Business Concentrates

Huber to buy Hercules' stake in biogums maker CP Kelco

Minerals and specialty chemicals maker J. M. Huber has signed an agreement to buy Hercules' 29% stake in CP Kelco, a maker of xanthan gum, pectin, and carrageenan. Terms of the transaction were not disclosed. Hercules and investment fund Lehman Brothers Merchant Banking Partners formed CP Kelco in 2000 from Hercules' food gums division and Monsanto's Kelco biopolymers business. The transaction would enlarge Huber's investment in hydrocolloids. Huber--a closely held family-owned firm--acquired its share of the market for the hydrocolloid carboxymethylcellulose in 2001 when it bought Finnish CMC maker Noviant. Some observers speculate that Huber could eventually buy all of Kelco when the investment fund chooses to monetize its holding. However, Hercules will continue in hydrocolloids as a North American, European, and now Asian CMC producer. In December, it bought Quantum Hi-Tech, a CMC producer in Jiangmen City, Guangdong province, China; Chief Operating Officer Craig A. Rogerson called Quantum a platform for growth in Asia for the firm's cellulose ethers business through its Aqualon water-soluble polymers franchise.

Bader heads Cargill Dow

Kathleen M. Bader, 53, has been named chairman, president, and CEO of Cargill Dow, the maker of corn-derived polymers owned jointly by Dow Chemical and agribusiness giant Cargill. Bader replaces Randy Howard, who retired last month. She will be charged with taking the technical achievements of the joint venture and turning them into commercial successes, according to Dow President Andrew N. Liveris. At Dow, Bader had been group president for the styrenics and engineered products business, which has roughly $4 billion in annual sales. She started working for Dow in 1973 and was the second woman hired when the firm began including women in its commercial ranks.

Euro Chlor sets goals

European producers of chlorine have detailed the sustainability goals that an industry-wide initiative has set for 2010. Euro Chlor, the European federation representing almost all chlorine production in Western, Central, and Eastern Europe, announced the goals at a workshop organized by the German Federal Environmental Agency in Dessau, Germany, last week. The industry aims to significantly cut total manufacturing emissions of 22 chlorinated organic compounds, chosen because they appeared most frequently on priority target lists for emissions reductions by various regulatory authorities in the 1980s and 1990s. Goals are cuts of 75% in emissions to water and 50% to air, compared with the 2001 base-line. The cuts will come, Euro Chlor officials note, despite continued strong production of chlorine and its derivatives.

Wacker readies Siltronic IPO

According to German press reports, Wacker-Chemie is preparing an initial public offering of shares in Wacker Siltronic, which makes very pure silicon for the semiconductor industry. Industry observers say Wacker probably will spin off the division, to be called simply Siltronic AG, in the second half of the year or by the beginning of 2005 at the latest. The unit has sales running at about $1.25 billion per year.

REACH faces delays

The long-running saga of chemicals regulation in Europe, where officials are seeking to launch the REACH program--Registration, Evaluation & Authorization of Chemicals--continues. The proposals, officially unveiled by the European Commission at the end of October, have now moved on to the European Parliament, which must debate and further shape the legislation. And just as there were turf disputes within the EC between the directorates for environment and enterprise, so there is a wrangle now between three committees in the European Parliament. Committees responsible for environment, industry, and legal affairs all are seeking to have the lead role in shaping the legislation. The result is that it seems unlikely REACH will make it through the parliament before its final session in April, when the current session closes prior to European Parliament elections.

Asahi Glass to supply stadium

Asahi Glass will supply Fluon ETFE-brand fluororesin foils to the Allianz Arena in Munich, Germany. The stadium, with a seating capacity of 67,000, will host the opening match of soccer's 2006 World Cup. It will be the world's largest stadium using fluororesin foils for its walls and roof. Allianz Arena officials were looking for a weather-resistant, translucent material that could be shaped into smooth curves.

EU spurs 'Biobiz'

The European Union has launched its fourth series of "Biobiz" workshops to support biotech entrepreneurs in forming new companies. The workshops, part of the EU's Sixth Research Framework Program covering 2002–06, aim to provide scientists in the region with the knowledge and tools to create new companies in the life sciences and biotechnology sectors. Training in the workshops focuses on issues such as access to capital, technology transfer, business plans, business-related regulation, and business incubators. Workshops--the first will be held in Cambridge, England, in March--have been scheduled over the next three years for countries throughout the EU and in countries lined up to join the EU over the next few years. There is even one scheduled to be held in Boston in October 2005, and another in San Diego, a year later.

Prices rise in December

U.S. chemical prices advanced again in December, according to data from the Labor Department. The government reports that the producer price index for chemicals and allied products rose 0.7% to 163.3 (1982 = 100) from November. The December index was up 5.3% from the same month in 2002. Meanwhile, the index for industrial chemicals was 143.3, up 1.9% from the previous month and 8.3% ahead of where it stood 12 months earlier. The index for all chemicals averaged 161.8 for the full year, up 6.5% from 2002, while the average index for industrial chemicals increased 11.4% to 141.8.

Jerini partners on cancer drug

Merck KGaA, Darmstadt, Germany, and Jerini, Berlin, have announced an agreement to jointly develop small-molecule inhibitors against an undisclosed target for oncology. The companies will work on further developing a small-molecule lead series identified by Jerini using a peptide-based screening methodology that it developed as an alternative to protein-based screening in drug discovery. The agreement calls for Jerini to receive an up-front payment, milestone payments, and royalties and grants Merck worldwide rights for all indications in cancer, cardiovascular diseases, diabetes, and thyroid disorders. Jerini could receive more than $63 million if a product is commercialized.

Givaudan restructures

Flavors and fragrances specialist Givaudan will take a one-time charge of nearly $55 million in 2003 to cover the company's restructuring program. Various projects to enhance cost-efficiency have been defined and approved, and some have already been started, the company says. As part of the cost-improvement program, the company will cut some 300 jobs through attrition and retirement. The eventual goal is annual savings of $54 million; the company expects to achieve savings of $38 million this year.

Japan takeover try thwarted

U.S. investment group Steel Partners has failed in its attempt to take over Yushiro Chemical, a publicly listed Japanese producer of process chemicals for the steel industry. When Steel Partners made its $150 million offer in December, the management of Yushiro turned it down and announced that the firm would distribute all its future earnings--minus directors' pay--to its shareholders in the form of a dividend. Yushiro further pledged to pay out some of its retained earnings as a special dividend. The payout policy led to an increase of more than 50% in the market value of Yushiro's stock, in excess of what Steel Partners had offered in its tender. Although the bid failed, the rise in Yushiro's stock price was beneficial for Steel Partners, which already owned nearly 9% of Yushiro.

P&G to market fatty alcohols

Procter & Gamble Chemicals has signed a long-term agreement with PT Domas Agrointi Prima, part of Indonesia's Sawit Mas Group, under which P&G will market fatty alcohols to be made in a 40,000-metric-ton-per-year plant that Domas is building in Kuala Tanjung, Sumatra. P&G values the supply agreement at close to $200 million. The plant, to open in late 2004, is part of Sawit Mas's "move into oleochemicals as a way of adding value to our Indonesian vegetable oil [business]," Chairman Susanto Lim says.

BUSINESS ROUNDUP

Westlake's 450 million-lb-per-year ethylene unit in Calvert City, Ky., will be out of commission for a few weeks because of a two-day fire. The cause of the fire is under investigation. Polyvinyl chloride and chlorine units at the site are operating at reduced rates. The outage will reduce earnings by $6 million to $10 million.

Sirna Therapeutics has announced an 18-month collaboration pact with Eli Lilly focused on developing cancer drugs. Under the terms of the agreement, the firms will investigate Sirna's proprietary modified small interfering RNAs (siRNAs) against specific targets provided by Lilly.

Dynea has appointed Roger Carlstedt as president and CEO, effective Jan. 22. Carlstedt was recruited from Sweden's ABB, where he was business area manager for ABB Utilities. He succeeds Ølvind Isaksen, who will take on new, as-yet-unspecified responsibilities within the Finnish specialty chemicals producer.

Ultrafine has scheduled March 2004 for completion of the expansion of its site in Manchester, in northern England. The custom synthesis firm's expansion includes a lab that will have the flexibility to operate from a milliliter to 20-L scale. The lab follows recent construction of another Good Manufacturing Practice facility with reactors of up to 200-L capacity.

Israel's Teva Pharmaceutical has completed its $3.4 billion purchase of generic drugs producer Sicor, following clearance by the U.S. Federal Trade Commission. The buy makes Teva one of the world's largest generics drugmakers.

Noveon has sold its solvent-based polyurethane product line, made in Leominster, Mass., to Soluol. Noveon is transferring the water-based polyurethanes made in Leominster to Avon Lake, Ohio, and says it chose to sell the solvent line rather than relocate it.

Ricerca Biosciences is collaborating with the Cleveland Clinic on a therapy that uses vitamin B-12 as the carrier for nitric oxide, a cancer-killing agent. The partners' goal is to find a drug company interested in taking the compound to market.

Air Products has sold its methylene diphenyl diisocyanate business for an undisclosed sum to ITWC, a Malcom, Iowa-based supplier of prepolymers, systems, and equipment to the urethane industry. ITWC has been producing all MDI offerings for Air Products for the past eight years.