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Business Concentrates

February 23, 2004 | A version of this story appeared in Volume 82, Issue 8

Total to carve new company out of Atofina chemicals unit

French oil giant Total is combining 13 business units of its Atofina chemicals arm into a new company that it will eventually divest. The planned unit had sales of more than $6 billion last year--about 30% of Atofina's total sales--and includes operations such as thiochemicals, fluorochemicals, oxygenated products, acrylics, and engineering polymers. It is set to start up in October under the leadership of Atofina executive Thierry Le Hénaff. Atofina's previous plans were to sell many of the 13 businesses piecemeal. According to a company statement, "The new company will ... have the opportunity to play an active role in the consolidation of the chemical industry." Total Chairman Thierry Desmarest said at the firm's annual results conference last week that he expects the chemicals unit to be sold or spun off in the next two to three years. In contrast, the company reaffirmed its desire to hold onto its petrochemicals business, which it sees as synergistic with its core refining operations and its specialties operations, which have maintained "a satisfactory performance."


Sanofi posts strong results

Sanofi-Synthélabo presented strong sales and growth figures for 2003 at an annual results meeting last week that also spotlighted advances in its R&D pipeline. Industry watchers viewed the presentation in the context of Sanofi's hostile bid to take over Aventis, which had paraded its pipeline before analysts two weeks earlier. Sanofi CEO Jean-François Dehecq reported that net profit rose 18% to $2.7 billion on an 8% increase in sales to $10.3 billion. The firm predicts comparable growth for 2004. Aventis has spurned Sanofi's $58.6 billion bid, claiming it is too low and that the deal would hamper the company's growth. Aventis' board unanimously rejected the bid last week and recommended that shareholders not tender shares.


DPI expands Pfizer deal

Discovery Partners International has signed a multiyear chemistry deal with Pfizer that replaces and expands a two-year-old agreement. Under the new pact, DPI will deliver pharmaceutically relevant compounds for Pfizer's exclusive use. DPI says it will provide a broader range of compounds than in the past and that it will also deliver follow-up compound libraries for drug lead optimization. DPI had $48 million in sales to Pfizer between 2002 and 2003, more than half its total sales. It expects sales under the renewed contract of at least $43 million over the next two years. DPI competitor ChemBridge also recently renewed its contract with Pfizer (C&EN, Feb. 16, page 16).


Cuts set at main DSM site

DSM will reorganize its headquarters site in Geleen, the Netherlands, over the next two years in an effort to cut costs by more than $60 million annually. About 500 jobs in support services will be lost at the site, but shift workers will not be affected, the company says. As part of the reorganization, a separate "landlord" organization is to be set up with responsibility for further development of the site, home to both DSM and Saudi Basic Industries, which two years ago acquired DSM's petrochemical operations there.


Train blast in Iran kills 300

A train derailment and subsequent fire and explosion near Neyshabur, Iran, killed more than 300 people and injured 450 last Wednesday morning, according to Iran's state-run Islamic Republic News Agency. The train, carrying fuel, fertilizer, and industrial chemicals, derailed and caused a fire to break out in about 50 cars. As firefighters were putting out the flames, a massive blast occurred that could be felt 50 miles away. Mud-based housing construction--similar to the construction that contributed to deaths in Bam, Iran, in an earthquake last December--is said to have led to building collapses and casualties in villages near the explosion.


Dow to make peptides in green plants

Dow Chemical will work with the drug delivery company Nobex on the plant-based production of NLC-001, a peptide currently in preclinical development as a potential appetite suppressant. The work will start in plant cell suspensions and be moved to whole plants if successful. Nobex will conjugate the peptide to its proprietary delivery polymer for oral administration. Carolyn Fritz, Dow's general manager for industrial biotechnology, notes that the deal expands the scope of Dow's plant biopharmaceuticals business beyond antibodies.


Court upholds patent verdict

A three-judge panel of the U.S. Court of Appeals for the Federal Circuit, in Washington, D.C., has affirmed a trial court's decision invalidating a University of Rochester patent covering the use of COX-2 inhibitors to treat inflammation. The school received the patent in April 2000 and immediately sued Pfizer for royalties on sales of its Celebrex COX-2 inhibitor. Rochester appealed the trial court's March 2003 ruling and now says it will ask the full federal appeals court to hear the case.


Huntsman, Jacobs set to receive awards

Jon M. Huntsman, chairman of Huntsman Corp., and Madeleine Jacobs, ACS CEO and executive director, will receive awards on June 17 at the Chemical Heritage Foundation in Philadelphia. Huntsman will pick up the 2004 Othmer Gold Medal. Past winners have included petrochemical entrepreneur Ralph Landau; P. Roy Vagelos, former Merck chairman; and Gordon E. Moore, Intel chairman emeritus. Jacobs will secure the Commercial Development & Marketing Association Award for Executive Excellence. Past winners include Carl A. Jennings, retired BASF vice president, and Raj L. Gupta, Rohm and Haas CEO.

Shell pares ethylene oxide

Shell Chemicals is closing one of its three ethylene oxide/glycol units in Geismar, La., by the end of the year. The company says it can't justify the improvements needed on the plant, which was built in the 1960s. Customers will not be impacted by the closure, Shell says, because it recently increased ethylene oxide purification capacity at the site and has entered into agreements for additional supply. The company says it is studying further ethylene oxide purification expansion in Geismar, is expanding an ethylene oxide unit in the Netherlands, and is mulling over a new unit in Singapore.


Production up in January

U.S. chemical production in January continued the momentum seen in the last half of 2003, posting its sixth month-to-month increase out of the past seven months. The production index for all chemicals increased 0.6% from December to 108.5 (1997 = 100), according to seasonally adjusted data from the Federal Reserve Board. On an annual basis, chemical output was up 3.8% from January 2003. Basic chemical production rose 0.9% both from December and from January 2003 to an index of 93.8. The government's estimate of seasonally adjusted capacity utilization in January was 74.8% compared with 74.5% in December and 72.8% in January of last year. 

Venture funding declines again

Venture-capital investments last year in start-up companies declined in both the U.S. and Europe, according to recent surveys. Investors poured $18.2 billion into 2,715 U.S. companies in 2003, down 15% from the year before, according to the MoneyTree Survey from PricewaterhouseCoopers, Thomson Venture Economics, and the National Venture Capital Association. However, U.S. biotechnology firms ran counter to the trend, garnering funding of $3.4 billion, up more than 20%. Only software firms attracted more cash--$3.6 billion--than biotech firms in 2003. Investors in European start-ups lobbed $5.5 billion at 1,039 deals, according to the VentureOne/Ernst & Young European Venture Capital Report, down 23% from 2002.

Konarka wins DARPA award

Konarka Technologies has been picked by the Defense Advanced Research Projects Agency to lead a consortium of academic and national laboratories in the development of new materials for hybrid photovoltaics. Konarka will manage the contract and share the more than $6 million award with Arizona State University; the University of Massachusetts, Lowell; and the U.S. Army Soldier Systems Center, Natick, Mass. Konarka, a developer of polymer photovoltaics, says hybrid photovoltaics are at the intersection of dye-sensitized cells, developed by Michael Grätzel, and polymer cells, developed by Alan J. Heeger.

BP, Basell in license deals

BP has licensed its Innovene polypropylene process to Sasol's polymers division, which will use it to build a 300,000-metric-ton-per-year polypropylene plant in Secunda, South Africa, by 2006. Sasol will use BP's high-activity catalyst technology with the process. Separately, Basell has licensed its Hostalen technology to Russian petrochemical firm Salavatnefteorgsintez, which will use it to build a 120,000-metric-ton high-density polyethylene plant in Salavat, in the Republic of Bashkortostan, also by 2006.

BP to exit historic site

BP is selling its isopropanol business to ExxonMobil Chemical and closing its last plant in Baglan Bay, Wales. Production of isopropanol at the site will stop on March 31, ending more than 40 years of chemical manufacturing there. Some 55 jobs will be lost. BP says the site is not viable due to its small scale and lack of feedstock and product integration. Employment in Baglan Bay peaked at almost 2,500 in 1974; the company closed its ethylene cracker and associated plants in 1994.


  • Stepan Co. has entered a joint venture with Jinling Petrochemical, a Sinopec company, for the manufacture of aromatic polyester polyols in China. Jinling's plant in Nanjing will join Stepan's plants in Millsdale, Ill., and Wesseling, Germany. 

  • Praxair's Latin American subsidiary, White Martins, is forming a joint venture with Brazil's Petrobras for the marketing of liquefied natural gas in areas of Brazil not covered by pipelines. White Martins will build a $38 million gas liquefaction plant in Paulínia by 2005. 

  • Cargill will double capacity for vegetable oil-based esters at its Chicago plant by March 1. The company says the expansion will help it meet growing demand for lubricant products and for biobased intermediates used in paints and coatings in place of volatile organic compounds.

  • DuPont has acquired Retrim, a maker of polyvinyl butyral safety glass interlayer. The firm employs 50 people at its factory in Zlin, Czech Republic.

  • Clariant will increase its capacity for glyoxylic acid by 20% in Lamotte, France. The boost will come through two successive sets of process improvements, which are scheduled to be fully implemented by the beginning of next year.

  • Cabot Corp. will build a third carbon black unit in Maua, Brazil, expanding its capacity there by 60% to 120,000 metric tons per year. The $25 million addition is set to open in late 2005.

  • Mitsui Chemicals Aqua-Polymer has agreed to acquire Sumitomo Chemical's polymer flocculant business, Sumika Alchem. Production of Alchem's flocculants will be transferred from Ehime, Japan, to a Mitsui facility in Mobara, near Tokyo.

  • Syngenta has bought Mitsubishi Chemical's majority stake in Dia-Engei, a flower and vegetable seeds business that the two companies set up in 1989. Dia-Engei recorded sales of $8 million last year. Syngenta's stake in the business was 33%.


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