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Business
Solutia to Keep Pharma Services
Bankrupt company claims commitment to a small business in a tough sector
by Rick Mullin
April 25, 2005
| A version of this story appeared in
Volume 83, Issue 17
FINE CHEMICALS
Solutia says it is determined to hold onto its Pharmaceutical Services business after completing a review of its Solutia Europe subsidiary, which includes the Swiss-based fine chemicals operation.
The bankrupt company said last year that it is exploring a possible sale of part of the pharma services unit, which it assembled in 2000 through the acquisition of CarboGen Laboratories and AMCIS (C&EN, July 19, 2004, page 5).
"CarboGen and AMCIS are a small but profitable part of Solutia's portfolio," said Solutia CEO Jeffry N. Quinn. "We have concluded that we can maximize value for the stakeholders by continuing to own and operate this business."
Last year, the company completed construction of a manufacturing facility for high-potency active pharmaceutical ingredients in Bubendorf, Switzerland. The Pharmaceutical Services group accounts for less than 2% of Solutia's annual sales, which were $2.7 billion in 2004.
In recent years, several diversified firms have sold or downsized their fine chemicals businesses, and the trend continues.
GenCorp, for example, announced last year that it is looking for a buyer for its Aerojet Fine Chemicals unit. And EaglePicher, a diversified services and technology company with a pharmaceutical chemical operation, says it is currently looking for a buyer for certain unspecified units. The firm filed for Chapter 11 bankruptcy earlier this month.
Last year, Kemira sold its fine chemicals subsidiary to a London-based venture-capital company for $85 million.
Peter Pollak, a private consultant and former head of Lonza's pharmaceutical fine chemicals operation, says that unfavorable business conditions in fine and custom chemical manufacturing persist. "Every [company] is calling for consolidation," he says, "by its competitor, of course."
Pollak says a bright spot is the announcement of a restructuring program at Pfizer, which may result in increased outsourcing by the drug firm (C&EN, April 11, page 8).
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