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Business Concentrates

November 29, 2004 | A version of this story appeared in Volume 82, Issue 48

DSM CEO eyes smaller acquisitions

DSM CEO Peter Elverding recently told a group of chemical industry executives that the Dutch firm's balance sheet "may be a bit too strong. Maybe we can do something about that in the future." But DSM does not plan to make another large acquisition like last year's $2 billion purchase of Roche's vitamin business. Speaking earlier this month at a meeting of the Société de Chimie Industrielle in New York City, Elverding said, "We are now focusing on smaller acquisitions that are easier to manage" and that complement the firm's performance materials businesses such as engineering plastics and coatings resins. Smaller bolt-ons would be unlikely to require the significant management attention DSM continues to put into the Roche vitamin unit. Separately, last week DSM said that it is in discussions with North China Pharmaceutical Group of Shijiazhuang, Hebei province, China, regarding a planned equity investment in the Chinese firm. DSM intends to buy $25 million worth of shares in the company related to the establishment of joint ventures in vitamins and antibiotics. Antibiotics have been the weakest of DSM's businesses in recent years.

Diversa deals flavor enzyme to Givaudan

Diversa has entered a licensing agreement with Givaudan under which Diversa will supply an enzyme for the production of a natural flavor ingredient. Givaudan will replace an existing manufacturing process with a more efficient biocatalytic one incorporating the enzyme, Accentuase-G. Diversa will receive a licensing fee and royalties from Givaudan. Diversa will manufacture the enzyme for Givaudan under a separate agreement.

Celanese to buy ICI emulsions

Celanese has agreed to purchase the Vinamul Polymers business of ICI's National Starch & Chemical unit for $208 million. The deal should close in the first quarter of 2005, subject to regulatory approval. Vinamul, with annual sales of $335 million and operating income of $18 million, supplies vinyl acetate homopolymer, copolymer, and other vinyl emulsions in Europe and North America to adhesives, paper, textile, and other customers. The deal adds to Celanese's existing emulsion polymers business, acquired from Clariant in 2002. And it allows further back-integration with Celanese's own vinyl acetate and polyvinyl alcohol raw materials. As part of the agreement, National Starch will supply Vinamul with starch, dextrin, and other specialty ingredients, while Celanese will supply National Starch with emulsion polymers.

BASF, workers agree on future of main site

BASF and representatives for its employees in Germany have signed an agreement that sets a course for its massive headquarters site in Ludwigshafen, Germany. Under the pact, the number of BASF employees at the site will decline to roughly 32,000 by the end of 2007 from 35,300 at the beginning of 2004. That target number will remain steady with no layoffs until 2010, assuming no major economic or political upheavals. The agreement is an outgrowth of the 2002 "site project for Ludwigshafen," which calls for removing $580 million in costs by mid-2005; the company says it has identified $450 million to date. In return, BASF plans to invest a total of $7.8 billion in capital expenditure, modernization, and maintenance in Ludwigshafen between now and 2009. Another $900 million, the firm says, will be spent on R&D during that time.

Ciba buys out South Korean partner ...


Ciba Specialty Chemicals has acquired the 50% it didn't own of Daihan Swiss Chemical Corp., a 23-year-old joint venture in South Korea. The deal is worth $27 million. With 225 employees, Daihan Swiss makes pigments and preparations for the domestic coatings, plastics, and ink markets. Ciba says the purchase will allow it to bring new, patented technology into the business.

... hands out R&D award

Ciba Specialty Chemicals' R&D Award 2004 has gone to an international team of Ciba researchers who used nitroxide-mediated polymerization to tailor-make block copolymers. The approach has led to commercialization of new polymers for pigment dispersant applications. According to Ciba, the customized polymer structure enables specific interaction with the pigment, resulting in improved stabilization, rheology, and color development.

Lion Bioscience plans staff cut

Lion Bioscience has announced a restructuring plan in which it will cut its workforce in half to between 50 and 70 employees by March 2006. Lion says it will consolidate its bioinformatics business in Cambridge, Mass., and its cheminformatics business in Cambridge, England. The informatics company currently expects a net loss of up to $20 million for fiscal-year 2004–05, which ends in March 2005, compared with a forecast loss of up to $14 million. The company says it aims to achieve profitability in fiscal 2005–06. The firm recently announced the appointment of Thure Etzold as CEO.

DyStar adds, restructures

In the midst of a restructuring program, dyes producer DyStar will acquire the German textile chemical company Rotta Group for an undisclosed sum. "The acquisition is the first step in the expansion of DyStar's product portfolio and means the company will now be able to offer customers a complete package comprising textile auxiliaries and colorants," CEO Clemens Willée says. Separately, DyStar announced that it will follow the general shift in the textile market to Asia. In the next three years, the company says, it will relocate and streamline its German facilities. According to local press reports, the company will trim some 800 jobs from its 1,800 in Germany. The company will also move some operations to Central Europe, establishing a logistics center in Budapest and a service lab in Central Europe "in the near future."

Shott companies named Excelsyn

The group of companies recently assembled by fine chemicals executive Ian D. Shott has adopted Excelsyn as its new corporate identity. Excelsyn, which employs 105 people at three U.K. locations, is involved in management consulting, engineering technology, and molecular development. "We are combining services and products that are relevant to the manufacture of pharmaceuticals ... in an integrated manner that is unusual in the industry," Shott says.

Roche partners with Emisphere

Roche plans to pay Emisphere Technologies, Tarrytown, N.Y., an up-front fee and future milestone payments of up to $18.5 million for each product developed that applies Emisphere's oral delivery technology, called Eligen. The small molecules involved in the partnership target bone-related diseases. Emisphere's synthetic compounds act as vehicles that facilitate the delivery of therapeutics across cell membranes.

Sareum in deal with Millennium

Sareum Holdings has entered an agreement with Millennium Pharmaceuticals under which Sareum will generate chemical compound libraries that support drug discovery at Millennium. Sareum says it will use computational chemistry, automated medicinal chemistry, and high-throughput purification to create the library under a fee-for-service deal. U.K.-based Sareum was formed in August 2003 by managers from Millennium's structure-based discovery department. The firm also has a deal with Inpharmatica in protein structure determination.

Output rises for chemicals

U.S. chemical production increased in October from both the previous month and October of last year, according to the Federal Reserve Board. The production index for all chemicals grew 0.4% from September and 6.3% from October 2003 to 113.1 (1997 = 100). Output in the important basic chemical sector rose 1.4% from the prior month to an index of 98.5. Basic chemical production was 5.3% ahead of the comparable month last year. The government's estimate of capacity utilization for all chemicals in October was 76.9%, up just a bit from 76.8% in September and from 73.5% a year earlier.

Icahn seeks to end Mylan's deal for King

In an attempt to undermine a deal between Mylan Laboratories and King Pharmaceuticals, financier Carl Icahn, through his investment firm High River LP, is now offering to buy Mylan for $5.38 billion. Mylan, a generic drugmaker keen on establishing a brand franchise, says it remains committed to acquiring King, a branded drug firm, for $4 billion. Icahn, who just increased his stake in Mylan to 9.8%, states in a letter to Mylan that King has a questionable track record and is a company that "Mylan should avoid at any cost." Mylan's board calls Icahn's letter a "self-serving publicity device" and urges shareholders to disregard Icahn's statements.

Solvay, CPC in carbonate link

Solvay and Chemical Products Corp. (CPC) are planning a joint venture in barium and strontium carbonates that would have annual sales of more than $130 million. The venture would integrate operations in Mexico, Germany, South Korea, and India. Certain Solvay specialty products and CPC's Cartersville, Ga., plant would not be included. Paul Dandoy, director of Solvay's barium/strontium unit, says the proposed venture is in response to a geographic shift in the business toward Asia and a technological shift away from cathode ray tubes, which use the two salts.

Bayer signs a hemophilia pact

Bayer's biological products division has signed a global technology license with Zilip-Pharma in hemophilia treatments. The deal involves the development and commercialization of a new, longer acting form of Bayer's Kogenate factor VIII using Zilip's PEGylated-liposome technology. Up-front and milestone payments from Bayer could total $100 million.


Avecia has sold its special drug mixtures business, centered on a line of nitroglycerin mixtures used in angina treatment, to Copperhead Chemical. Copperhead produces the nitroglycerin used by the business.

As expected, Huntsman Corp. has filed with the Securities & Exchange Commission for a proposed initial public offering of about $1.25 billion in stock. The company, which will follow Nalco and Celanese in going public, plans to use the funds to repay debt.

Lanxess has completed a $35 million investment program at its chloroformate plant in Dormagen, Germany. The company says it can now produce a variety of n-alkyl chloroformates with chain lengths of three to 22 carbon atoms.

The European Commission has approved Bayer's purchase of Roche's nonprescription drug business. Bayer has agreed to divest its Aspro and Aspro C analgesics in Austria. It will also divest the topical antifungals Caldesene and Desenex in Ireland.

The European Commission has cleared Repsol YPF's purchase of a Portuguese ethylene complex from Borealis. The complex has 350,000 metric tons per year of ethylene capacity and includes two downstream polyethylene plants.

Human Genome Sciences has appointed H. Thomas Watkins to the post of CEO. Watkins replaces William A. Haseltine, the founder of the company, who announced his retirement earlier this year.


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