September 2004 Lanxess Officially Operating Lanxess, which is comprised of the former U.S. commodity rubber, plastics and chemicals businesses of Bayer Group, officially began operating in August, 2004. The company became a legal entity on July 1, 2004. It expects to be separated from the Bayer Group at the beginning of 2005. The creation and separation of Lanxess are designed to enable the company to focus on core businesses, speed decision making, allow for improved response to customer needs, and provide freedom for exploring new markets. Lanxess, with annual sales of approximately $1.5 billion, will be a part of the Lanxess Group, which is based in Germany.   Why Does Butter Get Darker and Harder in the Refrigerator After It Is Opened? Butter discolors for the same reason that apples or bananas turn dark - oxidation. Although butter doesn't have a peel to protect it from the ravages of air, it does have a snug wrapper surrounding it until it is first used by the consumer. Only after the wrapper is eliminated or loosened does the butter darken. Why does it get harder? The cold temperature in the refrigerator causes the moisture in the butter to evaporate. Many other foods, such as peanut butter and onion dip, become less plastic when refrigerated because of evaporation of liquid. Famous Quotes of the Month - We probably wouldn't worry about what people think of us if we could know how seldom they do. (Olin Miller) - One of the oldest human needs is having someone to wonder where you are when you don't come home at night. (Margaret Mead) - The creditor hath a better memory than the debtor. (James Howell) - Advice is seldom welcome; and those who want it the most always like it the least. (Lord Philip Dormer Stanhope Chesterfield) - Never explain. Your friends do not need it and your enemies will not believe it anyway. (Elbert Hubbard) Ciba Reorganizes Personal Care Operations The home and personal care operations of Ciba Specialty Chemicals (annual revenues of $296 million (SFr 367 million)) will be transferred to other business units. The company is making the move after failing to find appropriate acquisitions to grow the home and personal care segment. The specialty effect products operations will be combined with Ciba's plastic additives business, and the whiteners and hygiene effects operations will be transferred to the company's water and paper treatment segment. Ciba also appointed current executive committee member Tim Schlange to the newly created position of chief strategy officer. Technology Will be Key to Syngenta's Success Syngenta plans to focus on technology development to maintain its leading position and increasing its share in the agrochemical market sector and also find ways to transfer its expertise in plant genomics to other market sectors as a means for continued success. Minimal growth in agrochemicals is the main driver behind the company's new strategy. The company is removing low-profitability products from the market and focusing on the introduction of innovative technologies. Syngenta is also increasing its efforts in the vegetable and flower seeds area, which is experiencing double-digit growth. The plant genomics technology it is developing will ultimately make agricultural crops suitable for use as sources of biopharmaceuticals, enzymes and biofuel raw materials. Recently the company acquired several North American seed and plant breeding companies to strengthen its position in corn technology. Cambrex Appoints New CEO Cambrex Corporation appointed John R. Leone, recently president of Aventis Dermatology, as president, CEO, and a member of the board of directors effective August 23, 2004. Current president and CEO James A. Mack will remain chairman of the board of directors. Gary L. Mossman was also appointed as executive vice president and chief operating officer. Dow Appoints Next CEO Andrew M. Liveris, now president and COO, will become CEO of Dow Chemicals effective November 1, 2004. Liveris will replace current CEO William S. Stavropoulos, who will remain chairman. Liveris has been with Dow for 28 years, holding positions in manufacturing, sales, marketing, and new business development in different areas of the world. Prior to becoming COO, he served as business group president of Dow's performance chemicals unit. Sigma-Aldrich Appoints New President Jai Nagarkatti has been appointed president and COO of Sigma-Aldrich Corp., replacing David Harvey, who will remain as chairman and CEO. The scientific research, biotechnology and fine chemicals business units will report to Nagarkatti, while other functions will be under Harvey's control. Nagarkatti has been with Sigma-Aldrich for 28 years, serving most recently as president of the scientific research business group. Chinese GDP Growth is Positive Indicator for Chemical Suppliers The gross domestic product (GDP) of China has been forecasted by the International Monetary Fund (IMF) to grow at 9 percent per year, a half a percent point higher than previously predicted. The IMF estimates that foreign imports into the country will increase from $394 billion in 2003 to $512 billion in 2004. The fast growth rate will have a positive impact on both Asian and Western chemical producers importing goods into the China. The GDP for 2005 was lowered by half a percentage point to 7.5 percent in response to the government's somewhat successful attempts to curb the explosive growth rate and gain some control over the Chinese economy. Indian Chem Companies Face Trucker Walkout Chemical companies in India are dealing with a major transportation crisis due to the nationwide trucker's strike. The country's largest transport group, the All India Motor Transport Congress (AIMTC), is protesting a proposed 10% service tax on transport operators. The government says the tax would only apply to transport booking agents, and that a "suitable abatement in service tax" would be considered. In preparation for the strike, transport workers only accepted bookings of 500 km or less. The strike began on August 21, 2004. Indian ports are overflowing with undelivered cargo and foreign buyers are expected to cancel or defer orders with Indian companies if the strike continues for a long period. The government has not indicated that it will offer concessions, while the All India Petroleum Dealers' Association is considering whether or not to conduct a "one-day stoppage" in support of the truckers. Sales Improve for Many Specialty Chemical Companies Several specialty chemical companies reported improved second quarter sales and earnings, including Arch Chemicals, Cytec Industries, Engelhard, FMC, Rohm and Haas (R&H), and Sigma-Aldrich. The strengthening economy has been credited for the gains. Continued increases in raw material and energy prices will reduce the overall impact of the sales growth on overall profitability. U.S. Oil Companies See Petrochemical Sales Increase Higher margins and record sales volumes have contributed to a dramatic increase in petrochemical sales at major U.S. oil companies. ExxonMobil saw its chemical earnings increase 38 percent in the second quarter, while ConocoPhillip's chemical earnings (through its 50 percent interest in Chevron Phillips Chemical (CPChem)) rose almost 4-fold as compared to the second quarter of 2003. ChevronTexaco, which owns the other 50 percent of CPChem, plus its Oronite subsidiary, experienced a 75 percent increase in chemical earnings. Workers Return to LG-Caltex Oil With the end of the strike at South Korea's refiner and aromatics producer LG-Caltex Oil, all unionized workers returned to their jobs. Through government-ordered arbitration, the company agreed to a 4.5 percent pay increase, which is significantly lower than the 10 percent originally demanded by the employees. Police and public prosecutors will determine if any criminal or civil charges will be filed against any of the workers who went on strike. The arrest of five union leaders has been sought by the government. LG-Caltex says its refinery is now operating at 90 percent capacity, while its aromatics units are up to 80-90 percent capacity. The company, which is a 50:50 joint venture between South Korean conglomerate LG Group and ChevronTexaco Corp, had to close its facilities for a short time due to the strike. Alltech Acquired by W.R. Grace W.R. Grace will integrate the recently acquired chromatography company Alltech International into the separations business of Grace Davison Specialty Materials, which it formed in July, 2004. Terms of the deal were not disclosed. This acquisition follows a number of others by Grace, including Grom Analytik+HPLC, Modcol, and Argonaut Technologies' Jones Chromatography HPLC business. Borden Acquisition Finalized Apollo Management finalized its $1.2 billion (Euro 980 million) acquisition of Borden Chemical from investment firm Kohlberg Kravis Roberts & Company. Borden manufactures thermoset and other high performance resins, adhesives and specialty chemicals and had sales of $1.4 billion in 2003. Divestment of Akzo Nobel Catalysts and Phosphorous Businesses Completed The sales of its catalysts business to Albemarle and its phosphorous chemicals business to private equity firm Ripplewood Holdings have been completed by Akzo Nobel. The company received approximately $1.02 billion (Euro 850 million) for the two businesses. The proceeds of the sales will be used to reduce debt and "upgrade" Akzo's portfolio. European Companies Impacted by Poor Custom Manufacturing Performance Akzo Nobel, DSM, Lonza, and Rhodia have all been impacted by poor performance in the custom manufacturing sector. Operating income at Akzo Nobel's pharma division dropped 20 percent while sales were down 9 percent as a result of lower sales volumes, currency effects, restructuring charges and legal costs. DSM's Life Science Products division experienced a 52 percent decline in operating profits and a 6 percent drop in sales in the second quarter, which the company attributes to the poor antibiotics market. Rhodia saw sales fall 11 percent in the second quarter, and also struggled with rising raw material costs. A drop in custom manufacturing business resulted in a 6 percent decrease in sales and a 16 percent decline in net profits at Lonza, according to the company. Rhodia Sale of NA Phosphates Business Finalized The $550 million (Euro 447.1 million) acquisition of the North American specialty phosphates business of Rhodia by Bain Capital has been completed. The producer of specialty phosphates for use in food and beverage, consumer products, pharmaceutical and industrial applications has been renamed Innophos. Randy Gress has been named chief executive, and the business will continue to operate under the same management. Sale of Dynamit Nobel Finalized MG technologies finalized the $2.71 billion (Euro 2.25 billion) sale of its Dynamit Nobel chemicals business to private equity group Rockwood Specialties. The sale includes the Chemetall, Sachtleben, CeramTec and DNES units of Dynamit Nobel. The sale of its Dynamit Nobel Kunststoff (DNK) plastics business to Flex-N-Gate Corp. will be completed in the third quarter of 2004, according to the company. Aventis Files Suit Against Teva Aventis filed a patent infringement suit against Teva over a new drug application (ANDA) that Teva submitted to the U.S. FDA for marketing a generic version of Actonel (Risedronate sodium tablets), a treatment for osteoporosis. Since Aventis began the suit within 45 days after receipt of the Teva application, the FDA cannot approve the marketing of Teva's generic version for 30 months or until a court decision has decided in Teva's favor, whichever occurs first. J&J Subsidiary to Build Biopharma Plant in Ireland Centocor, a Johnson & Johnson subsidiary, plans to build a $650 million biopharmaceutical facility for the production of monoclonal antibodies at Ringaskiddy, Cork, Ireland. Ireland hopes to be one of the world's largest areas for biopharmaceutical manufacturing. Other companies including Wyeth, Genzyme Corp. and Schering-Plough Corp. have already made biopharmaceutical investments in Ireland. When all of these projects are completed, Ireland believes it will have 50 percent of the industry base. The country faces competition from Switzerland, Singapore and Puerto Rico. Merger of Two Japanese Pharma Firms Okayed by EC The merger of Japanese pharmaceutical groups Yamanouchi and Fujisawa was approved by the European Commission (EC), which indicated that the businesses are mainly complementary and that they will face competition from larger players in Europe. The merged company will operate under the name Astellas Pharma and will have annual sales of more than $8.13 billion (Yen 900 billion, Euro 6.58 billion). Pfizer Unloads Scandinavian Generics Business Pfizer announced the sale of NM Pharma, its Scandinavian generics business, to Merck KGaA for $67 million (Euro 54 million). The transaction is expected to take place once all regulatory approvals are received. NM Pharma, which has annual sales of approximately Euro 39.1 million, will be integrated into the Merck Generics business in Scandinavia and will operate under the name Merck NM. The acquisition will make Merck the leading provider of generics in the Nordic region. Sanofi Acquires Over 95% of Aventis Sanofi-Synthelabo reported that it has acquired 95.47 percent of Aventis' share capital and also secured 95.52 percent of the voting rights of Aventis. The minimum tender condition for the buyout will be satisfied if stock market regulator Autorite des Marches Financiers (AMF) confirms the provisional results. U.S. Court Rules in Favor of GlaxoSmithKline The US District Court in Wilmington, Delaware ruled that GlaxoSmithKline's method-of-use patents for the anti-nausea drug Zofran (Ondansetron) were valid. The decision was a negative one for generics firm Teva. The longest patent expires in December of 2006, unless GSK claims the six-month pediatric exclusivity. Zofran earned sales of $1.41 billion (Euro 1.14 billion, GBR 774 million) in 2003. Monsanto, Syngenta Back in Court In a suit filed in the Missouri state circuit court in St. Louis, Monsanto has accused Syngenta of breaching terms of a licensing contract granted to Ciba-Geigy (Syngenta's predecessor) for genetically modified (GM) Roundup Ready soybeans. This suit, which requests termination of the license, is an extension of a suit filed in May in which Monsanto asked the court to require Syngenta to commercialize Roundup Ready soybeans under one product brand. DeKalb Genetics, a Monsanto subsidiary, also filed a suit against Syngenta that seeks to prevent Syngenta from developing glyphosate-tolerant corn. Syngenta in turn filed an antitrust lawsuit in U.S. District Court in Wilmington, Del., claiming that Monsanto has an illegal monopoly on GM corn in the U.S. In the suit, Syngenta states that Monsanto has "engaged in a pattern of illegal and improper activities to maintain its monopoly on key corn traits in the U.S., including Monsanto's attempts to keep Syngenta from competing with GA21, an established and proven glyphosate tolerant corn trait." Syngenta acquired the GA21 rights from Bayer CropScience in May of 2004.