ERROR 1
ERROR 1
ERROR 2
ERROR 2
ERROR 2
ERROR 2
ERROR 2
Password and Confirm password must match.
If you have an ACS member number, please enter it here so we can link this account to your membership. (optional)
ERROR 2
ACS values your privacy. By submitting your information, you are gaining access to C&EN and subscribing to our weekly newsletter. We use the information you provide to make your reading experience better, and we will never sell your data to third party members.
Swiss specialty chemicals producer Clariant is about to complete its exit from custom manufacturing. It is selling, for an undisclosed sum, its custom manufacturing business to International Chemical Investors Group (ICIG), formed in 2004 by a team led by Achim Riemann (C&EN, April 9, page 28).
The unit supplies intermediates and active ingredients for the agrochemicals, pharmaceuticals, and polymers industries from sites in Germany and the U.S. Last year, it had sales of about $180 million and about 490 employees.
However, as Clariant pointed out in its 2006 annual report, sales were down significantly as "the decline in custom manufacturing accelerated" over the course of the year.
The difficult conditions for fine and custom chemicals, in fact, had led the company to sell its pharmaceutical fine chemicals business in June 2006 to the private equity firm TowerBrook Capital Partners. It put the custom manufacturing unit up for sale in September. According to Clariant, the sale to ICIG is the latest step in its strategy to focus on colors, surface chemistry, and performance chemicals.
Clariant expects to record a loss of just under $60 million on the deal, which is expected to close by midyear. The deal transfers all assets and personnel to the buyer.
It's all a long way from the heady days of the late 1990s, when custom manufacturing was everybody's idea of a profit spinner. Clariant, for example, entered the fine chemicals and custom manufacturing business in 2000 with the $1.8 billion acquisition of the British firm BTP.
Clariant CEO Jan Secher predicts that "as an independent entity supported by a committed investor, the custom manufacturing business has an excellent opportunity to improve its performance in the future."
"The Clariant agrochemicals businesses are an important building block complementing our present portfolio of fine chemicals custom manufacturing assets," says Riemann, managing director of ICIG. After the acquisition, he adds, the company will become an important player in the nonregulated custom manufacturing sector with annual sales of about $270 million.
ICIG plans to combine the Clariant operations with its other fine chemicals manufacturing activities, particularly WeylChem, the former Rütgers Chemicals business that ICIG acquired in 2005 from the German energy company RAG.
Join the conversation
Contact the reporter
Submit a Letter to the Editor for publication
Engage with us on Twitter