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Business Concentrates

December 20, 2004 | A version of this story appeared in Volume 82, Issue 51

Symyx and Dow sign five-year deal for high-throughput R&D

Dow Chemical and Symyx Technologies have formed a five-year agreement to enhance R&D at Dow through high-throughput experimentation technology and informatics software provided by Symyx. Dow will pay Symyx about $120 million over the five-year period. Symyx says it expects that 40% of the money will be for services, 30% for products, and 30% for licenses. "Dow's R&D Council believes embracing high-throughput techniques throughout our organization and unifying R&D data under one informatics platform will make our R&D efforts more productive and innovative," says Kurt W. Swogger, Dow's vice president for plastics R&D. Symyx and Dow have worked together since 1999 in a collaboration that resulted in a new catalyst now used to make Versify elastomers and plastomers. Separately, Symyx and Univation, the technology licensing venture of Dow and ExxonMobil Chemical, will work together to develop Symyx sensor technologies for process monitoring and control in polyethylene production. If the effort is successful, Univation could start licensing the sensor in 2006, the companies say.

Japanese firms in plastics pact

As expected, Mitsui Chemicals and Idemitsu Kosan will combine their Japanese polyolefin plants into a new company that will be owned 65% by Mitsui and 35% by Idemitsu. The firms announced the deal in May, but they only recently received approval by the Japan Fair Trade Commission to finalize it. The new company, Prime Polymer, will start operations on April 1, 2005, and expects to book annual sales of $2.3 billion. Prime will be Japan's largest producer of polypropylene, with a 45% market share.

Shell advances in Singapore

Shell Chemicals will continue studying whether to build a world-scale ethylene cracker in Singapore. The project had initially been conceived as a joint venture with Sumitomo Chemical, but the latter pulled out in May when it announced that it would build a petrochemical complex in Saudi Arabia (C&EN, May 17, page 13). Shell says it may team up with the Singapore Economic Development Board as a partner in the project, which would be started in 2006 and completed in 2009. As part of the project, Shell would modify and expand its refinery on Singapore's Bukom Island and build an ethylene glycol plant. Sumitomo and Shell are 50-50 partners in Petrochemical Corp. of Singapore, which operates two ethylene crackers.

Merck details cost savings

A redesign of Merck's critical business processes will reduce the company's costs by more than $2 billion annually through 2008, company executives told securities analysts last week. By the end of the year, Merck expects to eliminate 5,100 positions, up from the 4,400 announced last year, lowering annual payroll and benefits costs by about $300 million per year beginning in 2005. The company will also save more than $600 million by reducing capital expenditures and using current resources more efficiently, $300 million through 2006 from enhanced supply-chain management, and $1.2 billion through 2008 by strengthening relationships with strategic suppliers.

Bayer, Teijin agree to swap polycarbonate

CDs and DVDs are a large market for polycarbonate.
CDs and DVDs are a large market for polycarbonate.

Teijin Chemicals and Bayer MaterialScience will supply each other with polycarbonate resin on a regional basis. Bayer produces Makrolon polycarbonate in Germany, Belgium, the U.S., and Thailand; Teijin makes Panlite polycarbonate in Japan and Singapore. Additionally, both companies are building polycarbonate plants near Shanghai. If successful, the cooperation can be expanded, the companies say.

Job losses at biotech firms

Inex Pharmaceuticals is cutting its workforce from 165 to 62 after FDA's Oncologic Drugs Advisory Committee voted not to support accelerated approval of Inex' drug candidate Marqibo. Marqibo is a combination of the off-patent medication vincristine and the firm's own drug delivery technology. A number of senior managers are resigning from the company. According to a statement, Inex needs to "drastically reduce" its size in order to continue to develop the drug. At V. I. Technologies, restructuring is under way to reduce the company's workforce by 40%. In November, the company halted enrollment in a Phase III study of Inactine because of an immune response in a sickle cell anemia patient. Inactine is the company's technique for inactivating a wide range of viruses, bacteria, parasites, and lymphocytes from red blood cells and for removing prion proteins.

Bayer selling plasma business

Bayer will sell its blood plasma products business to private investors Cerberus Capital Management and Ampersand Ventures. The business is headquartered in Research Triangle Park, N.C., and employs about 1,600 people. The purchase price is about $590 million, not far off the $600 million predicted by analysts last year, when Bayer said it would sell the business. Sales of the unit for the first nine months of 2004 were roughly $385 million. Bayer's Kogenate recombinant factor VIII business is not part of the transaction.

U.K. virtual center gets nod

Boosted by a $2.7 million grant from the European Union, a molecular modeling and visualization center will be established in the chemistry department at the University of Wales, Bangor. The only other such facility in the U.K. is at University College London. The Welsh project will provide what supporters dub a "cutting-edge research center" to investigate the world of quantum and virtual chemistry. Chemistry department head John N. Macdonald says the center will establish "a first-class infrastructure to help attract new, ambitious, inward investors in the high-tech materials business."

BASF to revamp superabsorbants

BASF will reshape its North American superabsorbent polymers (SAP) business by building a new plant in Freeport, Texas, where the company makes raw material acrylic acid. The plant will open in mid-2007, after which BASF will close existing SAP plants in Aberdeen, Miss., and Portsmouth, Va., that employ a combined 230 people. The new plant, of undisclosed size, will use technology that the company debuted in 2002 in Antwerp, Belgium.

Rhodia buys chlorine maker

Rhodia will acquire the Chloralp business of LaRoche Industries, bringing a troubled relationship to an end. Chloralp supplied chlorine to Rhodia in France under an agreement begun in 1997 when Chloralp was established as a joint venture between the two firms. It became a wholly owned LaRoche unit in 1999. But in October, Chloralp stopped supplying chlorine to Rhodia, complaining that the deal was no longer cost-effective. Supplies resumed after court action, with Rhodia ordered to pay Chloralp $54 million. According to Rhodia, the acquisition will cost less than $16.5 million. Ironically, the deal comes just weeks after Rhodia agreed to sell its U.K. chlor-alkali and sulfuric acid plants to Ineos Chlor. Ineos will supply Rhodia from the plants for a limited period, after which the entire site will be closed.

Production rises again

Total U.S. chemical production increased in November, according to seasonally adjusted data from the Federal Reserve Board, but output in the important basic chemicals sector declined from the previous month. November production of all chemicals increased 0.5% from October to an index of 113.9 (1997 = 100) and was up 5.2% from the comparable month in 2003. Meanwhile, the production index for basic chemicals fell 0.7% from the previous month to 97.7, although it was still 5.5% ahead of its level in November a year earlier. The government's estimate of seasonally adjusted capacity utilization for all chemicals increased to 77.3% in November from 77.0% in October and 74.8% in November 2003.

Solvay buys Mexican pharma

Solvay Pharmaceuticals has entered the Latin American pharmaceuticals market with the purchase of privately held Italmex. The Mexico City-based firm had 2003 sales of $21 million and employs nearly 400 people. Solvay says the acquisition lets it more easily introduce its own portfolio of drugs in Latin America because the two firms overlap in areas such as gastroenterology, cardiology, and mental health. Separately, Belgian press reports say Solvay is considering another drug buy: the privately held French firm Fournier Pharma. Fournier had 2003 sales of $746 million, mostly from outside of France.

Dow buys into LNG project

Texas LNG Holdings, a Dow Chemical subsidiary, has acquired a 15% stake in Freeport LNG Development, a venture that wants to build a liquefied natural gas receiving terminal on Quintana Island near Freeport, Texas. Dow signed a 20-year agreement with the terminal in 2003. "Our nation clearly needs a greater supply of natural gas to meet demand," says B. J. Sumrall Jr., head of the Dow subsidiary. "LNG is an essential part of the answer to this problem."

Nanomix licenses UCLA technology

Nanomix has signed an exclusive agreement with the University of California, Los Angeles, to license technology for creating nanostructured electronic devices for the detection and identification of biomolecules such as DNA and proteins. Invented by UCLA physics professor and Nanomix chief scientist George Grüner, the technology will be used in developing sensors for medical, diagnostic, industrial, and forensic applications. Nanomix says it will pursue R&D to move the technology from early-stage feasibility studies to product development.


Mitsubishi Chemical will idle an unprofitable 55,000-metric-ton-per-year caprolactam unit in September. The plant is at the firm's Kurosaki, Japan, complex.

Lubrizol has elected James L. Hambrick, 49, as chairman, effective Jan. 3, succeeding William G. Bares, 63. Hambrick retains the titles of president and CEO.

Bear Stearns Merchant Banking Partners has named Kumar Shah a strategic adviser. The former Noveon senior vice president will assist the private equity fund in making chemical business acquisitions.

Uma Chowdhry, DuPont's vice president of central R&D, will add to her responsibilities at the Wilmington, Del., Experimental Station by taking charge of all corporate research programs as well as the firm's Apex long-term research initiatives.

Bayer MaterialScience has signed a 15-year agreement with Linde for supplies of hydrogen and carbon monoxide at Bayer's sites along the Rhine River. The deal is worth nearly $80 million.

BASF has selected Sopheon to supply process management software for product development. Sopheon's Accolade software will be installed for 1,500 users in research and marketing.

Potash Corp. of Saskatchewan has agreed to buy Israel Chemicals' stake in SQM, the Chilean fertilizer and iodine producer, for $100.4 million. PCS already owns 20% of SQM, and Chilean securities regulators are asking PCS to declare its intentions toward the firm.


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