Business Concentrates

Jobs to go at SABIC German site

SABIC is cutting 200 jobs from its polyolefins plant in Gelsenkirchen, Germany. Despite measures taken to boost productivity and production, results from the site have remained unsatisfactory, company officials say. The restructuring program will cause some 150 of 540 jobs to be cut in the next two years, the company says. An additional 50 jobs will disappear in 2008, when an old plant will be replaced by a new, larger one. At the same time, SABIC says it will spend nearly $40 million on existing plants and logistics infrastructure there. The restructuring is the outcome of a study that SABIC launched last fall. The Gelsenkirchen site was taken over from the oil company VEBA eight years ago by DSM. Since then, old facilities have been closed down and new polypropylene and polyethylene plants have been built, more than tripling capacity to 850,000 metric tons per year. "Since 1998, more than $500 million has been invested in Gelsenkirchen. To ensure a sound business base, productivity improvements have to be achieved in all areas," according to Jan van den Berg, SABIC's managing director in Gelsenkirchen. "Drastic measures have become unavoidable."

EMS Group to spin off fine chemicals

Swiss specialty chemical company EMS Group plans to spin off its fine chemicals operations this year. EMS-Dottikon, which specializes in exclusive synthesis of active pharmaceutical ingredients and intermediates, will be listed on the Swiss stock exchange, allowing EMS-Chemie to focus on its performance polymers business. Current EMS shareholders will be given rights to shares in the new company, to be called Dottikon ES Holding. EMS Group sales in 2004 were up by 3.8% over 2003, to $1.02 billion; operating profits rose 10.4% to $175 million. Fine chemicals accounted for 21% of sales and 25% of operating profits.

Campbell named ACC chairman

Arch Chemicals CEO Michael E. Campbell has been named chairman of the American Chemistry Council's board of directors for a one-year term. He has been on ACC's board since 2000 and has spearheaded its review of Responsible Care. He replaces Rohm and Haas CEO Raj Gupta in the chairmanship. Next in line for the chair of ACC's board is Jeffrey M. Lipton, CEO of Nova Chemicals and chairman of the ACC executive committee.

Amgen halts Phase II study

Amgen is halting Phase II clinical trials of a recombinant protein being developed for the treatment of Parkinson's disease. Called GDNF, for glial-cell-lined-derived neurotrophic factor, the drug is the recombinant version of the naturally occurring GDNF in the central nervous system, a growth promoter of specific nervous tissue. The company says it is "deeply disappointed" but sees potential safety risks and the absence of medical benefit in its analysis of the trials, which were terminated in the fall of 2004. The Parkinson's Disease Foundation, a patient advocacy group, calls Amgen's decision "a mistake" and has "pleaded" with the firm to reinstate the trial with subjects who are willing to continue and be carefully monitored.

Nexen is selling chemical unit

Canadian energy exploration and chemical firm Nexen says it is planning to sell its chemical business following the purchase of North Sea oil assets from EnCana. Nexen's goal is to raise $1.2 billion through the sale of the chemical business and some conventional oil assets in Canada. The company says the timing is right to liquidate the chemical business and that its options include selling the business to financial or strategic buyers. The business, which supplies sodium chlorate to the paper industry, generated $310 million in sales in 2004.

Sigma-Aldrich buys Degussa's Proligo unit

Sigma-Aldrich has acquired Degussa's Proligo subsidiary, a provider of nucleic acids and oligonucleotide synthesis with sales last year of $38.4 million. Proligo has about 300 employees and sites in the U.S., Germany, France, Singapore, Japan, and Australia. It ranks sixth in the oligonucleotides market and cannot achieve a leading position on its own, Degussa says. Sigma-Aldrich, however, says it wants to substantially expand its activities in the nucleic acid market. Degussa will retain its business in the bulk manufacture of pharmaceutical oligonucleotides.

Brazil signs with Venezuela on chemicals ...

A meeting between Venezuela's President Hugo Chavez and Brazilian leader Luís Inácio Lula da Silva may yield results for the chemical sectors of both countries. Braskem, Brazil's largest private chemical maker, signed a deal with Venezuelan state oil company PDVSA to explore chemical development in Venezuela. Braskem is keen on using Venezuela's abundant chemical feedstocks to produce plastics.

... eyes acrylic plant with Dow

Dow Chemical, Petrobras, and Elekeiroz will conduct a feasibility study on what would be Brazil's first acrylic acid plant. The plant would cost more than $360 million and be situated next to a Petrobras refinery in Minas Gerais, where the state oil company is installing a propylene splitter. Output would be used to make acrylic acid derivatives, such as superabsorbent polymers. In 2003, BASF and Petrobras shelved plans for an acrylic acid joint venture.

Arkema forms nanotech pact

Arkema has formed a nanomaterials development agreement with Texas-based Zyvex. Arkema says it has capacity to make 5,000 kg of multiwall carbon nanotubes annually at its Lacq, France, site. Zyvex, which calls itself the first molecular nanotechnology company, formulates nanomaterials for the sporting goods, aerospace, and automotive industries. Zyvex says Arkema is the first company to meet its highest quality requirements.

Vertex licenses a cancer drug

Vertex Pharmaceuticals has licensed its investigational drug VX-944 to Avalon Pharmaceuticals for oncology applications. VX-944 is a small-molecule IMPDH inhibitor that Vertex says holds strong potential in the treatment of hematologic cancers. Avalon will pay up to $73 million in up-front license fees and make milestone payments to Vertex, and Vertex will get royalties on any product sales.

Isis strikes deal with Sarissa

Isis Pharmaceuticals has licensed a cancer drug candidate to Sarissa, a biotech spin-off from the University of Western Ontario. Sarissa is responsible for both preclinical and clinical development of the drug, an antisense inhibitor. Under the agreement, Sarissa will pay Isis a $1 million up-front fee for an exclusive, worldwide license. The fee will convert to stock when Sarissa completes its venture-capital funding. The drug candidate is an inhibitor of thymidylate synthase, which appears to play a role in chemotherapy resistance of tumors.

Production recovers

After slipping in November and December, U.S. chemical production increased in January, according to seasonally adjusted data from the Federal Reserve Board. The government reports that the chemical production index for January was 112.7 (1997 = 100), up 1.0% from the previous month and 5.5% ahead of January 2004. The boost in output raised the government's estimate of chemical capacity utilization to 76.8% in January from 76.1% in December. In January of last year, seasonally adjusted capacity use was 73.3%.

Dow mulls more ethanolamines

Dow Chemical is considering expansion of its ethanolamines capacity in Hahnville, La. The company is also considering adding ethanolamines capacity in Asia to augment the plant it already has in Malaysia. Using Six Sigma productivity and quality methodology, Dow says it has already been able to expand capacity on the Gulf Coast by 45,000 metric tons, bringing its total capacity to 317,000 metric tons per year. Earlier this month, Dow disclosed that it is building an alkanolamines plant in Plaquemine, La.

Two firms win NIH business

The NIH Roadmap initiative has generated business for two makers of laboratory chemical handling equipment. TekCel's TubeStore System has been chosen by Discovery Partners International to manage some of the samples in the San Francisco-based small-molecule repository that DPI is building for NIH. Separately, NIH's Chemical Genomics Center in Bethesda, Md., will purchase low-volume liquid-handling workstations from Aurora Discovery. The stations will be used in chemical probe research conducted as part of the NIH Roadmap initiative.

Another boost to bulletproof fiber at DSM

DSM is planning a third expansion of its Greenville, N.C., ultra-high-density polyethylene (UHDPE) fiber plant, which opened just last year. Because of heavy demand for the Dyneema brand fiber in military and security applications, the firm will spend $50 million on a 50% increase in capacity in Greenville and a 10% increase in Heerlen, the Netherlands. The previously announced second expansion in Greenville will open in early 2006, while the latest will be completed later that year.

Fuller takes Chile charge, forms venture

In its year-end earnings report, H.B. Fuller said it would take a $2 million charge to fourth-quarter 2004 earnings to account for previously disclosed accounting problems in Chile. The company found that "certain members" of its Chilean organization knowingly recorded incorrect entries, misappropriated company assets, and overstated net income by $3 million going back to 1999. Separately, Fuller and Sekisui have agreed to merge their Japanese adhesive businesses into a $150 million-per-year joint venture that will be owned 60% by Sekisui and 40% by Fuller. At the same time, Fuller will sell a 20% interest in its China operations to Sekisui.

BUSINESS ROUNDUP

Degussa has received the nod from its management board to double capacity of its carbon black plant in Paulinia, Brazil, to 100,000 metric tons per year, a project first announced last September. The original plant was built just two years ago.

Konarka Technologies is collaborating with the Swiss Federal Institute of Technology, Lausanne, to develop photovoltaic fabric. Konarka, which calls itself the leader in polymer photovoltaics, has already licensed dye-sensitized solar-cell technology from the institute's Michael Grätzel.

ExxonMobil Chemical plans to add a production line at its Pensacola, Fla., site to satisfy an increasing demand for its Santoprene thermoplastic elastomers.

PetroChina has started construction of an oil refinery and accompanying 1.2 million-metric-ton-per-year ethylene facility at its Dushanzi site in Xinjiang, in western China. The conglomerate expects the work to be completed in 2008.

Fluorous Technologies and Berry & Associates have signed a license agreement under which Berry will market fluorous-chemistry-aided oligonucleotide synthesis products. Fluorous says its technology facilitates oligonucleotide separation and purification.