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Kemfine Buys Avecia Contract Production Arm

Avecia continues to shrink with the sale of its nonpharmaceutical manufacturing business

by Rick Mullin
September 26, 2005 | A version of this story appeared in Volume 83, Issue 39

KemFine, the Finnish fine chemicals firm created in a management buy-out from a Kemira unit last year, is doubling in size with the acquisition of Avecia Fine Chemicals for an undisclosed sum. Avecia Fine Chemicals includes Avecia’s Grangemouth, Scotland-based contract manufacturing operations in agricultural chemicals, specialties, and pharmaceutical intermediates that don’t require production under current Good Manufacturing Practices (cGMP).

Officials with Avecia and KemFine say the firms are a good match. “The two businesses are an excellent fit, and our combined technology strengths and asset capabilities will provide significant opportunities for growth from our dual manufacturing bases in Finland and Scotland,” KemFine CEO Ulf Björkqvist says.

Avecia Fine Chemicals logged sales of $69 million last year, compared with about $67 million for KemFine. KemFine, launched last October with the backing of British private equity firm 3i, has been making agricultural and specialty chemicals as well as pharmaceutical intermediates and some active pharmaceutical ingredients at a plant in Espoo, Finland. The company, which now has about 500 employees, does about 75% of its business on a contract basis.

The sale leaves Avecia with three operating divisions: pharmaceutical intermediates, its cGMP contract manufacturing business in Huddersfield, England; biologics, based in Billingham, England, with a DNA drug unit in Millford, Mass.; and electronic materials, which will continue to be manufactured at facilities in Grangemouth that will be leased from KemFine.

Avecia’s private equity owners, Cinven and Investcorp, have said they intend to liquidate the company as opportunities arise (C&EN, Feb. 14, page 11). Fine chemicals industry consultant Peter Pollak says he understands that Avecia is currently seeking a buyer for its pharmaceutical intermediates business. A spokesman for Avecia, however, says the company is currently committed to its three remaining businesses.

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