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Business Concentrates

August 15, 2005 | A version of this story appeared in Volume 83, Issue 33

Quarterly profits rise in Japan

Buoyed by strong demand for petrochemical products, Japanese companies mostly reported improved profits in the first quarter of the fiscal year that ends March 31, 2006. Shin-Etsu Chemical boosted net income by nearly 25% compared with a year ago to $241 million on strong sales of 12-inch silicon wafers and higher prices for polyvinyl chloride resin. Mitsubishi Chemical increased its net income by 16% as higher margins in its health care business made up for a 33% drop in operating income in petrochemicals following plant outages. Sumitomo Chemical increased its net by almost 30%, thanks to a 10-fold operating income increase in its petrochemicals business, which accounts for a third of company sales. At JSR, operating income for electronic materials decreased 9%, but better margins in synthetic rubber enabled the firm to boost its net 5.7%. Net income at Mitsui Chemicals jumped 56% to $149 million owing to strong petrochemical margins. At fiber and chemical producer Toray, net profit declined 27% to $57 million as a result of declining margins for electronic materials. At rival fiber and chemical producer Teijin, net profit jumped 49% to $80 million owing to strong demand for p-aramid fibers used in bulletproofing and for plastic materials used in liquid-crystal displays.

Bayer reports strong quarter

Bayer reported a near tripling in net income to some $500 million in the second quarter on a 20% increase in sales to about $8.7 billion. The company, which spun off its industrial chemicals business as Lanxess at the start of the year, attributes its good performance mainly to its materials science business, where strong demand for polycarbonate and polyurethane boosted sales by 31%. Bayer's health care business benefited from good growth in diabetes care, diagnostics, and biologics. Sales at Bayer CropScience fell by 2.3%, however, due to drought-related demand declines in insecticides and herbicides.

Elementis CEO departs

Elementis CEO Geoff Gaywood has resigned from his position and stepped down from the board of directors, the company says. Gaywood's resignation comes after the resignation in June of Keith Hopkins as chairman of the beleaguered specialty chemical company, following concerted shareholder pressure. Edward Bramson, named nonexecutive chairman to succeed Hopkins, will become executive chairman. He will continue a corporate strategic review, the results of which are expected to be announced during the second half of this year.

Lurgi moves on biodiesel

Engineering company Lurgi will build four biodiesel plants in Australia, the U.S., and Spain. The total value of the contract amounts to about $85 million. Two plants will be built in Australia for Natural Fuel Darwin Private Ltd.; one will be built in the U.S. for Cargill; and the fourth, in Spain, for Técnicas Reunidas. Lurgi points to studies indicating that over the next several years, U.S. demand for biofuels--both biodiesel and bioethanol--will rise from 9 million metric tons per year today to almost 15 million metric tons. In Europe, the European Union plans to lift biofuels' share of total fuel consumption from about 2% today to 5.75% by 2010, or from less than 5 million metric tons to almost 14 million metric tons.

Merck opens tech center ...

EMD's center is equipped with developmental to 100-L chromatography columns.
EMD's center is equipped with developmental to 100-L chromatography columns.

EMD Chemicals, the U.S. affiliate of Germany's Merck, has opened a chromatography technical center in Gibbstown, N.J. The center will provide technical support and train personnel from biotherapeutic and other companies on column packing. EMD supplies polymeric chromatography media used to separate and purify biomolecules. The new center complements an existing center in Darmstadt, Germany.

... and a U.S. generics unit

Merck has also established a generic pharmaceutical business, Genpharm, in the New York City area to serve U.S. customers. Robert J. Mauro, former president of Able Laboratories, is president of the new unit. Merck says Genpharm will help Merck increase its presence in the world's number one pharmaceutical market and solidify its position as the world's third-largest generics firm.

OM shakes up its board

Metal chemical maker OM Group has adopted new standards of independence for its board of directors that have sent two directors packing. John E. Mooney and Markku Toivanen, the company says, have "voluntarily resigned" from the board, effective immediately. Mooney is the brother of James P. Mooney, the OMG CEO who stepped down in January, and the son of the founder of Mooney Chemicals. Toivanen was an executive with Outokumpu Oyj, which formed OMG with Mooney Chemicals in 1991. Two other directors, Chairman Frank E. Butler--who ran the company until Joseph M. Scaminace became CEO in June--and Lee R. Brodeur, are retiring. Scaminace will become chairman of the board. Katharine L. Plourde, a director of OMG since 2002, will become lead director.

Safety board cites Honeywell

The U.S. Chemical Safety & Hazard Investigation Board (CSB) released a report last week on three incidents--one fatal--that occurred in 2003 at Honeywell's Baton Rouge, La., chemical plant. At a news conference in Baton Rouge, CSB Chairman Carolyn W. Merritt said management system deficiencies at the plant were common to all three incidents. Merritt said the incidents "should not have happened and would not have happened had better procedures, hazard analyses, and design of critical equipment been put in place at the plant." Honeywell says it will use the investigation's findings as a learning opportunity.

Bioimplants get funding boost


Inion has received $2.3 million from the Finnish technology grant authority Tekes to develop its Optimaplus biodegradable medical implant materials. The grant will fund half of a three-year project in the next-generation materials, with the other half coming from the proceeds of Inion's initial public offering. Optimaplus materials, based on the solvent N-methyl-pyrrolidone, are designed to reduce the healing time of common bone injuries such as fractures. Inion already markets implantable devices such as plates, screws, and pins based on biodegradable polymers.

PPG to convert chlorine cells

PPG Industries will spend more than $90 million over three years at its Lake Charles, La., plant to end mercury-cell-based production of chlorine and caustic soda and switch to more modern membrane cell technology. About 275,000 tons of annual chlorine production capacity will be switched in the process. PPG also operates six diaphragm cells at the site with total capacity of 1.1 million tons. The mercury-based method is the oldest chlorine production technology, used to make about 10% of U.S. chlorine. The method has come under scrutiny as states and EPA try to stem mercury emissions from a variety of sources (C&EN, March 15, 2004, page 31). PPG will continue to use the mercury process at a plant in Natrium, W.Va.

Rhodia sells line to Henkel

Rhodia has agreed to sell its silicone sealant cartridge business in Europe to Henkel. The business had sales of roughly $60 million last year in the European construction and do-it-yourself markets. It operates plants in Leverkusen, Germany, and Leicester, England, that employ 158 people. Rhodia says it will focus on producing silicone intermediates and bulk silicone sealants.

New York sets biotech campus

A real estate developer will build a $700 million biotechnology campus on Manhattan's east side that is expected to attract health care and pharmaceutical companies. Alexandria Real Estate Equities, which operates similar campuses in other cities, says the East River Science Park will open in 2008 with an initial 542,000 sq ft of laboratory and office space. More than 30 new biotechnology companies are launched in New York City each year, but city officials acknowledge that most don't stay because of high rent and lack of lab space.

Tocris sells radiochem unit

Tocris Bioscience has sold its radiochemistry business to American Radiolabeled Chemicals (ARC) of St. Louis for an undisclosed sum. The sale includes off-the-shelf radioactively labeled research chemicals as well as all custom radiosynthesis services. England-based Tocris says the sale will allow it to focus on its life sciences business. For ARC, the purchase "supports our plan to open a European headquarters in the near future," President Surendra Gupta says.

Employment jumps in July

U.S. chemical employment scored a gain in July, according to seasonally adjusted data from the Labor Department, but the number of production workers fell. Total chemical employment increased in July by 1,000 from June, to 879,100. Compared with July 2004, the number of chemical employees was down 8,600. While total employment was rising, the number of hourly production workers fell by 500 from June to 513,300. July production employment also was below that of the same month in 2004--by 8,000.


Wacker-Chemie is now 100% owned by the Wacker family. A holding company controlled by the family bought out the 44.4% stake held by Hoechst, a subsidiary of Sanofi-Aventis, for an undisclosed sum, marking the end of an 84-year-old partnership between Hoechst and the Wacker family.

Organon and the British biotech company BioFocus have signed an agreement under which BioFocus' capabilities in G-protein-coupled receptor drug discovery will be used to generate leads for selected Organon targets. The firms earlier worked together on a screening collaboration.

DuPont and LRM Industries will explore the use of LRM's TPF technology for molding large parts out of long-fiber-reinforced plastics. LRM is a joint venture of Nova Chemicals and Envirokare Composites.

◾ Two former Bayer executives were indicted last week by a federal grand jury for fixing rubber chemical prices. Jurgen Ick and Gunter Monn were charged with participating in an international price-fixing conspiracy between 1995 to 2001.

◾ Dow Chemical's Dowpharma unit has added an OligoPilot 400 synthesizer to its manufacturing offering in nucleic acid medicines. The firm says the synthesizer will aid companies that need quantities in the 100-g range.

Süd-Chemie says it will further streamline its portfolio by disposing of businesses in which it does not hold a leading global position. The German firm is fending off a takeover offer from a U.S. investment group (C&EN, Aug. 8, page 18).

Monsanto has completed the sale of its Enviro-Chem Systems subsidiary to Enviro-Chem management and an outside investor. The new company, MECS, provides engineering services for plants that use sulfuric acid and also sells pollution abatement equipment.



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