer.

In June, after a $50 million facelift, Cytec dedicated its newly renovated labs in Stamford, Conn., where research is under way in polymer additives, water treatment, mining chemicals, and other areas. The 35-acre site is a former silk mill purchased in 1937 by American Cyanamid, Cytec’s predecessor firm. Cyanamid, then a diversified chemical company, transformed the 450,000 sq ft of building space into R&D labs.

Cyanamid researchers used the site in the 1930s and 1940s to develop sulfa drugs and polymer-grade acrylonitrile. They developed impact-resistant acrylic sheets in the 1960s and absorbable sutures in the 1960s and 1980s. At its peak, about 1,000 researchers worked at the site, but only about 170 work there today, according to Joseph J. Kozakiewicz, vice president of technology for specialty chemicals.

Cytec doesn’t need all the space and the land. Architects have redesigned the space, reconfigured labs covering just 200,000 sq ft so that people could work together more easily, and installed new equipment. Demolition of unused buildings is under way. Cytec will need only 10 acres once the land is cleared, so it plans to sell the excess acreage.

The reconfigured space will help Cytec “attract and retain the high-caliber people we need for these jobs,” Lilley says. Cytec needs such people to meet its target to derive 25% of sales from products five years old or less. The average across the firm is now 15%.

In 2003, the firm spent $35 million on R&D, which it conducts in Stamford and at other sites as well. That is just 2.5% of sales, or 3.5% of sales if basic chemicals, which don’t receive much R&D effort, are subtracted from the mix. Existing Cytec businesses are seeing a 10% R&D boost this year. As for 2005, R&D will include the newly acquired UCB businesses and is likely to be in the $75 million range.