Business Concentrates

Investigation ends at Ferro

Ferro says the second independent investigation into its accounting procedures has been completed. The inquiry, conducted by accounting firm Venable LLP and Navigant Consulting, a forensic accounting company, found evidence that Ferro's accounting personnel spread expenses and otherwise misapplied generally accepted accounting practices (GAAP) to achieve internal forecasts, but it did not find that this was done with the intent to affect reported earnings in a way that misleads the investing public. The investigators also found a lax tone with respect to GAAP compliance among certain former members of Ferro's finance organization, but that current senior management sets a positive tone with respect to accounting practices. In the first inquiry into inappropriate accounting at Ferro's polymer additives division, investigators concluded that almost all the irregular entries were made by a subordinate divisional employee who has since left the firm, and that the entries were made without the knowledge or involvement of senior management.

DSM invests in China, India

DSM is investing in vitamins and antibiotics in China and antibiotics in India. Cementing an arrangement first announced late last year, DSM will obtain a 49% interest in two joint ventures with North China Pharmaceutical Group—one involving vitamin C and vitamin B-12 and the other involving -lactam antibiotics. DSM will invest $164 million in the ventures, which will have combined sales of about $275 million annually. Separately, DSM will expand its antibiotics plant in Toansa, India, using its proprietary enzymatic technology. The project will take place next year, the firm says, and lead to a doubling of capacity for amoxicillin and the penicillin-related intermediate 6-APA.

Merck wins Vioxx case

Merck & Co. won a victory in its battle over the painkiller Vioxx last week when a New Jersey state court jury returned a verdict rejecting the claims of an Idaho man who suffered a heart attack after taking Vioxx. The case is the second involving the drug to go to court. In the first case, in Texas, a jury awarded the widow of a Vioxx patient $253 million in damages. Merck General Counsel Kenneth C. Frazier said last week that there will be other Vioxx trials, and we will vigorously defend them one by one over the coming years.

Altana seeks drug partner

Germany's Altana says it is seeking a strategic partner for its pharmaceutical business. The announcement follows the firm's decision, revealed earlier this year, to separate its chemical business into a separate division to be listed on the stock exchange. Altana CEO Nikolaus Schweickart says the partner search will complement a plan to spend up to $1.3 billion to buy and in-license products. He promises that splitting the company is not an option. Neither do I accept an auction to sell off the company to the highest bidder, Schweickart says.

Danisco sells drug business

Danisco has sold much of its health care business to Cambridge Antibody Technology for $14 million, making good on a promise to exit the business, which it obtained with the April acquisition of Genencor. The sale involves two compounds being developed for hematological malignancies. Cambridge Antibody says it has hired 10 former Genencor staffers in Palo Alto, Calif., giving it a U.S. operation for the first time.

Kraton expands elastomers …

Kraton Polymers is building a new polyisoprene latex plant in Paulnia, So Paulo, Brazil. The plant, which will have capacity of 1,500 metric tons per year, is set to be completed in the fourth quarter of 2006, doubling the firm's capacity for the product. The company says the expansion will address demand for polyisoprene in medical and consumer products.

… as does ExxonMobil

ExxonMobil Chemical is doubling capacity for its Exxpro specialty elastomer in Baytown, Texas. The expansion for the brominated isobutylene p-methylstyrene copolymer is set for completion in late 2006 and will support new technologies for vehicle tire inner liners, the company says. One technology employs nanocomposites to yield lighter weight tires with improved inflation pressure retention and durability. Another technology, dynamically vulcanized alloys, also improves air retention and permits thinner inner liners.

Chinese company to buy Qenos

China National Chemical Corp. is purchasing Qenos—the polyethylene joint venture between Orica and ExxonMobil Chemical. The terms of the deal for Qenos, Australia's only polyethylene maker, are not being disclosed, but it is expected to be completed early next year. Qenos employs about 850 people and operates two plants, one in Altona and another in Botany. Earlier this year, Basell purchased Qenos' polypropylene business.

Merck and BMS license drugs to a nonprofit

Merck and Bristol-Myers Squibb have separately licensed new antiretroviral compounds to the International Partnership for Microbicides, allowing the nonprofit to develop the compounds for resource-poor countries. The companies say the agreement marks the first time that drugmakers have licensed anti-HIV compounds as microbicides so early in development. A study just published in Nature reports that the compounds, called entry inhibitors, protected macaque monkeys from infection by a virus similar to HIV.

Wisconsin firm backs malaria R&D in Congo

Cambridge Major Laboratories, a Wisconsin-based provider of chemistry services to the pharmaceutical industry, plans to support research performed by K. M. Taba at the University of Kinshasa, in Congo. Taba is studying plant-based remedies that show high inhibition of the plasmodiums that keep the malaria parasite alive in the body. Cambridge Major CEO Michael W. Major says his firm will provide financing, equipment, and services. University of Wisconsin, Milwaukee, chemistry professor James Cook has pledged to help with structural elucidation studies.

Borealis makes catalyst moves

Borealis and Novolen Technology—a joint venture between ABB (80%) and Equistar (20%)—have signed a joint development agreement for metallocene-catalyst-based polypropylene. Under the deal, Borealis will also license Novolen's metallocene technology. Separately, Borealis is launching its Borstar PE 2G technology, which consists of a new catalyst system and process improvements to its conventional Borstar bimodal polyethylene process. The company says the technology permits the tailoring of polyethylene for applications such as flexible packaging.

Cytec regroups and expands

Cytec Industries has named Shane Fleming to head a new specialty chemical unit that combines its surface specialties and performance chemical businesses. Ben Van Assche, president of the surface specialties unit, has left the firm. Van Assche came on board earlier this year when Cytec bought UCB's surface specialties business for $1.8 billion. CEO David Lilley attributes the changes to the need to deal with weak economic conditions in Europe and North America, along with high raw material and energy costs. Separately, Cytec has completed a 50% increase in mining chemicals capacity at the Mount Pleasant, Tenn., site it bought from Avecia in 2003.

Dow closes a plant, sells a business

Dow Chemical will close itspolystyrene plant in Barry, South Wales, by the end of 2005. The site employs 24 people and has capacity to make 75,000 metric tons of polystyrene annually. Dow says it will supply customers from one of its six other polystyrene plants in Europe. Separately, Dow's Hampshire Chemical unit has sold its businesses in glycine and Daxad brand naphthalene sulfonate formaldehyde condensate dispersant to Geo Specialty Chemicals.

Two companies win biodefense contracts

The U.S. government has awarded two contracts related to enzymes as biodefense agents. Genencor International has secured a $2 million contract from the Department of Defense to develop an enzyme-based decontamination product targeting chemical and biological warfare agents. The firm will work with the U.S. Army Edgewood Chemical & Biological Center to develop enzymes capable of decontaminating agents such as mustard gas, anthrax, and botulism. Meanwhile, Lybradyn has been awarded a Phase I SBIR grant from NIH to develop new organophosphorus hydrolases for the biocatalytic degradation of warfare agents and pesticides.

Ineos buys cumene plant

Chevron Phillips Chemical has sold its Port Arthur, Texas, cumene plant to Ineos Americas, where it will become part of Ineos' phenol division. Cumene is used as a feedstock for phenol and acetone. The unit was idled in 2003 because of poor market conditions. This is the first U.S. cumene plant for Ineos, which says it is the world's largest manufacturer of phenol.

DuPont, Kronos settle dispute

DuPont and the titanium dioxide maker Kronos Worldwide have settled patent litigation surrounding the production of certain TiO₂ pigments. The two have agreed to cross-license each other's patents covering the technology, which is used to produce pigments such as DuPont R-104 and Kronos 2500. The agreement also covers the use of these pigments in polymer applications.<

BUSINESS ROUNDUP

BASF has sold its global Phorate insecticide line to Amvac Chemical, a subsidiary of American Vanguard. The insecticide, which had 2004 sales of about $17 million, is used on crops to protect against chewing and piercing-sucking insects.

Honeywell has completed the sale of its U.S. nylon carpet fibers business to Shaw Industries. The sale includes manufacturing operations in Clemson and Columbia, S.C., and a 50% stake in Evergreen Nylon Recycling in Augusta, Ga.

Microbia has struck a second research collaboration with Ranbaxy Laboratories to lower the cost of a drug biomanufacturing process. Microbia says an earlier pact led to higher yields in a Ranbaxy process for making a statin drug.

Hewlett-Packard will eliminate the brominated flame-retardant tetrabromobisphenol A from the external cases of all HP brand products by the end of next year. The company says it eliminated 95% of all brominated flame retardants and polyvinyl chloride from external cases a decade ago.

Singapore's Institute of Chemical & Engineering Sciences has opened a chemical synthesis laboratory at the country's Biopolis biotechnology complex. The lab is intended to support local chemical and pharmaceutical companies and train future Ph.D. researchers.

Sd-Chemie has acquired a majority interest in a joint venture for polymerization catalysts in China. The venture, which will be called Shanghai Sd-Chemie Jinhai Catalyst Co., operates an R&D and production facility near Shanghai.

Epichem, a U.K. provider of chemicals to the semiconductor industry, has received an investment from the venture-capital arm of Intel. Epichem says the funds will allow it to expand R&D and manufacturing for a wide range of precursors used in semiconductor production.