August 2004 Clariant Divests Lancaster Synthesis Clariant sold its Lancaster Synthesis catalogue and small-scale bulk manufacturing operations to Johnson Matthey for $26 million (Euro 21 million, SF32 million). The sale is part of Clariant's strategy to divest non-core activities and improve group profitability. The company already sold its cellulose ethers business to Shin-Etsu Chemical for $279 million (Euro 225 million).   Famous Quotes of the Month - Even on the springboard to success, you have to bounce a little. (Zig Ziglar) - When you fall into a river, you're no longer a fisherman. You're a swimmer. (Gene Hill) - Choose always the way that seems the best, however rough it may be; custom will soon render it easy and agreeable. (Pythagoras) - Don't think of it as failure. Think of it as time released success. (Robert Orben) - Man's mind stretched to a new idea never goes back to its original dimensions. (Oliver Wendell Holmes, Jr.) Why are there tiny holes in the ceiling of my car? While little kids might think the holes are there "to connect the dots", this is not the case. The headliners in some automobiles have small perforations in them to improve their sound-absorbing qualities. The perforated surface of the headliner is usually made of vinyl or hardboard material. It is applied over a layer of foam. The holes serve to admit sound from inside the vehicle and allow it to be damped by the foam layer. This is due to the absorption qualities of the foam. This promotes a quieter environment inside the vehicle for passengers. Car companies also suggest that some customers find the perforations pleasing to the eye. Further Job Cuts Announced by Akzo Nobel As part of a reorganization of its car refinishes business, Akzo Nobel will cut approximately 600 jobs, or 10 percent of that unit's workforce over the next two years. The restructuring is needed to improve profitability and realign the business with changing market conditions, according to the company, which has been experiencing reduced margins and lower sales. Positions will be affected in all regions of the world, but Western Europe and North America will feel the greatest impact. Lanxess to be Spun Off to Shareholders Bayer's independent chemicals business Lanxess will be spun off to shareholders and listed separately on the stock exchange beginning in January of 2005. The company chose not to launch Lanxess through an initial public offering (IPO) because market conditions are not favorable. An extraordinary stockholders' meeting will be held in mid-November to allow stockholders to approve the move. Lanxess has been operating independently of Bayer since July 1. Analysts estimate the business to have a market value of at least $1.24 billion (Euro 1 billion). More Baycol Cases Settled by Bayer Bayer reported that it has settled out of court 2771 cases worth $1.059 billion (Euro 855 million) regarding its recalled anti-cholesterol drug Baycol. An additional 8048 cases remain pending. Baycol was recalled in August 2001 after being linked to 100 deaths resulting from the severe muscle weakness condition called rhabdomyolysis. Outside of the U.S., Baycol was marketed under the name Lipobay. REACH Program Could Drastically Impact Rhodia Product Portfolio If the European Union's (EU) proposed registration, evaluation and authorization of chemicals (REACH) system is adopted as it stands today, Rhodia may be forced to stop production of about 1000 products, according to chief executive Jean-Pierre Clamadieu. All of Rhodia's 7000 products would need to be evaluated, and for many, the required testing would be cost prohibitive. Roche Expands Biopharmaceutical Manufacturing Capabilities Roche plans to build a new biotech center at its Basel, Switzerland site and add a biotech unit at its Penzberg, Germany location in response to the need for more capacity for its existing and pipeline biotech drugs. The investment will total approximately $640 million (SFr 800 million). Work in Basel is expected to begin in August of 2004. The new biotech center will replace Roche's existing production facility and will be a manufacturing site for Avastin (Bevacizumab). The new 5-story addition at the Penzberg site will be for production of Herceptin (Trastuzumab). Construction is also slated to begin in August. South Korea Chemical Producers Deal with Strikes More than 1800 refining and petrochemical workers went on strike in Yeochun, South Korea. LG-Caltex Oil Corp., BASF Korea, Sam Nam, Kumho P&B and Samho Oil all had workers walk off the job. Employees are demanding higher pay and better benefits. LG-Caltex was forced to temporarily shutdown, but resumed partial operations using non-union staff and employees from other locations. Most workers, except those from LG-Caltex, returned to their jobs within two weeks. The LG-Caltex workers continued their strike action despite receiving a government order requiring them to return to work. ExxonMobil Gets New President Michael Dolan will succeed the retiring Daniel Sanders as president of ExxonMobil, effective September 1st. Sanders served the company for 43 years, beginning as a mechanical engineer. Dolan, who is currently deputy to the president of ExxonMobil Refining & Supply Company, began working in a research lab for Mobil in 1980. He will be replaced with Stephen Pryor, who is currently executive vice president at ExxonMobil Chemical. PKN Orlen Appoints New Chairman Vice chairman Jacek Walczykowski has been appointed to replace the retiring Zbigniew Wrobel as Chairman of Polish oil refining and petrochemicals group PKN Orlen. Wrobel is leaving the company "due to the recent media speculation and political controversy surrounding PKN Orlen and its management board". Orlen is currently under investigation by a parliamentary commission for alleged irregularities in the dismissal of Wrobel's predecessor Andrzej Modrzejewski. Texas Petrochemical Reorganizes Top Leadership Texas Petrochemical (TPC) terminated president and chief executive Carl Stutts, chief financial officer Joseph Grady and senior vice president and legal counsel Stephen Wright. The company supplied no reasons for the terminations. Charles Shaver has been elected as president and chief executive. Frederick Pevow, interim senior vice president, is succeeding Grady as chief financial officer (CFO). Borden Chemical to be Acquired by Apollo Management Apollo Management agreed to purchase Borden Chemical, a manufacturer of high performance resins, adhesives and specialty chemicals, for $1.2 billion (Euro 970 million). The deal is subject to regulatory approvals and is expected to close in the third quarter of 2004. Borden expects to retain its current management team and continue with the company's current strategy. Canadian Paper Chemicals Business Acquired by Ciba Ciba acquired Canadian pulp and paper chemicals supplier LPM Technologies for an undisclosed amount. The company has annual sales of approximately $12.2 million (Euro 9.9 million) and offers coagulants, polyacrylamides, Polyethylene oxide (PEO) and stabilized phenolic resins, dry and wet strength resins, felt and wire cleaners and conditioners, defoamers and scale inhibitors. The purchase enables Ciba to establish a greater presence in the Canadian market and further build its paper chemicals business, which became a significant part of the company's operations with its recent acquisition of Raisio Chemicals. Clariant Disposes of Electronic Materials Business Following the sale of Lancaster Synthesis to Johnson Matthey, Clariant announced the divestiture of its AZ Electronic Materials business to the equity firm The Carlyle Group for $423 million (Euro 340 million, SF518 million). With the sale, Clariant will be able to focus its life sciences and electronic materials division more on custom synthesis for the life sciences industries. The company intends to sell two other yet to be identified businesses and close some manufacturing facilities as well. Elementis Purchase of Sasol Servo Finalized Elementis completed its $58.3 million (Euro 48.5 million) purchase of Sasol Servo, the specialty chemicals business of Sasol. With the purchase, Elementis gains Sasol Servo's coating additives, chemicals and specialty surfactants (including oilfield chemicals), and paper and pulp chemicals activities. Investor Group to Acquire PolyOne Elastomers and Performance Additives Business An Investor group led by ACI Capital and Lion Chemical Capital agreed to purchase the elastomers and performance additives business of PolyOne for $120 million (Euro 99 million). The deal is expected to be finalized in the third quarter of 2004. PolyOne sold the business, which services the transportation, electrical, industrial and printing industries, to improve profitability. The business has annual sales of approximately $350 million. PolyOne is also divesting its engineered films and specialty resins businesses for the same reason. Kemira Unloads Fine Chemicals Kemira agreed to sell its fine chemicals business for approximately $85 million (Euro 70 million) to UK venture capital group 3i. This sale, and the sale of its engineering activities to PIC Engineering, will enable Kemira to focus on its core activities, including pulp and paper chemicals, water treatment chemicals, industrial chemicals, and paints and coatings. The fine chemicals business provides custom synthesis services for the agriculture and pharmaceutical industries. Rockwood Buys Johnson Matthey's Pigments and Dispersions Business Rockwood Specialties agreed to purchase the pigments and dispersions business of Johnson Matthey for $50.6 million (GBP 27.0 million, Euro 40.6 million). Rockwood is a division of the U.S. private investment firm Kohlberg Kravis Roberts (KKR) and recently acquired Dynamit Nobel from MG Technologies for $2.7 billion. The sale of this business, which is part of its colors and coatings division, will allow Johnson Matthey to focus on its catalysts, precious metals and pharmaceutical materials businesses. King Pharmaceuticals to be Acquired by Mylan Laboratories King Pharmaceuticals will be acquired by Mylan Laboratories for $4 billion (Euro 3.3 billion). With the purchase Mylan will become the largest diversified specialty pharmaceutical company in the U.S. King, which has been under investigation by the Securities and Exchange Commission (SEC) regarding pricing practices for government programs such as Medicaid, is a vertically integrated branded pharmaceutical company. Roche Sells OTC Business to Bayer Roche has agreed to sell its over-the-counter (OTC) drugs business to Bayer for $2.96 billion (Euro 2.38 billion). With the acquisition, Bayer will become one of the top three OTC drug businesses in the world. The deal is subject to regulatory approval and is expected to close by the end of 2004. Bayer's new consumer healthcare business will have annual sales of approximately $2.98 billion (Euro 2.4 billion). The sale of the OTC drug business will allow Roche to concentrate on prescription medicines and diagnostic products. Sandoz to Acquire Sabex Holdings Sandoz, a subsidiary of Novartis, has agreed to acquire Canadian injectable generics manufacturer Sabex Holdings for $565 million in cash. The purchase will provide Sandoz with its first Canadian generic production facility. Sabex had revenues totaling $90 million in 2003. Sanofi Receives U.S. FTC Approval for Aventis Takeover Sanofi-Synthelabo reported that the U.S. Federal Trade Commission (FTC) approved its planned $64 billion (Euro 53.3 billion) takeover of Aventis as long as some divestitures are completed. The FTC consent agreement and implementing order is subject to public comment for 30 days. The European Commission gave conditional clearance for the deal in April. Sanofi-Synthelabo will sell operations relating to the anti-coagulants Fraxiparine and Arixtra, the cytotoxic colorectal cancer treatment Campto, which it previously licensed to Aventis, and its Delagrange vitamin B12 business in France. It must also divest Aventis' contractual rights to the insomnia drug Estorra. Solutia Europe Puts Pharma Business Up for Sale Investment banker Rothschild has been hired by Solutia to find potential buyers for its European pharmaceutical services business, which accounts for about 2% of the company's sales. Solutia filed for bankruptcy in December of 2003 and has since received two extensions for filing a plan for emerging from bankruptcy. U.S. FDA Approves Boehringer Ingelheim Biopharma Facility After a lengthy inspection, the U.S. FDA approved Boehringer Ingelheim's new biopharmaceutical active ingredients plant in Biberach, Germany where it produces the rheumatoid arthritis drug Enbrel for Amgen and Wyeth. With the approval, Boehringer Ingelheim will also be able to provide custom biopharma manufacturing services for other customers selling to the U.S. market. The Biberach facility was inaugurated in September, 2003. Ag Chems Exempted from Import Taxes in Brazil The social integration program tax (PIS) and social security financing tax (COFINS) on goods imported into Brazil no longer apply to fertilizers, agricultural defensives, and raw materials for manufacturing these types of products. Some basic foodstuffs are exempt as well. Before the new law took effect, companies paid a 9.26 percent tax on agrochemical imports.