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Corporate streamlining efforts are prompting three companies to close U.S. chemical plants. Rohm and Haas will close its Wytheville, Pa., powder coatings facility and consolidate production at plants in Warsaw, Ind., and Reading, Pa. The company says rising raw material costs, industry overcapacity, and an inability to raise prices forced the closure. About 70 employees will be affected. W.R. Grace plans to exit the specialty polymers business and has notified about 60 employees that it plans to shutter the Owensboro, Ky., plant where the polymers are made. The plant may yet survive, as "outside parties" are interested in acquiring it, a Grace spokesman says. Bayer MaterialScience is closing a 110 million-lb-per-year toluene diisocyanate plant in New Martinsville, W.Va. The company plans to continue making other isocyanates and polyols at the location, where TDI has been made since the mid-1950s. Some 30 affected employees will be reassigned to other jobs. Bayer says it will transfer production to other, larger plants.
Sumitomo Chemical, fresh from its purchase of Dow Chemical's organic light-emitting diode (OLED) business, is forming a joint venture with Cambridge Display Technology for the development and supply of polymer OLED materials and formulated inks for display and lighting applications. The 50-50 joint venture will be headquartered in Tokyo and will have rights to intellectual property from its parent companies. The partnership will have access to the polyfluorene technology developed separately by both Dow and CDT. It will also have access to "next generation" dendrimer chemistry that CDT received through its purchase of Opsys in 2002. Sumitomo took an equity stake in CDT in 2002.
Sumitomo Chemical will build a third methyl methacrylate (MMA) line in Singapore at a reported cost of $185 million. The company expects the unit, with annual capacity of 90,000 metric tons, to open in 2008. Sumitomo will also build a 50,000-metric-ton MMA polymerization plant. Sumitomo says demand for the materials is growing 7% annually in Asia, primarily for use in electronic devices, cars, and home appliances.
The continued existence of Acordis Group's acrylic fiber operations in the U.K. is in jeopardy, according to U.K. audit and management services firm Deloitte & Touche. Neville Kahn, who is leading a government-supervised team in the British equivalent of a bankruptcy reorganization, says Deloitte is talking with customers, suppliers, and employees, "with our primary objective being the survival of the company as a going concern." The unit employs 475 people at sites in Grimsby and Bradford. They will continue to operate while Deloitte looks into restructuring or selling the business. Majority-owned by CVC Capital Partners, Acordis has been pursuing a strategy of selling off its various units, which are mostly former Akzo and Courtaulds fiber businesses.
Effective July 1, DuPont Dow Elastomers will become a DuPont subsidiary called DuPont Performance Elastomers. The name change follows the dissolution of the joint venture between DuPont and Dow Chemical, which in turn follows a government investigation into the fixing of prices for some of the products the venture made. John R. (Jack) Lewis, DuPont Dow Elastomers' current CEO, will continue in that role with the new subsidiary.
British technology commercialization specialist IP2IPO has acquired a 44.3% stake in Oxford NanoLabs Ltd. (ONL), a spin-off from the University of Oxford's chemistry department. Focused on biosensing, ONL uses its protein-pore-based NanoPore technology for the detection of a range of medically important molecules. The company's objective is to develop a series of products--initially handheld diagnostic devices for medical testing and eventually applications in counterbioterrorism and gene sequencing. The underlying science was developed in the research labs of Hagan Bayley, previously at Texas A&M University and named professor of chemical biology at Oxford in 2003. ONL has appointed Gordon Sanghera, formerly global marketing director at Abbott Laboratories, as CEO.
Lanxess is wrapping up the first stage of a program to expand capacity for neodymium-catalyzed polybutadiene rubber (Nd-PBR) at plants in Port Jérôme, France, and Orange, Texas. The company will modify existing lines to enable production of multiple grades, including Nd-PBR, lithium-PBR, and solution styrene-butadiene rubber on the same line. In the second and third stages of the project, more production lines will be modified to manufacture Nd-PBR and to increase capacity for solution styrene butadiene rubber. Separately, Lanxess will add capacity in Wuxi, China, for compounding its Durethan nylon and Pocan polyester semicrystalline plastics in the first quarter of next year. Lanxess will produce about 20,000 metric tons per year of the compounded plastics at the site.
ICI has no plans to sell any of its major businesses, Chairman Peter Ellwood told shareholders at the company's annual meeting last week. Ellwood noted, however, that "where we can create greater value for shareholders by selling off parts of businesses which are worth more to others than to ourselves, and which are not core to our strategic growth, then we will do so." That philosophy was behind the sale of Quest's food ingredients business and National Starch's Vinamul business, moves that helped trim the company's debt to below £1 billion--roughly $1.88 billion--at the close of 2004. Ellwood said the company has "cautious optimism" about business conditions in 2005.
Merck has signed a license agreement with the Italian biopharmaceutical company BioXell under which Merck will develop products directed at TREM, or triggering receptors expressed on myeloid cells, a receptor class that BioXell says is implicated in many diseases, including sepsis. Merck will obtain rights to BioXell's first product, now in preclinical development. BioXell, which was spun off from Roche in 2002, will get an up-front payment and milestone payments of as much as $150 million.
Octel Corp., the world's leading producer of the gasoline additive tetraethyl lead, says a major customer has canceled its purchase orders for May and that the customer may have accelerated the phaseout of leaded gasoline in motor vehicles, possibly to as early as this year. Octel's sales to this customer were $63.6 million last year, out of total sales of $481 million. The firm is pursuing a strategy of diversifying into petroleum specialties and performance chemicals while the market for tetraethyl lead declines.
After declining in March, total U.S. chemical production increased again in April, according to seasonally adjusted data from the Federal Reserve Board. The production index for chemicals improved 0.4% from March to 112.6 (1997 = 100). The April index was up 2.9% from the same month in 2004. Thus, April capacity utilization increased to 76.5% from 76.3% in the previous month and from 75.4% in April 2004. The production index for basic chemicals in April was 96.0, up 2.5% from March, but only 0.6% ahead of April last year.
The Icelandic generic drug company Actavis has agreed to acquire the New Jersey-based generics firm Amide Pharmaceutical for $500 million plus up to $100 million more, depending on performance. Actavis had sales last year of some $570 million, versus $110 million for Amide. Actavis CEO Robert Wessman says the purchase furthers his firm's goal of becoming "one of the world's leading generic pharmaceutical companies." The combined company will market more than 500 products, Actavis says.
South Africa's Sasol and Singapore's Wilmar have signed a memorandum of understanding to build a 60,000-metric-ton-per-year fatty alcohol plant in Lianyungang, a port city in China's Jiangsu province. Sasol is the world's largest producer of fatty alcohols, while Wilmar is a major processor of soy and tropical oils such as palm oil. The plant, set to open by mid-2007, will be fed by a Wilmar fatty acid unit at the same location. Recent years have seen a boom in construction of Asian fatty alcohol plants that make use of natural feedstocks (C&EN, Jan. 24, page 21).
LG Chem and partners will spend $300 million to build plants in China for polyvinyl chloride raw materials. The units, in Tianjin, include a caustic soda plant, an ethylene dichloride plant, and a vinyl chloride plant. The vinyl chloride will feed LG Dagu, an LG subsidiary that operates a PVC plant nearby. In addition to proximity to LG Dagu, LG and its partners say they selected Tianjin because of local availability of the starting materials electricity and salt. Ethylene, another key material, will be imported mostly from South Korea and Japan. The new units are expected to open at the end of next year.
Hitachi Chemical will spend about $5 million to expand by 30%, to 2,600 metric tons, its annual capacity for chemical mechanical planarization slurries. The slurries are used in the manufacture of high-end semiconductors.
BASF will open a technical center for refinery chemicals on the campus of Gubkin State University of Oil & Gas in Moscow. The firm says the center will allow it to respond to the specific demands of the local market.
VioQuest Pharmaceuticals has opened a pilot plant in Jiashan, China, capable of making 100-kg batches of chiral building blocks and catalysts. The firm says the facility is staffed mostly by Ph.D. and M.S. chemists.
Pfizer and Isis Pharmaceuticals are collaborating to develop antisense drugs for ophthalmic disease. Isis is slated to receive a technology access fee of $1 million, research funding, and milestone payments.
Asahi Glass will spend $17 million to boost capacity for its Aflas-brand fluoroelastomer 50% by next March. The product is used mainly as covering material for electric cables and as an oil seal in cars and trucks.
DuPont will spend $12 million in South Korea on a market development facility for nonwoven products. The firm says the facility will further its objective of more clearly addressing Asia-Pacific market needs.
Codexis and Bristol-Myers Squibb have formed a research agreement to improve biocatalyst productivity for an undisclosed drug candidate in BMS's pipeline. Codexis will receive funding and undisclosed milestone payments.
MDS Nordion and Macrocyclics have entered a three-year research agreement to develop bifunctional chelates for use in molecular imaging and targeted therapeutics. The chelates will link a radioisotope to an antibody or other molecular targeting agent.
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