Business Concentrates

Altana to acquire Eckart and spin off its chemical business

Altana AG will acquire Eckart GmbH, a German producer of metallic pigments and inks, for roughly $760 million in cash. The acquisition of Eckart, which had sales last year of about $375 million, will give the company's chemicals arm, Altana Chemie, a fourth business area. But more important, it will give Altana Chemie significant enough sales, employees, and plant presence worldwide that the business will be spun off as an independent company, Altana Chemie CEO Matthias L. Wolfgruber says. The expanded chemical company would have had 2004 sales of $1.44 billion fairly evenly divided among four business areas: Byk Chemie additives and instruments, 30%; Eckart effect pigments, 26%; electrical insulation, 25%; and coatings and sealants, 19%. The split is expected to occur next year, allowing Altana AG to concentrate on its pharmaceutical businesses. According to Altana AG CEO Nikolaus Schweickart, more than $1.2 billion will be available to the pharma business for acquisitions, cooperations, and alliances.

Süd-Chemie says no to offer

Süd-Chemie's managing and supervisory boards have recommended that shareholders not accept an offer by One Equity Partners, an investment arm of J.P. Morgan Chase, to sell their shares for 35 euros (about $43) apiece. One Equity announced in June that three Süd-Chemie shareholders had agreed to sell their combined 39% stake in the company for that price and that it would make the same offer to all shareholders with a goal of acquiring majority ownership in the firm. The boards say they have concluded that "the cash consideration of 35 euros per share offered by the bidder does not represent a reasonable price."

Chemtrade buys Peak companies

Chemtrade Logistics, a Canadian industrial chemicals maker, has purchased Peak Chemical and Peak Sulfur for a combined $167 million. Peak Chemical, formerly part of FMC, is a maker of phosphorus pentasulfide with first-half 2005 sales of $9.4 million. Peak Sulfur, composed of former Arch Chemicals and Koch Industries assets, makes sulfuric acid and had first-half 2005 sales of $27.9 million. The chairman of the Peak firms was Michael R. Boyce, who recently became CEO of PQ Corp.

BASF raises 2005 outlook

BASF has raised its outlook for full-year 2005, said Chairman Jürgen Hambrecht in reporting the company's first-half 2005 results last week. BASF expects "significantly higher sales" and an increase in pretax earnings before special items, compared with an already strong 2004. In all the company's segments, Hambrecht said, BASF saw double-digit percentage increases in second-quarter pretax profits, with profits in its chemical segment up by 22%, before special items, on sales up by 15%. The fine chemicals business, part of the agricultural products and nutrition segment, was unsatisfactory, he conceded, with sales down by 7% compared with second-quarter 2004, and earnings down by nearly 80%. The main problem, he said, was the low price of lysine, which has halved since second-quarter 2004. Restructuring projects begun in the business mean that "in 2006, we will see improvements," Hambrecht promised. He also predicted that BASF's plants in Nanjing, China, will turn a profit beginning next year, by which time China will account for roughly 50% of the company's Asian sales.

Exxon tacks on tackifiers

ExxonMobil Chemical is installing a new hydrogenated tackifier line at its site in Notre -Dame-de-Gravenchon, France, that will boost capacity there by 50%. The company says the expansion, set to be complete by first-quarter 2007, addresses fast-growing demand in the hot-melt adhesives market. The tackifiers are used in diapers, adult incontinence products, and packaging applications.

Reilly plans expansions

Reilly Industries plans to expand pyridine/picoline capacity at its Indianapolis plant by 20% in a project that will also enable new production technology. The company expects to complete the $6 million to $8 million project by third-quarter 2006. In addition, Reilly says a project now under way at its Nantong, China, pyridine/picoline facility will double annual capacity there to 22,000 metric tons by next year. In June, Indian competitor Jubilant Organosys said it would expand pyridine/picoline capacity by 30% to 28,000 metric tons by September.

Fortron hikes PPS capacity

Fortron Industries, a joint venture between Ticona and Kureha Chemical Industry Co., has picked its existing site in Wilmington, N.C., as the location for a new polyphenylene sulfide plant. The new unit will double capacity there to 15,000 metric tons per year when it is completed in first-half 2007 at a cost of $65 million. The announcement comes less than a month after Chevron Phillips Chemical said it would double PPS capacity at its Borger, Texas, unit to 20,000 metric tons. Fortron President Fred Daniell says annual global demand for the engineering polymer, 40,000 metric tons today, is growing at a 10%-plus annual clip.

Biogen, PDL in antibody pact

Biogen Idec and Protein Design Labs have formed a joint development, manufacturing, and marketing collaboration for three PDL antibody products currently in Phase II clinical trials. The agreement covers daclizumab for multiple sclerosis, and M200 (volociximab) and HuZAF (fontolizumab) for multiple indications. PDL will receive an up-front payment of $40 million from Biogen Idec and will sell $100 million of common stock to the firm. PDL could receive up to $660 million in development and commercialization milestone payments.

PPG acquires coatings maker

PPG Industries has acquired privately held Crown Coating Industries, a Singapore-based maker of radiation-cured wood coatings for flooring applications. The 14-year-old firm employs 40 people at facilities in Singapore and Shanghai. PPG says the acquisition provides a base in Asia from which it can expand its wood coatings business and supply Asian customers with radiation-cured coatings.

Qiagen on buying binge

Dutch biotechnology services provider Qiagen is continuing an acquisition spree. It will acquire key assets of LumiCyte, which has developed sample preparation products for mass spectrometry analysis. Qiagen will pay $3 million, plus up to $13 million in additional performance payments. It will also acquire the bioanalytical assets of SuNyx, which has developed methods for preparing peptide and protein samples for mass spectrometry. These buys follow the June acquisition of the protein crystallization firm Nextal Biotechnologies for $9.7 million.

Engelhard has fruit protector

Farmers in California and the Pacific Northwest are fighting hot weather with Surround brand crop protectant, a spray-applied treatment codeveloped by Engelhard and USDA. Surround covers fruits, nuts, and vegetables with a white kaolin-based film that helps keep them cool. Engelhard cites research showing that the coating can cut peak temperatures on fruit by 10 °F or more.

Synthetech mulls options

Synthetech, a U.S. maker of specialty amino acids and peptide fragments, says it is evaluating ways to return to profitability and ensure long-term viability. According to CEO M. (Sreeni) Sreenivasan, they include expanding into more complicated synthesis projects, making use of R&D resources in India, entering nonpharmaceutical markets, and developing proprietary products. Synthetech reported a loss of $1.1 million for the quarter ending June 30 on sales of $1.2 million.

Saudi venture advances

Sumitomo Chemical and Saudi Arabian Oil Co. (Saudi Aramco) are moving forward with their refining and petrochemical complex in Rabigh, Saudi Arabia. The project is expected to cost $8.5 billion, nearly double the estimate made when it was announced more than a year ago. According to a Sumitomo spokesman, the addition of a waterworks and an electric power plant, along with higher labor and material costs, have driven up the project's price tag. "Nevertheless," he says, "we expect the project to be far more profitable than originally estimated." The joint venture will have 2.4 million metric tons of annual capacity for petrochemicals including ethylene, propylene, polyethylene, polypropylene, ethylene glycol, propylene oxide, and 1-butene. Construction is set to begin in the first quarter of 2006.

Clinton group in API deal

The Clinton Foundation HIV/ AIDS Initiative has signed agreements under which China's Mchem Pharma Group will supply bulk intermediates and active pharmaceutical ingredients (APIs) for AIDS drugs. The ingredients will be formulated into finished drugs by Mchem and by Clinton partners such as the Indian firms Cipla, Hetero Drugs, and Ranbaxy Laboratories. Mchem says it will offer, for example, zidovudine, the API in AZT, for 20% less than the lowest international price. The firm's Xiamen, China, facilities still must win WHO and FDA approval.

Genencor trims pharma staff

Danisco, which acquired enzymes maker Genencor in April, has decided to sell Genencor's health care activities rather than spin them off into a company in which it is a shareholder. As a result, Danisco says it will cut 22 jobs in the health care business, leaving 31 employees. While on the block, the health business will continue to develop two compounds for hematologic malignancies.

BUSINESS ROUNDUP

◾ Degussa and BASF are collaborating on triethylene diamine, a catalyst used to produce urethane foams. BASF produces the compound in Antwerp, Belgium, in a plant that opened in April using a new process. Degussa will handle worldwide marketing and technical service.

◾ Solvay has finalized an agreement to sell its industrial plastic foils unit to Renolit for just about $400 million. The proposed deal does not include Solvay's rigid plastic foils business, which was sold to Ineos last month.

◾ Advancis Pharmaceutical, a developer of novel anti-infective products, is eliminating 33 jobs, or 38% of its workforce. CEO Edward M. Rudnic says the cuts will strengthen the firm's financial position and enhance its long-term potential.

◾ AstraZeneca's new CEO, effective Jan. 1, 2006, will be David R. Brennan, now executive vice president responsible for the firm's U.S. and Canadian business. He succeeds Sir Tom McKillop, who will retire after 30 years with the firm.

◾ Solidago AG of Bern, Switzerland, has tapped Chatham, N.J.-based Vinchem as the company's U.S. marketing representative for "follow-on," or generic, biopharmaceuticals.

◾ Huntsman is expanding capacity for ethylene carbonate at its Conroe, Texas, facility by 30% to 32 million lb per year by first-quarter 2006. The company says demand is rising as a result of the need for environmentally friendly solvents.

◾ BASF will increase its annual capacity for ethanolamines in Ludwigshafen, Germany, and Antwerp, Belgium, by 25% to 230,000 metric tons. The expansions are targeted to be complete by fall 2006.