Value Creators: the best Chemical Connections: how performing chemical companies liberalized chemicals trade revealed by a TSR analysis underpins global value chains Pages 8–9
Pages 10, 20
Rawpixel -
gui yong nian -
The End of One Era and the Beginning of Another
Be part of
The years following World War quire — I believe — a new structure industrial laboratories continued II were very kind to chemis- for the field, and raise a fundamen- until the 1980s, and then slowed.
tal question: „What must chemistry Since the 1990s, the chemical try. The research universities be in the future?" It has been the industry has focused on process and the chemical industry — one of field of science that studied atoms, improvement and on short-term something the most beneficial partnerships our bonds, molecules, and reactions. product development, rather than
And 50 years from now? Will it still to contribute actively to the devel- technologically sophisticated society be the study of molecules and what opment of new areas of large-scale has seen— developed the forms that they do? Or will it deal with com- chemistry. In the past two decades, BUSS CHEMTECH
we know. Industrial chemistry became plex systems that involve molecules, the chemical industry has intro- EICKHOFF
in any form — in materials science, duced few fundamentally new prod- a core part of the industrial world; aca- biology, geology, city management, ucts. The changes that forced large demic chemistry explained how atoms whatever — „chemical" or not? companies out of long-term research VENTURIS IT
and molecules made reality happen.
are relatively straightforward to un- Chemistry Blended the
derstand: the goals of capitalism and Practical and Conceptual
the public markets, and incentives Join us at Achema During this time complex organic for senior management, both favor 15-19. Juni, Halle 9.1, Stand D 66 synthesis, quantum chemistry, laser This postwar era simultaneously investments in which financial re- spectroscopy, production of polyole- developed academic chemistry — to turns are expected to be short-term. fins, organometallic chemistry, mo- analyze and understand complex- Research is generally a long-term lecular beams, medicinal chemistry, ity — and industrial chemistry — to investment. In the face of pressure Newsflow
and countless other areas developed produce the chemicals used by for profitability, much of industry has and flourished. The range of com- society. The two are sometimes de- chosen to emphasize the manage- mercial and scientific opportunities scribed as separate, and even antag- ment of existing businesses, rather Ashland sells the car-care products was very large.
onistic. Far from it! The interchange than to try to create new ones: re- of its Valvoline business to Niteo.
This prolific era is over, and between them — albeit usually un- search in the chemical industry is chemistry is now facing classes of planned and often haphazard now often considered as an expense, Mylan tries to escape its pursuit opportunities, and obligations to so- provided extraordinary benefits to rather than an investment.
ciety, that are even more interesting, both. This stimulating exchange of More on Page 2 and 3
but entirely different. They will re- information between academic and Continues Page 6
Prof. George M. Whitesides, Harvard University
Moberg has acquired Balmex from Chattem for $3.9 million.
Dow and Olin in $5 Billion Asset Merger
Shell to Buy UK's BG Gas Group
Daiichi Sankyo has unloaded its entire 8.9% stake in Sun Pharma- ceutical, raising $3.2 billion.
More on Page 3
In a tax-efficient Reverse Morris Trust ments to support downstream prod- transaction valued at $5 billion, ucts aligned with Dow‘s market fo- Energy and petrochemicals giant Shell has announced cus. Separately, the companies have Dow Chemical has agreed to sepa- agreed a 20-year capacity rights con- plans to acquire UK oil and rate a significant part of its chlor-alkali tract calling for Dow to supply ethyl- gas exploration company BG Group in A. Schulman plans to invest €5-7 and derivatives businesses and merge ene from its US Gulf Coast grid. Dow a cash and share transaction valued at million to build a new masterbatch would receive payments up-front them with chlor-alkali specialist Olin.
plant in Turkey.
and Olin ethylene at „co-investor, in- £47 billion.
Andrew Liveris, CEO, Dow
tegrated producer economics." Ben van Beurden, CEO, Shell
Lanxess has started production The merged company incorporat- "We have jointly created a solid The deal would give investors a at its new EPDM rubber plant at ing Dow's US Gulf Coast chlor-alkali foundation for success for Olin, driv- premium of about 50% to the clos- Changzhou, China.
and vinyl, chlorinated organics and existing Olin shareholders owning en by the benefits of greater scale, ing price of BG Group‘s shares on be a "springboard for a faster rate global epoxy businesses would have about 49.5%. Olin would continue to an enhanced ability to capitalize on April 7, the date the plans were an- of portfolio change, particularly in More on Page 15 and 18
revenues of almost $7 billion, more be headed by CEO Joseph Rupp and globally advantaged cost positions nounced. BG Group is the UK‘s third exploration and other long-term than double Olin‘s current sales. a senior management team made up backed by US shale gas economics, largest energy company, employing plays," he added.
Pro forma EBITDA would be around of Dow and Olin employees. Three technology advantages, broader 5,200 people in 24 countries.
Combining the two businesses Merck has named Udit Batra to $1 billion based on 2014 figures and new members nominated by Dow market access and significant enve- Shell CEO Ben van Beurden, is expected to further develop the lead the life science business after excluding synergies. Olin expects would join the existing nine direc- lope integration," Dow CEO Andrew commented: „BG will accelerate Anglo-Dutch group's competitive the integration of Sigma-Aldrich.
annualized cost synergies of at least tors on Olin‘s board.
Liveris, said.
Shell‘s financial growth strategy, position in the LNG market, includ- More on Page 19
$200 million within three years.
With Dow an important anchor With this transaction, Dow stands particularly in deep water and liq- ing the core growth regions of Asia In the transaction expected to customer of Olin as it grows the ac- to exceed its target to divest $7 bil- uefied natural gas (LNG), two of and the Atlantic basin. Total LNG close this year following regulatory quired business, the relationship is lion to $8.5 billion of non-strategic Shell‘s growth priorities and areas capacity following the merger is approval, Dow shareholders would planned to include several long-term businesses and assets, Liveris add- where the company is already one expected to be 45 million t in 2018, receive 50.5% of Olin shares, with supply, service and purchase agree- of the industry leaders. It will also compared to Shell‘s 26 million t in 2014.
The acquisition of BG would boost Shell‘s proven oil and gas re- entgelt bezahlt · 78719 serves by 25% and its production capabilities by 20%. The deal would also give it enhanced positions in competitive new oil and gas projects, particularly in Australia‘s LNG mar-ket and in Brazilian deep water oil exploration.
Shell said it expects to realize annual pretax savings of $2.5 bil-lion by 2018, comprising $1 billion of operating cost savings and a $1.5 DISTRIBUTION& LOGISTICS FOR THE billion reduction in exploration ex-penditure. If the deal goes through, CHEMICAL AND LIFE SCIENCE INDUSTRIES
BG shareholders will own approxi- Special Supplement
mately 19% of the combined group. chris/sharpnose/Kai Krüger – in this Issue!
CHeManager International 5/2015 Clean. Safe.
UNION Instruments Corp.
measuring devices ensure
that energy-containing gases
are used as economically
Front Page
South African Analytical Lab optimizes Pipetting
as possible.
Monika Alder Novotni, Hamilton Bonaduz In reneries, chemical plants, Reinventing Chemistry
Surfactants in a Globalizing World
steel mills, oil and gas The end of One era and the Beginning of another The Requirement for More Sustainable and effective Materials en- Quality and efficiency in Pharma Manufacturing
industries, biogas plants, and Prof. George M. Whitesides, Harvard University sures a Demand for Innovation and Technological DevelopmentInterview with John Hibbs, CESIO Part 2: PaT Can Turn Batch Processes into in the gas supply.
Continuous Processes no Compromise on Performance
David Humphrey, ARC Advisory Group With explosion protection! Market & Companies
The Challenges on the Road to non-Phosphate Dishwashing TabsHeike Kohm, BASF Current and Future trends for Pharma Logistics
Pharma Management Radar Survey Finds Optimism Reinventing Sustainable Value Creation
Strategy & Management
but also expectations To Cut Costs Why the Chemical Industry Must Decouple economic Growth June 15-19, 2015, Frankfurt/Germany, Dr. Josef Packowski and Andreas Gmür, from ecological Footprint Intellectual Property in China's Chemical Industry
Hall 11, Booth E27 Camelot Management Consultants Prof. Thomas Müller-Kirschbaum, Henkel Companies Will Have to Prevent, Detect and Respond to IP Loss to access Growing Market Roles Under ReACh
Value Creators
ReaCh Demands that Competitors Work Closely Together — Nick Blank, Blackpeak Group; Dr. Kai Pflug, BCG's Total Shareholder Return (TSR) analysis Reveals Certain Tasks Still Challenge Industry Management Consulting – Chemicals Best Performing Chemical Companies Dr. Susanne Kamptmann Yves-Pierre Willers, Andreas Gocke, People · events · Publications
The Boston Consulting Group Production
US Companies Point to Increase Federal
UNION Instruments GmbH At A Glance
Regulations as Barrier to Growth
Zeppelinstr. 42, 76185 Karlsruhe/Germany Industrial Water Management
By Reducing Its Thirst for Water the Process Industry can Phone: +49 (0) 721-68 038 10 Lawrence D. Sloan, SOCMA Conserve Resources and Cut Cost Fax: +49 (0) 721-95 243 33 Chemical Connections
How Liberalized Chemicals Trade Underpins new Challenges in Chemical Purification
Global Value Chains Ion exchange Resins Lead the Way to Comply with High eU Standards Servet Gören, CEFIC Alexander Lane, Dow Chemical SABIC in Shale Gas Deal With
Henkel to Acquire Adhesives
Proxy Advisory Firm Backs Hedge
Unnamed US Supplier
Producer Novamelt
Fund's Criticism of DuPont
Saudi Arabian petrochemical giant Former CEO Mohammed Al- Düsseldorf-based German consumer hotmelt adhesives used most widely Nelson Peltz, the activist sharehold- lieves operating efficiency has room SABIC has signed a deal to import Mady, who left the company in Feb- chemical specialist Henkel said it in self-adhesive labels and tapes. Its er owner of hedge fund Trian Fund for improvement, as the board and shale gas from the US for use at its ruary to become president of Saudi plans to acquire Novamelt, a private- UV-curable hotmelts in particular Management, which is pressing for management "are not communicat- Teesside complex in the UK, act- Arabia's Military Industries Corp, ly owned company based at Wehr in are claimed to withstand even high DuPont to split into two companies, ing well with shareholders." ing chief executive Yousef Abdul- had previously said SABIC was in- southern Germany, to further en- temperatures and heavily changing has gained a powerful backer in In response, DuPont's manage- lah al-Benyan told the news agency terested in importing US shale gas to hance its competence in the area of weather conditions.
proxy advisory firm Institutional ment said it strongly believes that ISS upgrade its Teesside cracker.
hotmelt adhesives. Financial terms "Targeted investments in com- Shareholder Services (ISS).
"reached the wrong conclusion" in The executive did not reveal the Benyan said SABIC is still consid- of the acquisition, which is subject plementary leading technologies Without naming any names, the failing to recommend that sharehold- name of the gas supplier, saying no ering a proposal to build a plant to to anti-trust approval, are not be- are an integral part of our global firm on Apr. 27 recommended that ers vote on for all 12 of its "highly- agreement on disclosure had yet convert crude oil directly into chemi- ing disclosed. Closing is subject to strategy," said Csaba Szendrei, sen- DuPont shareholders give seats on qualified and experienced director been reached.
cals, bypassing the refinery step. The anti-trust approval. In addition to ior vice president, Packaging and the board to some of Trian's proposed nominees" rather than only eight.
Benyan said the timing and other proposal was originally announced by its German base, the company with Consumer Goods Adhesives at Hen- new directors. Altogether, the fund "By ignoring the success of our details of the project, which he de- Saudi oil minister Ali al-Naimi early 100 employees has a US production kel. "Novamelt's solutions perfectly has nominated four, including Peltz.
transformative strategy and the scribed as the first use of shale gas last year. Asked if talks had been held site at High Point, North Carolina, as fit to our existing pressure sensitive Trian, which currently owns 2.7% value-destructive nature of Trian‘s exported from the US Gulf in Britain, with companies to develop the pro- part of a 51:49 joint venture.
adhesives business," he added.
of the US chemical producer, wants break up agenda, as well as dis- are planned to be announced during ject, Benyan told Reuters that, "ide- With annual sales of around €50 Henkel's Adhesive Technologies to see it group its agriculture, nu- missing the fact that the addition the third quarter. The gas will meet ally SABIC would like to do the project million in 2014, Novamelt manu- business unit reported sales of more trition and health and industrial of Trian‘s nominees would remove the company's "full demand" for the by itself." Any partner "would need to factures a wide range of specialty than €8 billion in 2014. (dw) biosciences units into one higher- critical experience from DuPont‘s next ten years and is renewable be- make an important contribution and growth company, while separating board," the chemical giant said ISS yond ten years, he added.
help to spread risks." (dw) out its more cyclical businesses.
"demonstrates a fundamental lack ISS said it believed some of Tri- of understanding of our business Ashland Sells Valvoline
an‘s criticisms of DuPont may be and the needs of a global science warranted. Especially, it said it be- IMCD Buys India's
Business to Niteo
US specialty chemicals producer Valvoline-branded and private-label Ashland has agreed to sell the car- maintenance chemicals sold into the PPG Buys Automotive Materials
Dutch specialty chemicals distribu- €9 million and employs 18 people, care products of its Valvoline busi- do-it-yourself (DIY) sector.
tor IMCD has acquired Kushalchand will be integrated into IMCD India.
ness to Niteo, a subsidiary of private Sam Mitchell, Ashland‘s senior Supplier Revocoat
Sons in India. The family-owned Mr. Amit Hirani, former owner of equity firm, Highlander Partners. vice president and Valvoline‘s pres- business, based in Mumbai, distrib- Kushalchand and the new business The deal includes the manufactur- ident, said the proceeds from the US-based PPG Industries has com- The addition of Revocoat to utes specialty ingredients to India‘s director of IMCD India, comments: ing and distribution assets in Her- sale of the non-strategic asset will pleted the acquisition of Revocoat the automotive coatings business fast-growing processed food indus- "IMCD and Kushalchand share a nando, Mississippi. Financial terms be reinvested in generating more from the Axson Group. Financial de- strengthens PPG‘s global automo- try. Financial details were not dis- common strategy through provid- were not disclosed.
rapid, profitable growth within the tails were not disclosed. Headquar- tive adhesive and sealants product ing the Indian food industry with a Car-care products represent less company's core lubricants business.
tered in France, Revocoat is a global and technology offerings, said Cindy IMCD said the purchase will wide range of key ingredients from than 4% of Valvoline‘s sales which Jeff Hull, managing partner of supplier of sealants, adhesives and Niekamp, PPG‘s senior vice presi- provide a platform for it to further world leading manufacturers. This were $2 billion for the year ended Highlander and chairman of Niteo, damper products for the automotive dent, automotive original equipment strengthen and expand its activities synergy will enable IMCD to further Dec. 31, 2014. They include the said the Valvoline assets will provide industry. It employs more than 500 manufacturer (OEM) coatings. (eb) in the country‘s food market. Kushal- strengthen their presence on the In- brands Car Brite, Eagle One and the foundation for a „strong buy and people and operates eight manufac- chand, which has revenues of about dian market." (eb) Pyroil. Also included in the sale are build platform." (eb) turing facilities and one R&D center.
CHeManager International 5/2015 Mylan Said to Prepare Poison Pill Potion Against Teva
Braskem Reevaluating West Virginia Cracker
US-managed generics drugmaker In moving its headquarters out of than $30 billion in annual revenue, Brazilian chemical giant Braskem is While Braskem believes the pro- stream, and many of these are not Mylan, now domiciled in the Nether- the US, through a $5.3 billion deal to add to earnings in the first year and reviewing plans to build a world-scale ject is still interesting, especially as lands, is said to be preparing a "poi- acquire parts of Abbot Labs' gener- eventually generate $2 billion in an- ethane-fed cracker and downstream feedstock from the nearby Marcellus Braskem is still contemplating son pill" defense to escape its pur- ics portfolio, Mylan not only escaped nual savings.
polyethylene plants in Parkersburg in Shale gas fields is easily accessible whether to build new polypropylene suit by Israeli generics giant Teva.
US corporate taxes, reports say. The purchase of Mylan would the US state of West Virginia.
and 40% of US demand for PE within plants in the US, where availability Teva has offered $40.1 billion Through the relocation, the drug- also help the Jerusalem-based Speaking in New York at a meet- 500 miles of the proposed facility, is still tight, or debottleneck existing to acquire its smaller rival, which maker is now able to benefit from group expand its offering of harder- ing of Société de Chimie Industrielle, he said the cost advantage of a US- plants. Much depends on the avail- itself is pursuing a smaller player, anti-takeover defenses anchored in to-produce medical products such Fernando Musa, CEO of Braskem based ethane cracker over a naph- ability of propylene feedstock in the Perrigo. Analysts have speculated Dutch law.
as soft-gel caps, topical and inhalant America – which also oversees Eu- tha-fed unit has sunk from $600 right quantity at the right location, that Mylan's grab for Perrigo was a The poison pill Mylan will be able technologies and injectables, while ropean operations – said that in million a year ago to only around tactic to help fend off Teva. Perrigo to leverage foresees the board creat- increasing its portfolio of treatments light of receding crude oil prices $150 million at present.
The Brazilian petrochemical has now rejected Mylan's nearly $29 ing an independent foundation that for the nervous system.
the company would not build a US As another cost factor, the Bra- group currently has five PP produc- million takeover bid.
can exercise a call option agreement Teva has come under pressure cracker to go on stream before the zilian executive also pointed to the tion facilities in the US – at Marcus The Israeli drugmaker's offer is set up between itself and the com- through the emergence of generic year 2020. Most of the engineering long availability of ethylene, as in Hook, Pennsylvania; Kenova, West contingent on Mylan not completing pany, diluting the rights of ordinary competition for its multiple sclerosis work for the planned facility's first the wake of the shale euphoria, Virginia; La Porte, Freeport, and the proposed deal with Perrigo. In drug Copaxone, as well as from new phase already has been completed.
many new plants were brought on Seadrift, Texas. (dw) its first reaction to the hostile take- The foundation would have the oral treatments.
over bid by Teva, the board of the right to exercise the call option if it A merger of Mylan and Teva Dutch-based drugmaker has unani- feels it is in the best interest of the would create a generics giant with mously rejected the more than $40 company. This would free manage- annual sales of around $30 billlion CCS to Be Commercialized at Grangemouth
billion offer.
ment to pursue alternative plans.
and market capitalization of around After a comprehensive review Teva meanwhile has been press- $100 billion. It also would be the The UK and Scottish governments Recent reforms in the UK elec- "is evidence that the UK govern- conducted in consultation with its ing ahead with its quest for Mylan, biggest pharmaceutical industry plan to invest more than €5 million in tricity market reform, combining an ment's steps to promote CCS are financial and legal advisors, the announcing that it could "prompt- deal so far this year and the second engineering and feasibility studies for Emissions Performance Standard working." board said it had concluded the ap- ly" divest some of its operations to largest of the past 12 months, fol- a Carbon Capture and Storage (CCS)- (EPS) and the Contract for Differ- Summit will spend 18 months un- proach "did not meet any of the key obtain regulatory clearance. The lowing the takeover of Botox manu- equipped coal gasification power ence (CfD), are said to make such dertaking detailed research and fea- criteria that would warrant Mylan company said it planned to work facturer Allergan by generics rival plant in Grangemouth, Scotland. What low carbon investments increasing- sibility studies with the ultimate ob- departing from its successful and with antitrust authorities to assure makes the Caledonia Clean Energy ly attractive. Jonas Helseth, direc- jective of designing, siting, financing longstanding standalone strategy that the deal can be completed by The latter deal followed a failed Project somewhat unique, its backers tor of Bellona Europa, a Brussels- and building the new 570 megawatt and consider engaging in discus- the end of 2015; however, it did not hostile takeover attempt by Ca- say, is that the governments do not based nonprofit organization that coal-gasification power plant Scottish sions to sell the company." reveal which operations it might be nadian pharmaceutical producer intend to directly subsidize the facility supports environmental improve- power plant. Fitted with CCS technol- In a letter sent on Apr. 27 to Teva prepared to divest.
Valeant in cooperation with activ- being built by Summit Power, based at ment projects throughout the EU, ogy, it will attempt to capture up to CEO, Erez Vigodman, the Mylan Citing people familiar with the ist investor Bill Ackman‘s Pershing Seattle, Washington, in the US.
said the Grangemouth CCS project 90% of its CO2 emissions. (dw) board's executive Chairman, Robert matter, the news agency Reuters Square Capital Management. Mar- J. Coury, said the board had "unani- said some of Mylan's top investors, ket speculation has it that Valeant mously determined that Teva‘s pro- including Paulson and Co – a New and Novartis' generics arm Sandoz posal grossly undervalues Mylan, York-based hedge fund that owned may be interested in acquiring Per- Solvay Creates Business Unit for Specialty Chemicals
and would require Mylan‘s share- around 3% of Mylan at the end of holders to accept what we believe 2014 – have encouraged the compa- Sandoz is currently embroiled in Solvay has established a new global The Special Chem unit, with „With its increased scale and en- are low-quality Teva shares in ex- ny's board to consider the proposal.
a patent dispute with Teva over a business unit for rare earths, spe- annual sales of about €850 mil- hanced innovation capabilities, change for their high-quality Mylan Teva said the acquisition of Mylan generic MS drug that would compete cialty chemicals and fluorine. The lion in 2014 and 3,100 employees Solvay Special Chem is better posi- would create an entity with more with Copaxone. (dw) fluorine business was formerly part worldwide, will be headquartered tioned to capture growth opportu- of Solvay‘s aroma performance busi- in Seoul, South Korea. It will be led nities and will focus on leveraging ness unit with net sales of nearly by Hua Du and reported within the our technology and market position €30 million last year.
advanced materials operating seg- in auto-catalysts and fluor special- Total Spending €600 Million on Refinery Conversions
Solvay said the move was to sim- ties to drive new growth in targeted plify and improve the efficiency of Roger Kearns, member of markets, namely in automotive and its overall group structure.
Solvay‘s executive committee, said: electronics." (eb) Total has revealed plans to revamp At Donges, near Nantes, Total and react to a decline in profitability, and upgrade two of its five refiner- will spend €400 million to convert which Total blames on overcapacity ies in France to meet the demands its refinery to produce low-sulphur and heightened competition from of new markets and restore profit- fuels in line with the latest EU speci- players in Asia and the Middle East fications and to "capture profitable as well as US companies with access The oil and petrochemicals giant to cheap shale oil and gas.
is spending €200 million to turn the Conversion of the facilities will Total said there is no need to La Mède facility in the south into take place without layoffs or per- convert the refineries at Gonfre- France's first biorefinery. As one of sonnel transfers to other group sites, ville in Normandy, Grandpuits in the biggest in Europe, the upgraded the group stressed.
the Paris region and Feyzin near plant will be able to meet the grow- CEO Patrick Pouyanné pointed to Lyon, as these have state-of-the-art ing demand for biofuels, it says. the need to realign refinery opera- operations and are still profitable Crude oil processing here will be tions and products in Europe to the despite the deteriorating refinery phased out up to the end of 2016.
meet the needs of changing markets EU Commission Accuses Gazprom of Antitrust Violations
The European Commission has said, the EU believes Gazprom dered competition in the gas mar-charged Russian gas giant Gazprom "may have built artificial barriers kets of Bulgaria, the Czech Republic, with abusing its dominant market preventing gas from flowing from Estonia, Hungary, Latvia, Lithuania, position in central and eastern Eu- certain central European countries Poland and Slovakia.
ropean gas markets and violating to others, hindering cross-border In a statement, the gas giant the EU's antitrust rules.
called the objections unfounded, If it can prove competition viola- "Keeping national gas markets saying the company "strictly ad- tions, the Commission can impose separate also allowed Gazprom to heres to all the norms of interna- fines of up to 10% of Gazprom's charge prices that we, at this stage, tional law and national legislation global turnover. It has given the consider to be unfair," she said.
in the countries where it conducts company 12 weeks to respond to The Commission says Gazprom business." the allegations.
used oil-linked formulas to favor Russia supplies an estimated In particular, Competition Com- some countries and penalize oth- one-third of the EU's gas require- missioner Margrethe Vestager ers. In its view, the company has hin- Chemspec Europe
US Chemical Activity Barometer Suggests 2015 Gains
The Chemical Activity Barometer might continue to see a strengthen- can be used to determine turning (CAB) of the American Chemistry ing. Construction-related chemis- points and likely trends in the wider Council (ACC) was up 0.1% in April, tries have been adversely affected as measured on a three-month mov- by bad weather so far this year, but US chemical producers also re- ing average, the US chemical pro- we expect an improvement as we main upbeat on their shale gas cost ducers' association said.
get further into spring," said Kevin advantage, despite recent steep de- Having reached an index of 98.1, Swift, the association's chief econo- clines in the price of crude oil.
last seen in January 2008, ACC said Speaking at a recent Responsible the CAB – reflecting production, eq- "The data on plastic resins and Care conference held by the Ameri- uity prices and product prices, along polymers for packaging suggest that can Chemistry Council, the indus- with other indicators – remains retail sales should continue to be try association's CEO Cal Dooley 2.6% ahead of the year-ago figure. strong as well," Swift added.
pointed to the ongoing investment This, it says, suggests that gains in The activity barometer is derived boom across the country, which he business activity will continue into from a composite index of chemical said gives the industry the chance to the fourth quarter.
industry activity and, as the industry reestablish itself as a leading global "All of the major production- has been found to consistently lead supplier of energy and feedstocks related indicators are up and we the US economy's business cycle, it + + + Find all content of this issue plus latest market news on + + +
CHeManager International 5/2015 Current and Future Trends for Pharma Logistics
Pharma Management Radar Survey Finds Optimism but also Expectations To Cut Costs
A wind of change is in the air when it comes to logistics in the pharma- to concentrate on their core busi- ceutical industry. although most companies are still quite optimistic ness. While for the Generics mere financial considerations also play a with regard to the current business climate, there seems to be a rising very important role for logistics out- awareness of the important role logistics might play in current and future chal- sourcing, other major drivers for the lenges such as price pressure. and new service offerings "beyond the pill" also Innovators are the qualification and specialization of service providers could affect logistics substantially: The majority of industry players are currently and the flexibility they offer.
executing focus initiatives in various fields of logistics, including organization, Given the expectation that phar- process and network setup. at the same time, however, there is still some room maceutical companies, especially Innovators, will increasingly offer for optimization with regard to various strategic changes in logistics to further additional services in the medium- term future, logistics strategies will have to align closer with manufac-turing and commercial strategies. So This is the picture that emerges This type of pessimism has gained far, however, little more than 10% of from the fifth Camelot Manage- relevance over the last 12 months, respondents have a regular process ment Consultants Pharma Man- which might be seen as a sign of with clear global roles and responsi- agement Radar survey, a biannual still-growing competitive pressure bilities in place when it comes to the survey that examines the general on some Innovators due to expiring alignment between logistics distri- climate in the pharmaceutical in- patents and increasing regulatory bution strategy and manufacturing malp -
dustry and takes an in-depth look strategy. Regarding the integration at a varying current management In accordance with their general with commercial strategy, there is topic. In a one-week period between industry outlook, most respondents dropped dramatically in terms of last year. In addition, more than 40% ture. Some considerable movement even more room for optimization.
January and February, more than are optimistic with regard to their investment attractiveness (from 50% of respondents are nervous about can be observed, however, when it It seems, however, that this prob- 20 executives from globally active own business development. More to 17%) since last year. For Southern political risks in growth markets, comes to service-related trends. The lem has been realized, as intra- pharmaceutical companies based in than 90% expect their sales perfor- Europe, the situation looks equally which is of course due to the politi- relevance of additional patient-spe- company collaboration is widely 16 countries and spread over four mance to improve while 96% are bad — it has not improved during the cal and economic developments in cific services such as prescription considered a subject for logistics continents participated in the online confident of being able to raise EBIT last 12 months.
Russia/Ukraine, Southern Europe management, consulting services, focus initiatives in the next two or survey. Companies with a business and other emerging markets.
product kits, as well as the impor- three years. The survey found that at model predominantly characterized Given these problems, it is not tance of home-care services, is ex- the moment, there is a lot of move- Logistics will play an increa-
by developing and/or commercial- surprising that more than half of pected to be much higher by 2020 ment in other areas of pharma lo- izing innovative medicines ("In- singly important role for coping
respondents consider cost reduction than during the next year.
gistics: Approximately two-thirds novators") comprised the majority the most important industry trend. One trend to be observed within of the respondents have currently with future challenges in the global
of respondents; roughly one-fifth Securing supply reliability, which pharma logistics is the move toward ongoing initiatives to change logis- pharmaceutical value chain.
were participants from companies is vital for business success, is the regional logistics organization — tics organization and process setup predominantly active in the generics Dr. Josef Packowski, Camelot Management Consultants
second top trend while the continu- segment ("Generics"). Panel partici- ing trend toward outsourcing is also pants represent almost two-thirds of (earnings before interest and taxes) Quite interestingly, the will to reflected in this ranking. Another We have seen already a shift in the
the global Top 20 pharmaceutical in 2015. When it comes to where this invest and the general economic measure to cope with increasing organization of logistics: from a local
companies. The focus topic of the growth is expected, both the Euro- optimism are not accompanied by competitive pressure is the crea- fifth Pharma Management Radar is pean debt crisis and the military growth in employment figures. On tion of additional revenue sources. approach to a regional/global one.
pharma logistics.
conflict in the Ukraine are clearly the contrary, nearly half of all re- Subsumed under the term "beyond Andreas Gmür, Camelot Management Consultants
The executives' view of the busi- reflected in the pharmaceutical in- spondents are planning to decrease the pill," these services do not yet ness climate for the pharmaceu- dustry's demand expectations: Rus- their number of employees, and a belong to the top priority trends for tical industry has essentially re- sia and Southern Europe perform third expect their staff to remain the next 12 months in logistics, but especially with regard to Europe, — which again indicates a possible mained as positive as it had been extremely poorly in this respect. In constant. One year earlier, more they are considered a priority trend where this was the top answer. move away from a strictly local set- in the Pharma Management Radar contrast, expectations have further than a third of respondents had with an interesting perspective for Generally, however, the traditional up to a more regional or even global Survey conducted one year earlier. brightened up for various emerg- been willing to increase employment the medium-term future.
model of local logistics organization logistics focus.
This particularly applies to the Ge- markets — especially figures. As a logical consequence of still plays a major role, while the op- nerics executives, all of whom rate and Eastern Europe. In the mature the cautious employment strategies, Service-Related Trends to
posite concepts, i.e., global respon- the business climate as "good" or markets of Germany and the UK, the the external sourcing trend remains Become More Important
sibility for logistics or an end-to-end Dr. Josef Packowski, managing
at least "mostly good," whereas the Generics see a considerably better on a very high level, with more than responsibility for complete supply partner, and Andreas Gmür, part-
share of pessimistic Innovators has perspective for themselves than the two-thirds of respondents planning When asked about market trends in- chains segmented by product/chan- ner and head of logistics practice,
slightly increased year-over-year.
Innovators, which may be due to the to make use of external support fluencing logistics organization and nel groups, are applied rather sel- Camelot Management Consult-
These mood differences are also rising cost pressure in these coun- during the next 12 months. Just setup, the majority of respondents ants, Mannheim, Germany
reflected in the outlook on the eco- tries' health-care systems.
like in 2014, this trend is particu- see increased challenges in products In accordance with the general nomic developments during the next These expectations are also re- larly strong in the Generics segment, requiring active temperature control sourcing trends, external support 12 months: While all participat- flected in many of the pharmaceu- where none of the respondents has and traceability both in 2015 and has become a matter of course with Please register here to participate in the ing Generics are optimistic, more tical industry's regional investment plans to decrease external outsourc- during the next three to five years. regard to logistics as well. For near- next Pharma Management Radar survey: than one in four Innovators fear plans for the next 12 months. China ing in 2015.
Security requirements and meas- ly all regions of the world, at least that the business climate will "re- is clearly considered the most im- As far as the greatest risks for urements against counterfeiting as four in 10 respondents say that they Order free copies of Camelot's studies on main just as bad" or "deteriorate." portant market while Russia has the companies' business develop- well as pressure to reduce logistics have outsourced the biggest share the global pharmaceutical industry at: ment during the next 12 months are costs are also expected to become (more than 75%) of their warehouse, concerned, price decrease due to more important or even significantly transport and order-management patent expiry has climbed from the more important both with regard to services. When extending the scope fourth position to the top risk since the near- and the medium-term fu- to the year 2020, the respondents do not leave any doubt that the out- sourcing trend in logistics will con- tinue. As main drivers for this de- Camelot Management Consultants velopment, most respondents name the avoidance of investments into low value-added services in order + + + Find all content of this issue plus latest market news on + + +
CHeManager International 5/2015 DuPont to Buy Microbials Specialist
Recipharm Buys Synthonics
Daiichi Sankyo Unloads Entire Stake
in Sun Pharma
DuPont has announced plans to buy our in-house microbial discovery Swedish drugmaker Recipharm has The pharmaceutical firms first In a pre-negotiated share sale announced, allowing it to recoup al- California biotech company Taxon programs." acquired $2 million worth of pre- began collaborating in 2013 with agreed a year ago, Japan‘s Daiichi most all of the rupee-denominated Biosciences, specialized in microbi- Testing of Taxon products is ex- ferred stock in Synthonics and has the signing of a joint marketing built Sankyo has unloaded its entire 8.9% original acquisition price.
omes for development of biological pected to begin this year, and Du- promised to buy an additional $2 around Synthomer's drug delivery stake in India's mammoth generics In buying Ranbaxy, Daiichi San- Pont expects the first products to be million of the stock, contingent on the technology for metal coordination producer Sun Pharmaceutical In- kyo had hoped to cash in on the ge- Terms of the deal, set to close launched within five years.
US metal coordination chemistry spe- of pharmaceutical APIs.
dustries, raising 200 billion rupees nerics boom, but instead found itself during the second quarter, were not DuPont's agrochemicals arm cialist achieving certain milestones Synthonics CEO Ken Slepicka ($3.2 billion).
having to write down $3.7 billion generated more than $1 billion in expected during 2016. In connection said his company is "delighted" to Indian media reported that Dilip half a year later when the extent of Taxon's products for pest con- annual sales of biologicals in 2014.
with the investment, Recipharm's join Recipharm in helping advance Shanghvi, Sun Pharma's founder, the US Food and Drug Administra- trol and plant quality will help Du- Many global agrochemical and Carl-Johan Spak, executive vice presi- promising molecules to market. was among the buyers of the Dai- tion's sanctions against the company Pont create new seed, leaf and soil seed market leaders, including dent, technology and development has He added that the agreement and ichi shares. The sale closes the fi- for manufacturing irregularities be- products for row crops, fruits and DuPont's US rival Monsanto and joined Synthonics' board of directors.
financial support "will help us fur- nal chapter of the Japanese drug- came public.
vegetables, the US chemical giant Germany's Bayer, are also pursu- Additionally, the two companies ther advance several of our current maker's 2008 acquisition of India's Noting that Sun Pharma has a ing bolt-on acquisitions to broaden have signed a joint development projects to commercialization." Ranbaxy, which was acquired in full record of acquiring troubled drug- Frank DeGennaro, director of their biological products for plants. agreement, giving Synthonics access Spak said the transaction ex- by Sun in March of this year.
makers and returning them to prof- DuPont Biologicals, added that the Experts forecast growth rates of 10- to Recipharm's expertise in drug de- pands Recipharm's footprint in the Observers of the deal said Dai- it, media reports quoted Shanghvi "broad intellectual property hold- 15% for this market segment, which velopment, marketing and manufac- US and builds on the existing joint ichi Sankyo profited from the 80% as saying the company's priority is ings" of the company founded in currently counts around $2 billion in turing in exchange for a royalty pay- marketing agreement with Syn- increase in the value of its Sun to regain the trust of US regulators. 2000 will „complement and enhance annual sales. (dw) ment on certain compounds.
shares since the Ranbaxy deal was AbbVie and Puerto Rico Announce
Sartorius Stedim Biotech Buys
Moberg Buys OTC Brand Balmex
$30 Million Expansion
From Sanofi
AbbVie is expanding an existing site Puerto Rico Industrial Develop- French biopharmaceutical industry assays are used in the early stages of Sweden's Moberg Pharma has ac- "Adding Balmex to Moberg in Puerto Rico at a cost of $30 mil- ment Company (PRIDCO) is promot- contract supplier Sartorius Stedim drug comparison and comparability quired US over-the-counter drug- Pharma's US portfolio is a great fit, lion, adding to its capacity for bio- ing the expansion with incentives for Biotech (SSM) has acquired Bio- as well as for lot-release testing of maker Balmex from Chattem, the within our core area of topical der- job creation and infrastructure.
Source, a privately owned Glasgow, US consumer healthcare division of matology," said Moberg CEO Peter The proposed expansion will "AbbVie's expansion in Barcelon- Scotland-based biotech firm for French pharmaceutical producer Aubagne-headquartered SSM take place in AbbVie's site located eta is very important for us, as this an undisclosed sum. The Scottish said the acquisition will "help de- Sanofi, for $3.9 million in cash.
He said the company is "con- in the northern municipality of site is one of the world's most ad- company, in the market since 2007, velop its service offering through the The acquisition sum is roughly in tinuously evaluating opportunities Barceloneta, already home to two vanced biopharmaceutical facilities, employs 85 people and has annual drug development pathway." line with the more than $4 million an- to further leverage its US sales and of the company's state-of-the-art contributing to our island's growing sales of about €9 million.
The French company with an- nual sales of the OTC specialist, whose marketing infrastructure," and this reputation as a biotech hub," said BioOutsource provides contract nual sales of €683.5 million has its portfolio includes products used for deal contributes immediately to According to Stephen Muldoon, Puerto Rico governor Alejandro testing services to clients in the global own manufacturing and R&D sites diaper rash. The brand will be sold sales and earnings as well as the vice president of engineering and García Padilla.
biopharmaceutical sector to monitor in Europe, North America and Asia through Moberg's current OTC chan- long-term financial goal of deliv- operations, the company is focused The US drugmaker established safety and quality of biological drugs and a global network of sales offices. nel in the US, primarily in chain drug- ering profitable growth and an on "providing a significant impact its first manufacturing facility on and vaccines and also offers services Its key manufacturing and research stores, as well as hypermarket chain EBITDA margin of 25% from 2016. the island in 1969. (dw) to the biosimilars industry, where its site is in Germany. (dw) Walmart and at specialty toy retailers.
BASF Sues Umicore over
Evonik Inaugurates €1 Million Super
A. Schulman Adds Masterbatch
Alleged Patent Breach
Capacity in Belgium
A US court has given Belgium's Laboratory in 2009. Argonne is par- German chemical producer Evonik as the new EDANA mannequin test US plastics compounder and distrib- "This investment is indeed Umicore, one of the leading pro- ticipating in the suit.
has inaugurated a new €1 million for incontinence articles.
utor A. Schulman has added a new aligned with current megatrends viders of cathode materials for Along with breaching its patents, application technology center for su- For the first time, the company PET compounding unit at its Bor- and addresses the needs of the batteries, until Apr. 17 to reply to BASF accuses Umicore of selling perabsorbent polymers in Krefeld, said, this test allows the application nem masterbatch plant in Belgium.
packaging market," said Heinrich allegations by BASF that the com- the battery technology to another Germany.
of realistic in-use conditions to the While not disclosing either in- Lingnau, vice president and general pany breached patents for nickel- firm. It also asserts that the com- Evonik said the enlarged labora- standardized lab evaluation. It is vestment cost or capacity figures, manager Europe, Middle East and cobalt-manganese (NCM) cathode pany threatened to sue a customer tory strengthens its position as an also open to customers for training the company said the additional ca- raw materials used in lithium-ion considering a switch to the Ludwig- innovative solutions provider for and testing sessions.
pability will "significantly increase" Schulman markets its PET prod- batteries for electric cars and port- shafen group as its supplier of bat- superabsorbent polymers, allow- "Our customers will directly ben- output and reinforce its position as ucts under the "PolyPet" brand able electronic devices.
tery components. BASF claims that ing implementation of the newest efit from an even further improved a supplier of masterbatches for the name. In other news, the US compa- The German chemical giant, Umicore's action has cost it billions test methods, which will further technical service," said Norbert European food sector.
ny has launched a registered public which filed suit in a federal court of dollars in potential sales and de- strengthen product knowledge and Westerholt, head of Evonik's Baby In its first phase, the new line will offering of $110 million aggregate in Wilmington, Delaware, as well as prived it of the ability to compete target-oriented innovation efforts.
Care Business Line. Evonik's supera- be dedicated primarily to the pro- liquidation preference of Cumulative with the Federal Trade Commission as a supplier for electric car plat- The new facility is equipped for bsorbent polymers business employs duction of additive concentrates and Perpetual Convertible Special Stock, (FTC), licensed the patents from forms expected to launch in 2016 the evaluation of superabsorbent more than 600 people worldwide. white PET masterbatch.
subject to market and other condi- Chicago-based Argonne National and 2017. (dw) polymers and hygiene articles, such SiVance Opens Lab for Silane
and Silicone Technologies
Belgium's SiVance, a subsidiary of ity to quickly develop and scale new Milliken & Company, has opened silane and silicone technologies.
a new research and development The lab is also planned to speed IMPROVING THE PHARMACOKINETIC
laboratory at its R&D and manu- process development for custom PROFILE OF DRUGS
facturing campus in Gainesville, manufacturing of specialty silanes, Florida.
silicones and other chemistries.
SiVance said the new center, "This state-of-the-art facility is a CHEMICAL
part of a planned series of invest- major milestone in our continuous ments targeting current and future investment strategy for the busi- customer needs in markets such as ness, which was initiated following electronic semiconductors, contact Milliken's acquisition of SiVance in lenses, coatings and light-emitting 2011," said SiVance vice president, diodes (LEDs) will enhance its abil- Saikat Joardar. (dw) OF PEPTIDES
Interferon β-1a
is a glycosylated 166
amino acid protein and an
approved drug substance to
treat multiple sclerosis.
UCB to Sell Established Brands in
Bachem and
India to Dr. Reddy's
Two pioneers in their respective ADVANTAGES OF CHEMICAL
fi elds collaborating to advance Belgium‘s UCB has agreed to sell dy‘s Laboratories, said the acquired innovation in drug development.
• Homogeneous products: chemical its established brands in India, portfolio would accelerate his com- synthesis yields well-defi ned including its franchises in the ar- pany's presence in the high growth eas of allergies and respiratory areas of dermatology, respiratory dis orders, to Dr. Reddy‘s Labora- and pediatrics with market lead- • Most chemically synthesized tories for the equivalent of about ing brands like Atarax, Nootropil, peptide drugs can be easily adapted to glycosylation €118 million. About 350 members Zyrtec, Xyzal and Xyzal M.
of staff will transfer from UCB to Mark McDade, UCB‘s chief oper- • Competitive production costs Dr. Reddy‘s.
ating officer, said the sale will allow Alok Sonig, senior vice president the company to focus on its neurol- and India business head of Dr. Red- ogy portfolio in India. (eb) + + + Find all content of this issue plus latest market news on + + +
CHeManager International 5/2015 ◀ Continued Page 1
be (in principle) easily accomplished: SeanPavonePhoto -
combining different departments This choice of direction has had sev- (chemistry, biochemistry, chemi- eral consequences: cal engineering, materials science), 1) It has ended (or constrained broadening education, and changing in scope and character) the unique the criteria for tenure to give credit and mutually beneficial intellectual for collaborative research are among partnership between industrial and them. Others may be more difficult. academic chemistry that character- For example, there is growing agree- ized the 1960s to 1980s.
ment (at least in the US), that gradu- 2) It has increasingly limited the ate research groups in many areas number of jobs for chemists in in- of science (including chemistry) need dustry, and made a career in indus- some form of restructuring.
trial chemistry less attractive for The big chemical companies students choosing what to study.
are essential to the production of 3) It has limited the options for chemical products and hydrocar- chemistry to explore new areas, bon fuels that require handling since many of these areas require large amounts of materials, energy, the kinds of resources and skills in and capital. They have settled into large-scale project management a strategy of technically sophis- that only industry can provide.
ticated improvements to existing The narrowed focus of industry processes and products. Industries on maintaining profitability in com- that do not change when technology moditized product lines, in a busi- One of the new constructions of humankind is the "megacity". An example of such a metropolitan area with a total population of ten million people or more is Chongqing in China. Managing these ensembles
shifts dramatically sometimes dis- ness environment in which costs due requires both knowledge and technology to solve problems at every level, among which are: mass transport of people, water, food, construction materials, power, heat, pollution, and waste; control of dis-
appear — companies that produced to regulation (especially environ- ease; management of education, self-governance, rumor, unrest, and crime. Based on its experience with modeling large numbers of interacting molecules and particles, chemistry may have more to offer to
steam engines, film for silver halide mental regulation) and safety are in- the science of sociology and related areas concerned with large numbers of interacting people than one might expect.
photography, and adding machines creasing, has had another important are examples — but Society will con- effect. It has made the chemical in- tinue to need sulfuric acid, concrete, dustry seem relatively uninterested lems, academic chemistry will need service business model leaves it un- Table 1 contains examples of opportunities (and obligations), but and polyethylene film.
and uninvolved in research whose to integrate „solving problems" and arguably essential, but not exciting. challenges. Some are obvious. Some they are also evanescent: if chem- The largest chemical companies outcome might have social benefit „generating understanding" bet- Does this mean the field is over? are "inevitable," in the sense that it istry does not accept them, other will not disappear, but a future pro- rather than financial return. The dis- ter. Industry must either augment No. It is not over. In fact, a look at is certain that the problem is real fields will. For large chemical com- ducing commodities at declining interest in social return has placed its commodity- and service-based the problems facing society, and the and will be addressed somehow. panies, short-term financial return margins is not exciting. More im- the chemical industry increasingly model to re-engage with invention, requirement for the skills of chem- (The only question is "How?") Some will continue to dominate strategy. portantly, these enormous, techni- in the position of appearing to be a come simply by assuming that com- Will it be possible to combine the cally sophisticated companies have necessary, valuable, but not neces- mon wisdom is wrong. Some are academic enthusiasm for obligation- unique skills in managing technical- sarily attractive part of the industrial purely my personal opinion and free funding, government´s need to ly demanding and dangerous pro- economy. That strategy may not be Research in the chemical industry
their connections with „chemistry", solve problems, and industry´s focus cesses on very large scales, in con- the best for it in the long term.
is now often considered as an expense,
as it currently defines itself, may, for on profitability? trolling flows of heat and materials, Although academic chemistry some, not be immediately obvious.
and managing capital: it would be a rather than an investment.
has migrated into new fields (bio- If chemistry needs to great loss if those skills were not ap- chemistry, materials science, and Setting Priorities for the Future
change — from the style developed plied to managing water resources, computational chemistry are ex- in the period post-WW II to that atmospheres, and megacities. So- amples), and academic departments or face the prospect of settling into istry that can be applied to the so- For the foreseeable future, many of needed to solve very different types ciety (and their own stockholders) have proliferated, the historical core a corner of an industrial society lutions of these problems, indicates the most important problems for so- of problems — who should lead the would be much better for it if they disciplines have drifted more toward that is comfortable, but largely ir- exactly the opposite. But the struc- ciety (and perhaps for government) were to choose to explore avenues "iteration" and "improvement" and relevant to the flows of technology tures that served so well in the past will require chemistry, although not Universities should, ideally, lead in for growth, rather than to settle into away from "discovery." that change the world.
will not do equally well in the future.
necessarily the kind of chemistry changing the structure of chemistry, a retirement that is irrelevant to In the new era, both academic One change is that some of the now popular in the research univer- not because they are more competent channeling the streams of technol- Nothing Goes on Forever
and industrial chemistry (ideally chemical "opportunities" are now ur- sities. Stabilizing the environment, than industry or government, but ogy that will shape the future world.
with cooperation from government) gent necessities. Academic scientists managing energy, providing afforda- because they are less constrained, The depletion of the vein of new would benefit from abandoning dis- are uneasy when faced with "time- ble healthcare, generating jobs, pro- and because one of their jobs is edu- ideas and commercial opportunities tinctions between science and engi- lines" and "deliverables." Some of the tecting societies in unsettled times: cation, and education is the future. that marked the end of the postwar neering, between curiosity-driven problems facing society (for example, all are extraordinary challenges, Many useful types of change would In short, chemistry must expand its period was inevitable: nothing goes understanding and solving hard climate change, management of en- mission from "molecules," to "every- on forever. And the issue is cer- problems, and between chemistry ergy production and use, lowering thing that involves molecules." For What's next?
tainly not that society has run out and other fields, from materials sci- costs of healthcare and distributing academic chemistry, this expansion New classes of problems – new directions for chemistry of problems for chemistry to solve. ence to sociology.
its benefits) must, in fact, be attacked will provide fresh intellectual and 1) What is the molecular basis of life, and how did life originate? In fact, I would argue the opposite: immediately, and finding approaches practical challenges, and fulfill its 2) How does the brain think? that chemistry may now be the most What's Next?
to their solution is urgent.
ethical obligations to the taxpay- 3) How do dissipative systems work? Oceans and atmosphere, metabolism, flames.
important of the sciences in its po- Other, seemingly less urgent, ers who pay the bills. For industrial 4) Water, and its unique role in life and society.
tential to impact society. The sci- Coming out of this extraordinary enigmas (for example, understand- chemistry, the expansion of scope 5) Rational drug design.
ence and technology that developed era of the 50s to the 80s, chemis- ing the molecular basis of life) will would open the door to new com- 6) Information: the cell, public health, megacities, global monitoring.
in this period will continue as the try has a certain intellectual and be entirely based on curiosity. While mercial opportunities, and to future 7) Healthcare, and cost reduction: "End-of-life" or healthy life? foundation of whatever the field be- organizational style. The percep- there are many problems to which growth. For government and for 8) The microbiome, nutrition, and other hidden variables in health.
comes, but the most urgent oppor- tion — by society, and probably by chemistry is the discipline offering Society, it would build some of the 9) Climate instability, CO2, the sun, and human activity.
tunities now lie in new directions.
most chemists — is that chemistry is the most plausible expertise, how capability needed to solve problems 10) Energy generation, use, storage, and conservation.
These new opportunities are, less exciting than biomedicine, brain will the participants (research uni- that currently seem insoluble.
11) Catalysis (especially heterogeneous and biological catalysis).
however, much broader in scope science, "social engineering", stud- versities, industry, government, and 12) Computation and simulation of real, large-scale systems.
and greater in complexity than the ies of climate change, astronomy, interestingly, in the future, founda- Prof. George M. Whitesides,
13) Impossible materials.
simpler, previous problems, and re- and a number of other fields. The tions) set priorities? Who will do 14) The chemistry of the planets: Are we alone, or is life everywhere? quire new structures and methods. increasing evolution of the chemical what, in what order? How long will 15) Augmenting humans.
To deal efficiently with these prob- industry toward a commodity-and- 16) Analytical techniques that open new areas of science.
Chemistry, Public Understanding, and a Sense of Style
17) Conflict and national security.
18) Distributing the benefits of technology across societies: frugal technology.
This article is based on an essay Prof. White- If someone asks: "what does chemistry do? "better glue" is not an arresting answer. Let me sketch a conversation I have had on various 19) Humans and machines: robotics.
sides published in Wiley's journal angewand- occasions—in one form or another. The person next to me says, "What do you do?" I answer "I'm a chemist." S/he responds: "Chemistry te Chemie International edition, Vol. 54, 2015. was the one course in high school I flunked. What is it that chemists do, anyway?" I have tried two types of answers.
21) Controlling the global population.
The complete essay and references are One is: "Well, we make drugs. Like statins. They are inhibitors of a protein called HMGA-CoA reductase, and they help to control choles- 22) Combining human thinking and computer "thinking." available on Wiley Online Library via the fol- terol biosynthesis and limit cardiovascular disease." (This answer usually ends the conversation.) 23) All the rest: jobs, globalization, international competition, and Big Data.
lowing link: The second is: "We change the way you live and die." The second answer works better.
24) Combinations with adjacent fields.
Emerald Kalama Wins First OK for
Kuraray Expands into
Invista Brings Terrin Polyols
Dutch Benzoic Acid Unit
Bio-based Barrier Materials
to Europe
Emerald Kalama Chemical has re- The added purification and finish- Japanese plastics and fibers group creasing global demand of bio-based Invista is now producing Terrin to serve the growing European de- ceived preliminary approval to build ing capacity will support growing Kuraray is expanding into bio-based food packaging materials, it said.
polyols at its plant in Vlissingen, the mand for competitively priced prod- a second benzoic acid purification demand for the company's high barrier materials with the acquisi- Kuraray said its global sales Netherlands, as well as in the US. ucts with sustainable content," said and finishing process at its facil- purity Kalama and Purox brands of tion of Australia-based Plantic, one network will help develop Plantic's The site produced its first commer- Nadine de Vries, vice president of ity at Rotterdam, the Netherlands. benzoic acid flakes, sodium benzo- of the leading global producers of bio-based barrier business in Eu- cial volumes in late 2014, as well as Terrin and Terate polyols for Invista A building permit is expected later ate granules and liquid benzoic acid, bio-based barrier film used in food rope, US and Asia, where demands completing its registration under EU Specialty Materials. Terrin aliphatic this year, and the expanded output which it provides to the market and in terms of improved freshness, re- REACh legislation. Invista also pro- polyester polyols contain a minimum of 100,000 t/y is expected to be in utilizes for the production of down- Plantic, founded in 2001, produc- duced food loss and waste can be duces aliphatic Terrin and aromatic of 50% recycled content, with some the market by in Q4 2016. The pro- stream products, notably K-FLEX es bio-based barrier materials us- met with the use of the environmen- Terate polyols in Wilmington, North also containing renewable content. ject is the US company's seventh non-phthalate plasticizers and coa- ing a patented polymer technology tally friendly material.
Carolina, US.
Formulators can use Terrin polyols multi-million-dollar investment in lescents. (dw) based on high-amylose starch. The By developing new markets, the "By expanding production of the instead of, or in combination with, the past several years at the Dutch acquisition of the Australian com- Japanese group said it expects to Terrin family of polyols into Europe conventional polyether or polyes- site acquired from DSM Composite pany will enable Kuraray to provide achieve revenue of 10 billion yen and utilizing an existing Invista ter polyols to formulate a variety of Resins in 2010, the company said.
barrier materials which meet the in- (€78 million). (dw) manufacturing facility, we are able polyurethane products. (eb) + + + Find all content of this issue plus latest market news on + + +
CHeManager International 5/2015 Chengdu Rongsheng Pharmaceutical
Ashland Invests in Specialty
Goes Digital with MES
Ashland Specialty Ingredients is binders and coatings, among oth- investing about $89 million over ers.
he Rongsheng pharmaceu- 2014, the MES now ensures exclu- into two stages. The implementation Improving GMP Production Quality
the next three years to increase Capacity for Natrosol will be ex- tical production plant at sively electronic operations and FDA includes completely integrating the production of specialty chemicals panded by 4,700 t/y, or 40%, and 21 CRF Part 11 compliant workflows data at the PCS layer with the ERP For the purpose of patient safety, at its facility in Hopewell, Virginia, that for Klucel by about 50%. Work Chengdu in China's Sichuan with electronic records and elec- layer, as well as real-time commu- pharmaceutical quality assurance, US. The majority of the investment is expected to start in mid-2015. As province has entered into the digital tronic signatures.
nication. The result is a three-layer and data integrity, the project en- will be spent on raising production a result of the expansion, Ashland age. The contract signed in June 2011 The project covers the entire structure of automation, MES and compasses real-time electronic of two key product lines - Natro- expects to add around 17 new jobs blood products factory of Rong- ERP, the foundation of the digital batch records, electronic signature, sol hydroxyethylcellulose (HEC), to the plant‘s current total of 237. between Chengdu Rongsheng Phar- sheng, including production plan- batch design, execution and review used as a thickener in latex paints, The state of Virginia will support the maceutical Co. and Siemens has been ning, equipment status manage- The project strictly follows GMP by exception, full audit trail and and Klucel hydroxypropylcellulose investment with a $700,000 grant as successfully completed. It covered the ment, process monitoring and man- requirements. Implementation and genealogy. It ensures that there is (HPC), used to enable time-release well as other benefits and services. ufacturing declaration of finished validation of the entire project no cross-contamination between delivery in pharmaceutical tablet (eb) different phases of implementing a goods to the warehouse. It meets are completed in compliance with batches. Further, it ensures that Manufacturing execution System (MeS) GMP regulations in terms of pro- GAMP5 guidelines through a col- only equipment that meets the re- Roquette Commissions
at the Rongsheng Chengdu plant. duction procedure standardization laboration between different Rong- quirements in terms of sterilization and lean manufacturing manage- sheng teams (QA, manufacturing, or cleaning and calibration is used. ment. It also supports strict control IT) and the Siemens Industry Soft- The MES system controls the release Compliance with FDA Requirements
requirements of effective production ware organization in China and of production quality parameters. It procedure in compliance with GMP France. All aspects and steps of the also releases production schedules French family-owned group Roquette with a purity of above 99.5%. Ro- After the implementation and suc- specifications. Over 50 work orders implementation from the Unique and plans, and controls the expiry has started up a second production quette's isosorbide is sold under the cessful go-live of phase I in Decem- and 1,000 tasks are carried out on Requirement Specification, Func- date, accuracy and genealogy of plant for its plant-based material, brand name Polysorb and is used in ber 2012, and of phase II in Septem- a daily basis.
tional Specification, Design Specifi- materials. It significantly decreases isosorbide. Roquette said the facil- performance plastics such as poly- ber 2013, the MES system was used cation, to Factory Acceptance Test, risks due to manual operations in ity in Lestrem, Pas-de-Calais, is the ester, polycarbonate, and polyure- in parallel with the paper-based Implementation of
Site Acceptance Test to Installation the production process and im- world‘s largest isosorbide production thane, and curable resins. It can also flows and systems, in compliance Siemens Industry Software
Qualification and Operational Quali- proves production compliance unit with a capacity of 20,000 t/y.
substitute for bisphenol A in poly- with FDA requirements for GMP fication, were meticulously carried through strict process control, the The new plant uses the group's carbonate, and standard plasticisers (Good Manufacturing Practices), In order to ensure smooth imple- out, carefully following validation use of electronic instructions and patented process based on sorbitol such as the phthalates used in PVC. until August 14. Starting in August mentation, the project was split up bar code technology. that can produce isosorbide grades Bayer CropScience to Invest at
New Reactor Ups Arkema's
Evonik's Alabama Site
Brazilian Coating Resin Output
Bayer CropScience plans to locate Evonik, one of Alabama's largest Arkema's Coating Resins business has er range of chemistries," including a plant that would supply produc- foreign investors, will supply start- expanded its acrylic resin manufac- 100% acrylic, styrene acrylic, vinyl tion of its Liberty brand glufosinate- ing materials for the herbicide. Ac- turing capacity at Araçariguama, Bra- acrylic, the company's vinyl VeoVa ammonium herbicide at Evonik's US tual production of the finished crop zil, by 60% through the installation of and polyvinyl acetate (PVA), Schmitt site in Mobile, Alabama.
protection agent will take place at a new reactor. With the start-up, the Troy Wayman, vice president of other Bayer plants.
French chemical producer said it has As production ramps up, Arkema economic development for the Mo- Wayman said co-location ar- "improved virtually every aspect" of said it will begin introducing new bile chamber of commerce, told an rangements linking international its latex production in Brazil, includ- products based on demand and ACHEMA, Frankfurt/Main, Germany Alabama business promotion website chemical producers are becoming ing manufacturing, logistics and ship- market potential. Products initially June 15 – 19, 2015 the Bayer group company will spend more common. In 2013 the devel- ping, storage, filtration and the capa- added will include a high scrub- Hall 3.0, stand F50 $120 million on the project, which opment board approved a tax abate- bilities of the reactor itself, which will bing styrene acrylic resin for use will go on stream before the end of ment for BASF Corporation, US sub- enable manufacturing of new product in architectural coatings; a 100% 2015 and benefit from local invest- sidiary of the Ludwigshafen, Ger- chemistries in the region.
acrylic ideally suited for fast-dry ment incentives. Initially, Wayman many, chemical giant to co-locate "These improvements will enable traffic paints; a styrene acrylic la- said, the Monheim, Germany-based an $84.3 million facility at Evonik's us to begin migrating production tex for use in mortars and grouts, agrochemicals producer had in- Mobile site.
capabilities and product lines cur- tile adhesives and waterproofing tended to build an integrated facility In August 2014, Evonik announced rently available in other parts of the membranes, as well as cement- worth just under $400 million, which plans to invest $113 million at Mobile world to the facility in Brazil," said based skim coats, gap fillers and in would have produced its own starting to create a chemical park that would Eric Schmitt, president of Arkema decorative concrete applications; material. However, as the expected attract co-location projects. The ex- Quimica Ltda. Brazil.
and a high solids acrylic pressure investment cost ballooned to $500 pansion is expected to be completed Products manufactured at the sensitive adhesive for label applica- million, Bayer decided to co-locate.
in mid-2017. (dw) plant will now include a "much wid- Huntsman Increases
Ineos' Ratcliffe Suing
Specialty Amine Capacity
Former Partner MacLean
US chemical producer Huntsman Over the past several years A feud between Ineos chairman Ratcliffe is said to be seeking has announced plans to expand Huntsman, which claims to be the Jim Ratcliffe and former business to cancel MacLean's severance capacity for specialty amines at world's leading manufacturer of partner Calum MacLean has taken package worth "tens of millions of DECREASE
its sites in Petfurdo, Hungary, and specialty amines, said it "has seen a dramatic turn, with Ratcliffe now pounds," as he believes the "poach- Conroe, Texas, US, by 2016. Finan- interest in many specialty amine suing his Ineos co-founder and ing" of an Ineos executive violates cial investment and capacity were product lines accelerate from users former righthand man who rose the terms of the sign-off. Although IN ENERGY
not disclosed.
in the polyurethane foams, coatings, to prominence by micromanaging most of the money is believed to The company said its new multi- lubricants and detergents across the the industrial dispute at the Gran- have been already paid out, City said purpose unit at Petfurdo will add to gemouth, Scotland, refinery and the Ineos chairman wants to with- its manufacturing portfolio, further Stu Monteith, president of Hunts- chemical complex.
hold "the remaining millions." leverage its integrated amines capa- man's Performance Products divi- According to the London business In the meantime, Ratcliffe has con- bility and increase existing specialty sion, said the capacity expansion newspaper City A.M, which broke firmed having written to Synthomer COMPROMISE
amine production capacity at the leverages the company's strong the story, the multi-million pound – saying that hiring Bennett reflects Hungarian facility by 20%.
manufacturing and technology lawsuit centers around MacLean's "very badly" on the reputation of a THROUGHPUT.
At the Texas plant, Huntsman base and enhances what he said is 2014 resignation as chief executive company whose code of business as- will add equivalent capacity and im- already the widest in-house manu- of Ineos Olefins and Polymers Eu- serts that the trust and confidence of prove the flexibility of its specialty facturing capability across the in- rope to take the same job at Syn- suppliers and customers is one of its thomer, formerly Yule Catto. The most important resources.
newspaper said MacLean, who was After receiving a reply, the Swiss- "raided" by the UK-based chemical based entrepreneur is said to be Air Liquide Starts Steam
company, subsequently lured away "considering" his position – Ineos Ineos' finance executive Steve Ben- and Synthomer companies are en- At BEUMER we have a reputation for making things a little nett to become Synthomer's chief twined in several trading agree- diff erent. Take the stretch-fi lm pallet packaging system, Reformer at Bayer TDI Site
financial officer.
BEUMER stretch hood®. In a sector where energy-intensive shrink hooding is still common, BEUMER stretch hood® uses French industrial gases producer bon monoxide and hydrogen to the a non-thermal stretch-fi lm system. The result: better load Air Liquide has officially started new 300,000 t/y plant TDI operated stability, higher throughput, up to 10 times less fi lm consump- up its new state-of-the-art Steam by Bayer MaterialScience at the Socar Licenses Innovene Process
tion and 90% energy savings. All this makes a big diff erence Methane Reformer (SMR) in Ger- site. Dormagen is the designated to productivity – and to the environment. many's Chempark Dormagen. The TDI hub for the soon-to-be-spun for Azerbaijan PE Plant
For more information, visit new €100 million unit described off engineering plastics producer. by Air Liquide as "highly flexible" Connected to Air Liquide's 600km Ineos Technologies has licensed its The facility, scheduled to go on has annual capacity for 22,000 t/y Rhine-Ruhr pipeline, it will also sup- Innovene S process for high den- stream in 2016 in the Chemical of hydrogen and 120,000 t/y of car- ply hydrogen to other customers in sity polyethylene to Socar Polymer, Technology Park in Sumgayit will bon monoxide.
part of the State Oil Company of produce a wide range of HDPE Under a long-term agreement Azerbaijan for a 200,000 t/y HDPE grades to supply growing demand signed in 2012, the gases plant will plant it is building at Sumgayit, for high performance products. be the dedicated supplier of car- + + + Find all content of this issue plus latest market news on + + +
CHeManager International 5/2015 BCG's Total Shareholder Return (TSR) Analysis Reveals Best Performing Chemical Companies
For the second consecutive year, the Boston Consulting Group has con- ducted a total shareholder return (TSR) analysis of the chemical industry. The top 10 chemical companies have excellent returns — fourth best, in fact, among the 25 industries BCG analyzed. There have been big shifts in the composition of the top-performer list compared with the year before. US and european chemical companies have come roaring back, displacing the emerging-market chemical producers that were getting the best TSRs only a few years ago.
Yves-Pierre Willers,
Andreas Gocke,
Boston Consulting Group
Boston Consulting Group
Until recently, the TSR differences European companies are disciplined among regions and subsectors about shedding businesses that have followed a predictable pattern: yielded disappointing profits. Anoth-Emerging-market chemical com- er is the trend toward teaming up in panies had the highest returns of a multispecialty: the Rhodia-Solvay all regions, and agrochemicals and and Clariant-Süd-Chemie mergers fertilizers had the highest returns of have fueled expectations of further all sectors. But that changed dur- consolidation. The third develop- ing the most recent five-year period. ment is the likelihood of outbound Although some emerging-market M&A: for example, Chinese investors companies with five-year TSRs still have made moves to acquire stakes approach or exceed 30%, there are in foreign multispecialty companies Rawpixel -
also quite a few emerging-market or acquire them outright.
companies whose five-year TSRs are Looking more closely, we see negative. As a result, the average that eight of the top 10 companies primarily on its understanding of come much more profitable, closing remarkably little to R&D: less than panies have been particularly smart five-year TSR of emerging-market are based in developed economies, its customers and only secondarily what was once a big gap with their 1% of revenues.
in their approach to apportioning chemical companies is a dismal -2%; and only two have headquarters in on its roots of selling cleansers and US counterparts. Portfolio transfor- What explains the absence of a overhead, putting highly skilled only Japan's average (-8%) is worse.
Latin America. The top companies other hygiene chemicals to institu- mations, the divestiture of subcriti- correlation between large R&D pro- managers in emerging markets achieved their superior TSRs in tions such as hotels. Other power- cal businesses, and the shift away grams and the success of a chemical that can't reasonably be expected Strength In Maturity
one of four ways: through aggres- ful business systems give companies from the commodity business to company? To some extent, compa- to run on autopilot while eliminat- sive revenue growth (for example, control of intellectual property (for more advanced chemical segments nies' thinking about R&D may be ing administrative layers in more The average five-year TSRs of Euro- Synthos, Mexichem and LG Chem); example, Victrex), or allow them to have all contributed to European outmoded. Many chemical compa- mature markets. European com- pean and North American chemical through feedstock-based margin do more innovative application de- companies' improving margins. nies, including some scientific blue panies have not followed this tactic companies are much higher: 7% and expansion (Westlake and SQM); velopment (Croda).
These companies have also focused chips that are still magnets for the nearly as faithfully, and as a result, 4%, respectively. Emerging-market through pricing-based margin ex- on productivity in a variety of ways, world's best chemical talent, empha- some of them still have layers of chemical companies tend to focus pansion (Croda); and through valu- How the Top Performers Created Value
including consolidating country size chemical breakthroughs. This management that are more com- on the base-chemical and basic- ation multiple improvements result- structures into regional structures, is true of many Japanese chemical plex — and costly — than necessary. plastic sub-segments, leaving them ing from improved macroeconomics Chemical companies can improve setting up shared services for ad- companies, as well as some Euro- To the extent that they can let go of vulnerable when demand cools off in (Sherwin-Williams, Eastman and their performance in a number ministrative functions, unwinding pean and US ones. Companies in their insistence on organizational those sectors. We expect all of these W.R. Grace).
of ways: They can use technology, complexity in the reporting matrix, these regions all make relatively consistency, European companies factors to change in the next dec- switch to a new kind of feedstock, and removing layers from their or- large R&D investments.
may be able to get a few more per- ade, and for Asia-Pacific and Latin go after a new customer segment ganizations.
Yet it is legitimate to ask how centage points of cost out of their American players to emerge as or enter a new region, or make a In contrast, Japanese companies many breakthroughs can be expect- SG&A functions.
much stronger competitors. But for A different analytic ap- business model change. Eventually, have continued to struggle to im- ed from the world's chemical labs. In Fixed-Asset Productivity: The now, the less mature structures and proach — viewing the top compa- all of these show up in operational prove and now have the bottom of most chemical segments, it is prob- chemical industry is, in general, business models of chemical compa- nies through three different time metrics — specifically, in the seven the profitability rankings to them- ably less important to find the next capital-intensive, and diversified nies in these regions have put them periods — suggests that there are measures we believe are the most breakthrough innovation than to be chemical companies in particular at a disadvantage.
two strategic points of control that closely tied to TSR: Within the sectors, the big profit creative about applying and adapt- face a big challenge in allocating In contrast, conditions are be- chemical companies use. Either ▪ revenue growth; accelerator has been the world's ing compounds that already exist.
capital. Chemical companies have coming more favorable for North of these two strategies can give rising need for food from the agri- This is not to say that R&D has a tendency to overinvest in the ac- American chemical companies, chemical companies market values ▪ innovation and R&D; cultural sector. Agrochemicals and lost its value — far from it. But the tivities that led to success in the particularly with the rise of shale that vastly exceed the replacement ▪ selling, general, and administra- fertilizers have benefited from the evidence suggests that companies past and to underinvest in activi- gas as a resource. Shale gas, which value of their physical assets — the tive expenses (SG&A); huge demand and from the resulting should revisit the goals of their ties that might be important in the serves as a ready form of low-cost clearest indication of the power of a ▪ fixed-asset productivity; price increases. The loss of arable R&D programs and manage their future. Indeed, executives need to feedstock, stands to make the entire company's business model.
▪ working-capital productivity; land combined with an increased R&D expenditures more rigorously, watch for this, as one of the ongo- North American chemical industry The first, more common point ▪ portfolio management need for agricultural output has shifting their R&D efforts toward ing impediments to value creation more competitive. To date, most of of control is advantaged access to boosted demand for productivity- finding solutions and innovations in the industry.
the shale gas benefit has been cap- scarce physical assets. For instance, Revenue Growth: As with companies enhancing chemicals. The dynamics for specific customers and customer Nevertheless, in the past 20 tured by petrochemical divisions of mining assets have been a power- in other industries, there is usually of the food commodity boom have years, the chemical industry has integrated oil companies that are ful source of advantage not only in a positive correlation between rev- also benefited precursor businesses Selling, General and Administra- made strides in its overall fixed- not included in this survey, but the the potash industry but also in busi- enue growth and chemical company that supply active ingredients, aro- tive Expenses: SG&A costs diverge asset productivity. Until 2000, aver- benefit eventually will extend to nesses as diverse as sulfur deriva- TSR. However, the correlation has matic feedstock, mining chemicals widely within chemical segments, age annual capital expenditures ex- many of the more than two dozen tives, fluorine chemistry, tungsten been less pronounced over the past and formulation aids for fertilizer but in the past 20 years the trend in ceeded 10% and sometimes topped North American companies on our carbide, lithium derivatives and 20 years, and in some cases, other and agrochemical companies.
all regions and sectors has been the 20% in the area of base chemicals bromine-based flame retardants. In factors appear to outweigh revenue All other sectors have under- same: downward.
and basic plastics. In recent years, Europe is the region in which BCG's lists of top performers, Pot- growth in determining TSR.
gone some margin erosion, with On average and across all re- capital spending has been much chemical TSRs have remained ash, K+S, Mexichem, Israel Chemi- Indeed, a few chemical compa- base-chemical and basic-plastic gions, SG&A spending has come more restrained. This is partly be- strongest. This may be because of cals and SQM have all benefited nies have achieved TSRs in excess companies faring the worst. These down in the past 20 years — from cause of the thresholds that most the abundance of multispecialty from their advantaged access to of 10% while generating almost no companies have had to absorb oil almost 20% to 15%. A lot of this non-Asian companies — reluctant companies there. At one time, scarce resources. Other asset-based growth. The companies that have price increases since the Iraq war in improvement has resulted from to saddle themselves with excess companies in this subsector were strategic points of control include done this tend to be either highly 2002, and they lack the value-added the effective use of technology to capacity — have put on large-scale among the worst performers of the standard setting (Victrex getting its disciplined about margin manage- products that would allow them to improve productivity. This is par- investments, and partly because of chemical industry. But since 2012, specialized PEEK polymer defined ment or creative about generating recover their increased costs.
ticularly true of European chemical the move away from the 1990s men- the average TSR of multispecialty as a certification requirement for profits from noncritical business Innovation and R&D: Theoreti- companies since 2000. Heavy invest- tality of investing one's way out of chemical producers has improved some aerospace and medical ap- cally, innovation is important for ments in ERP and CRM — undertak- bad results; nowadays, the mindset plications), brands (the position Some companies have had low high-margin businesses. But as the en to minimize IT-related problems is more that operations and busi- Sherwin-Williams has carved out TSRs despite rapid revenue growth. data shows, there is not necessarily when fears about the Y2K bug were ness units must earn the right to for itself in the US paint industry), Most of these have benefited from a positive correlation between R&D at their height — have allowed com- invest. The big exception to the rule easement (SABIC's access to low- some sort of commodity price in- expenditures and TSR in the chemi- panies to improve the efficiency of of caution in capital spending seems Investors seem to be focusing on cost feedstock), and scale (BASF's flation, and their poor TSR perfor- cal industry. In fact, only one of the their accounting, sales, back-office to be China, which is creating over- three developments with potential- longtime leveraging of its Verbund mance suggests that investors are companies in our sample with R&D and supply-chain functions. Today, capacity in many areas relating to ly favorable implications. One is the hesitant to reward companies whose expenditures exceeding 4% of rev- European companies have SG&A base chemicals as part of a move portfolio restructuring happening at The second point of strategic revenue gains may be attributable enues achieved an above-average levels comparable to those of US and to outmaneuver Western chemical companies such as Arkema, which control is having a superior busi- to external trends.
TSR, and that result is distorted Japanese companies.
divested its vinyl-product business, ness system. An example is Ecolab's Margin: The big change with re- by the fact that the company has Companies that operate inter- In most other areas, fixed-asset and Rockwood, which divested its ‘Circle the Customer — Circle the spect to chemical company margins a sizable pharmaceutical business. nationally can reduce SG&A costs productivity has been converging, titanium-dioxide business. These Globe' strategy. The company's new has been the improvement in Eu- Indeed, many emerging-market by not maintaining the same infra- divestitures are indications that the products and services are based rope. European companies have be- companies with high TSRs devote structure in every region. US com- Continues Page 9
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CHeManager International 5/2015 ◀ Continued Page 8
payment more efficient in the core Best performing chemical companies
does it take great predictive pow- Regarding flexibility, companies European Union market. There has ers to see that 10 years from now, often hesitate and display a kind of not diverging. Twenty years ago, been no equivalent to economic uni- a similar set of dynamics will have "collective myopia" when change European companies' ratio of rev- fication in emerging markets or in played out and some companies that looms on the economic and social enues per dollar of capital invested Japan, which may explain their rela- are around today will have been ac- was twice that of emerging-market tively high levels of working capital. quired and absorbed by others.
Perhaps it's not all that helpful companies. Now, most regions' ra- Whatever accounts for it, working The coming period of consolida- to say that companies need to be tios are clustered around 1.5:1. In capital is a third area (after profit- tion will present many opportunities smarter than their peers in antici- North America, however, the ratio ability and SG&A spending) in which and risks — especially in an environ- pating the second-order effect of is closer to 1:1. The good news for European companies have made ment of higher multiples. The survi- trends in feedstock, technology and North American companies is that big strides in the past 20 years and 7. Westlake Chemical vors will be those that demonstrate customer demand. The more action- the shift reflects huge investments are now virtually on par with their speed, flexibility, and strategic focus.
able advice might be that companies in shale gas, which is likely to boost North American peers.
In terms of speed, the chemical need to improve the quality of their the region's financial performance Portfolio Management: The avail- industry is undergoing huge chang- corporate planning and foresight for years to come.
9. eastman Chemical able data does not allow for a 20- es — in terms of demand and supply Working-Capital Productivity: year analysis of M&A activity. Still, * Average annual TSR 2009-2013
and regional power shifts. On the When it comes to strategic focus, Working-capital management var- the 10-year data reveals a striking More industry rankings are included in BCG's 2014 Value Creators Report.
demand side, formerly hot growth too many chemical companies are ies widely among chemical compa- pattern: From 2003 through 2012, areas — notably renewable energy in in the habit of letting operational nies. Because inventory levels are US and European companies con- Europe, defense programs in the US, matters become preoccupations a critical part of working capital, ducted a number of transactions, but M&A: Opportunity and Risk Ahead
them. A multispecialty company that and e-mobility everywhere — have of the corporate board. There is companies that have a flexible sup- US companies concentrated mostly is in one type of plastics could move cooled. But there are numerous up- no mystery about why this is the ply chain — and therefore don't have on acquisitions, while European Higher prices that chemical com- into another type or into hybrid ma- and-coming growth applications that case: chemical companies are com- to carry as much inventory — tend to companies focused more on dives- panies have been able to charge terials. These companies have prod- are taking the place of those demand plex, and internal departmental is- have better working-capital ratios. titures. This difference almost cer- and more rigorous expense con- uct boundaries that are, in a sense, drivers, including 3D printing and sues often require resolution. But Many factors determine why one tainly stems from the European in- trols have left many companies permeable. Fertilizer companies wearable electronics. On the supply a plethora of operational topics in company has a good supply chain dustry's greater diffusion. European with excess cash. As a result, these typically don't.
side, there's the influence of shale gas the top-management suite keeps while another company's is inad- companies had more ill-fitting parts companies may be on the prowl for One of the implications of this is in North America and of coal-to-ole- many companies from focusing on equate, but one significant factor to shed. In emerging markets and in acquisitions — or looking for other that the quality of a company's M&A fins in China. Chinese companies are more strategic issues. Leaders have is the interface between sales and Japan, M&A activity of any sort has ways to grow inorganically, by, for function — already important — is by far the biggest new regional force; to find ways to minimize their op- manufacturing. In companies with a generally been more sporadic.
example, taking minority stakes in going to become critical in the next their push into high-value chemical erational involvement, preferably good sales-manufacturing relation- Although the data about US and joint ventures.
few years. It is inevitable that many sectors is likely to create challenges by pushing their direct reports and ship, the supply chain is typically European company M&A activity Japanese companies provide chemical companies will acquire for many Western companies and operational entities to act effective- better, and the working capital-to- is necessarily focused on the past, perhaps the clearest example of a their way into sectors in which jeopardize the profits of those that ly at the interfaces and to resolve revenue ratio is usually lower than we think it offers a forward-looking group that should be taking advan- they don't currently have expertise. are currently operating in Asia.
cross-unit conflicts with minimal in other companies.
implication: US companies have tage of their financial flexibility. For Knowing how to make these moves To thrive in this environment of The other two components of greater skill in the risky business of senior executives at Japanese com- successfully is one capability that is change, chemical companies are go- working capital are receivables adding new businesses. US chemical panies, the challenge will be to en- going to separate the value creation ing to need to quickly adjust their Yves-Pierre Willers,
and payables. European compa- executives are continually scouring ter the world of outbound M&A and leaders from the laggards.
resource allocations and be crea- senior partner, Boston Consulting
nies appear to have benefited from the landscape for companies to buy; divestitures — a world from which tive about seeding new businesses Group, Shanghai, China
unification and from the move to a they may be said to have an always- they have been largely absent.
Who Will Create Value in the Future?
through their venture-capital arms, Andreas Gocke, senior partner,
single currency, which have made on approach to M&A. If, as we be- But the Japanese aren't alone in investing in joint ventures, and re- Boston Consulting Group, Munich,
lieve, this always-on M&A capabil- facing risks in an era of accelerat- It doesn't take a deep knowledge of thinking their supply chains and Germany
ity will be a major source of future ing M&A. Many agrochemical and the chemical industry to see that it business models. It won't be enough value creation, European chemical fertilizer companies face risks and has changed over the past decade. to understand the tactical options; A comprehensive version of companies, as well as those in other will have a harder time than, say, Many companies that were around the winners will be those that an- 2 [email protected] this article can be found on regions, may be at a disadvantage multispecialty companies in find- 10 years ago — including some with ticipate where the market is going compared to US companies.
ing adjacencies that make sense for storied histories — are now gone. Nor and get there the fastest.
US Companies Point to Increased
eder tHE ENcyclOPEdIa ONlINE
al Regulations as Barrier to Growth
Specialty chemical manufacturers latory pressures" among the top ing regulations suggest that if these The third edition of the have identified federal regulations three responses. This option ranked regulatory barriers were addressed, as a barrier to growth in a recent in- second only to "global competition." companies would be able to allocate dustrywide Business Outlook Survey Rounding out the top three risks was further resources to innovation and Wiley encyclopedia
conducted by the Society of Chemi- "availability of suppliers." growing their businesses.
cal Manufacturers and Affiliates "There is a place for — and often It is also clear from this survey (SOCMA) in partnership with UBM.
a need for — effective, efficient regu- that specialty chemical manufac- According to the survey, more lations that help protect the environ- turers play a key role in the global than half of those who responded say ment, instill public confidence in our economy. This in turn demands a federal and state regulations were industry and protect workplace and keen understanding of often com- a significant barrier to growth last consumer safety," said Sloan. "Un- plex foreign regulations that will AVAILABLE
year and will continue to be a bar- fortunately, there are regulations on help the industry reach the 95% of rier in 2015. Responses also indicate the books now that ultimately im- consumers who reside outside the these companies expect to spend pose significant burdens and costs US. SOCMA understands the increas- more money on regulatory compli- that impact companies of all sizes. ing importance of access to new ance this year than last year, and The majority of SOCMA members markets, and is a staunch supporter Online ISBN: 9781118785317
a quarter of respondents say they are small and medium-sized busi- of free trade agreements that will would need an improved regulatory nesses, which often feel a dispropor- enable its member companies and environment before deciding to ex- tionate impact of these regulations. other specialty chemical manufac- Purchase the 3e of Wiley Encyclopedia of Management on Wiley Online Library pand their manufacturing business.
We need smarter regulations that turers to grow and create new jobs.
24/7 access to this monumental r "The survey results underscore eference work.
will achieve their intended goals While optimism is a bit measured the need for federal lawmakers to without compromising industry's in some areas, the overall results of Online Reference Works combine the quality content you'd expect in a landmark print work harder for specialty chemical ability to innovate and compete in this Business Outlook Survey are en- publication with the convenience and enhanced functionality of electr manufacturers," said Lawrence D. the global marketplace." onic access. With couraging and reflect a growing op- powerful search functionality SOCMA President and CEO. encing, and regular updates, these expertly edited the Business Outlook timism about the general economic and authoritative resour "Onerous and inefficient regulationsces set the benchmarks for scholarly r Survey found that specialty chemical eference.
deprive our members of significant manufacturers are demonstrating Features of the online platform include: growth opportunities." increased confidence in their mar- asked to Navigation: by table of contents indicating plans for new or articles gest risks the ability to expand and follow r to supply chain stability, eferences and view author indices product growth and capital invest- • Enchanced Discoverability: companies repeatedly chose "regu- ments in 2015. search engine delivers Concerns surround- om and immediate results. Search for a keyword or phrase across the full text of a reference work, use wildcards and Boolean operators US Environment Agency May Restrict Some Neonic Use
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giants including market leaders are the primary cause. (dw) + + + Find all content of this issue plus latest market news on + + +
CHeManager International 5/2015 How Liberalized Chemicals Trade Underpins Global Value Chains
Chemicals are vital to our well- chemical industry, bolstering sales way for other bilateral and multi- being. They help us grow more and jobs. But barriers need to be lateral negotiations with and be- stripped away. Despite some mul- tween Asian economies. It can also abundant crops and preserve tilateral trade deals within the contribute to broader acceptance of our food. In the form of plastics, rubber General Agreement on Tariffs and world standards by Japan, where and foam, they help make our homes, Trade (GATT) framework and some many barriers stem from stricter bilateral agreements between the Japanese standards. And thirdly, factories and vehicles clean and com- European Union and its partners, an agreement with Japan could fortable. They enable us to make safer, much remains to be done in open- reduce any handicaps suffered by lighter, cheaper, more durable goods ing markets. And our industry European companies arising from also needs better access to afford- the proposed Trans-Pacific Partner- and structures. and they help us to ex- able energy and raw materials and ship (TPP) agreement to which the tract energy and use it efficiently. Trad- greater harmonization of standards EU will not be a party.
ing chemicals around the world stimu- and regulations around the world. The EU chemical industry also A more coherent policy framework has a lot to gain by increasing our lates competition, provides an incen- would help the European chemical chemical connections with regions tive to develop new markets through industry fulfill its vocation of ensur- including India, China, the Gulf Co- innovation and boosts production ing that by the year 2050 more than operation Council (GCC) and Merco- 9 billion global citizens live well, sur. Spurring EU chemical industry efficiency. But above all, it helps to im- within the resources of the planet.
growth in all these regions requires prove the quality of human life.
eliminating all chemical tariffs and removing all trade barriers, includ-ing export restrictions and export Between 2014 and 2050 the world's duties on raw materials. Ensuring population will surge from 7.2 bil- effective protection and enforce- lion to 9.5 billion, according to the ment of intellectual property rights United Nations. But over the same is essential to give investors confi- period, Europe's total population dence and foster innovation. Non- will decline to 709 million, just 7.5% tariff barriers such as double-testing of the total. Meantime Asia's popu- of products and burdensome licens- Servet Gören, CEFIC
lation will grow to 5.1 billion, 54% ing and labeling requirements, and of global citizens; and Africa will be failure to comply with international home to 2.3 billion, twice as many as standards prevent the EU and these Most chemical products are inter- today, and a quarter of those on our regions from achieving the full com- mediates, used in the production of planet. World chemicals production mercial potential of their chemical other goods. The chemical industry is set to almost double from €3.4 underpins virtually all sectors of the trillion in 2013 to €6.3 trillion in economy and its strategies directly 2030. But most of this growth will be Broad-Based Tariff Liberalization Needed
affect downstream chemicals users. outside the EU: If Europe's industry Fig. 1: Compounding trade deals in key EU markets
The big industrial users of chemicals is to grow and share in the rewards, Despite talks about the importance are rubber and plastics, construc- Europe must reinforce its role as a of global value chains, many coun- tion, pulp and paper, and the auto- chemical exporting region.
Multilateralism Is the Best Option
the WTO lives up to the proclaimed Doing Bilateral Deals
tries have yet to draw logical con- motive industry. Nearly two-thirds importance of global value chains, clusions that growth of all their of EU chemicals are supplied to the Why Liberalized Trade Needs to Happen
By its nature, the chemical industry the goal of the Doha round should be Because the Doha round has made economic sectors requires liber- EU industrial sector, and more than benefits from liberalized trade. Its to substantially reduce or eliminate such slow progress, the EU and alization of not only end-products one-third of chemicals go to other Growth in post-recession Europe products are hugely diverse, innova- tariffs for intermediate products in- other regions and countries have but especially of intermediates like branches of the EU economy such remains low, hampered by mature tive and widely used, and its plants cluding chemicals to help the devel- sought to liberalize world trade chemicals. A narrowly focused en- as agriculture, services, and other markets and an aging population. and employees are located world- opment of these economies.
via bilateral free-trade agreements vironmental goods agreement be- wide. Improving trading opportu- The European chemical indus- (FTAs, c.f. figure 1). CEFIC considers ing pursued by a group of countries nities for chemicals can make the try is being increasingly harmed by that FTAs complement the search therefore misses the point. The industry more competitive.
measures in other regions including for a multilateral deal and offer op- world economy needs broad-based The successful Uruguay round double pricing, export restrictions Trade barriers need
of multilateral trade talks in 1994 and export taxes. The chemicals to be stripped away.
achieved the Chemical Tariff Har- sector is especially concerned about monization Agreement (CTHA) and discriminatory practices regarding The WTO must include in its
Pharmaceutical Agreement, which ethylene feedstock, gas, palm oil agenda more ambitious deals
harmonized chemical import du- and important minerals such as yel- at a regional level.
business activities. The rise of global Domestic and international eco- ties at just 6.5%, 5.5% or 0%. The low phosphorous, fluorspar or rare value chains gives all countries an in- nomic uncertainty aside, EU chemi- European Chemical Industry Coun- earths. It therefore welcomed rulings terest in keeping chemical import du- cal industry exports did reach €139 cil (CEFIC) then started advocating by the WTO Dispute Settlement Body ties low. Nowadays trade is no longer billion in 2013, delivering an EU for a new, ambitious and proactive that export duties and export quo- portunities to achieve agreements in tariff liberalization, including ambi- about "produced here, sold there" but chemicals trade surplus of nearly agenda. The successive extensions tas applied by China to rare earths, areas that are not yet or not suffi- tious tariff reductions for chemicals. "produced everywhere, sold there." €49 billion.
of the CTHA to new members of the tungsten and molybdenum breached ciently addressed by the WTO.
The plethora of regional and bilat- Given an appropriate domestic WTO and updates to the Pharma- its WTO obligations. CEFIC supports Negotiations on TTIP — a radical, eral trade deals being struck may Future Economic Growth
and international policy framework, ceutical Agreement have delivered the strong stand the European Com- far-reaching trade agreement — be- reinvigorate participants to agree Beyond Europe's Borders
the European chemical industry has gan in July 2013 and are ongoing. to international trade rules under strong potential to benefit from fur- TTIP can help reduce the cost of the aegis of the WTO. If the WTO is Since 90% of gross domestic prod- ther forecasted growth in global trading with the U.S. in various to keep relevance for 21st century uct growth will take place outside chemicals demand. The industry TTIP would help companies
ways. A deal would help companies trade, it must include in its agenda Europe in the next decade, inter- firmly supports the European Com- compete more effectively in increasingly
compete more effectively in increas- more ambitious deals at a regional national trade should be a poten- mission's endeavors to underpin the ingly globalized and competitive level.
globalized chemicals markets.
tial growth driver of the European internationalization of European chemicals markets. companies and further liberalize As regards Japan, negotiations Servet Gören, international trade
trade — preferably at a multilateral for an EU-Japan Free Trade Agree- manager, CEFIC, Brussels, Bel-
level through the World Trade Or- tangible benefits for the industry as mission takes against breaches of ment were launched in March 2013 The new CEFIC publication, Chemical ganization (WTO) or via bilateral or well as for consumers worldwide. WTO obligations and the commis- and are proceeding. An FTA with Connections, analyzes the importance regional trade agreements such as Consumption and production of sion's pursuit of bilateral free-trade Japan not only has the potential to and impact of chemicals trade. More the Transatlantic Trade and Invest- chemicals is growing most strongly negotiations. But ultimately we need enhance market access and regu- charts displaying facts and figures from ment Partnership (TTIP) or proposed in emerging and developing econo- improved rules governing access to latory coherence between the EU this publication can be found on page 20.
EU-Japan Free Trade Agreement.
mies and in global value chains. If raw materials at a multilateral level.
and Japan, but it will also pave the CEFIC: EU Chemical Output Stagnant in 2014, Trade Surplus Contracts from All-time High
European chemical production lowering producer costs, long-term some €3.1 billion lower than in Data from January 2015 show contracted by 1%, while output of rose 0.2% in 2014, the chemical problems persist, especially the 2013. This is attributed in part to a that "the worrying performance polymers and consumer chemicals industry federation CEFIC said in challenge of securing affordable sharp fall in net exports to impor- continued," the CEFIC report says. declined 0.6% and 0.2% against its just-published Chemicals Trends energy supplies," he said.
tant trading partner Russia.
Output contracted by 0.3% against January 2014.
Report. By contrast, sales fell 1.1% Net exports of chemicals from the The EU's chemicals trade surplus January 2014, and selling prices CEFIC said chemical produc- year-on-year against the 2013 fig- EU, at €44.1 billion last year, were with Asia — excluding Japan and plunged by 6%.
ers' confidence also deteriorated in ure of €527 billion, and prices sank "significantly" below the record China — widened by €544 million. EU chemicals output in Janu- the first quarter of 2015 compared €48.2 billion surplus achieved in But its net chemicals trade surplus ary declined by 0.3% overall, with to the last quarter of 2014. Mov- "The lack of European growth in 2013, the organization said.
with China contracted from €1.3 bil- worst-hit petrochemicals sliding ing into the second quarter, order 2014 was partly due to falling ex- The net positive trade balance lion to €671 million. The US further 7.6 % against the same month of books were thinner and the out- ports," said CEFIC Director General with non-EU countries — includ- narrowed its chemicals trade deficit 2014. This was partially offset by look for production in the coming Hubert Mandery. "Even if the price ing Russia, Turkey and Switzer- with the EU by €889 million to €5.4 4.2% growth in specialty chemi- months had worsened. Stock levels bluebay2014 -
of oil has fallen here in Europe, land — was €11.7 billion in 2014, billion.
cals. Basic inorganics production remained unchanged. (dw) + + + Find all content of this issue plus latest market news on + + +
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Surfactants in a Globalizing World
The Requirement for More Sustainable and Effective Materials Ensures a Demand for Innovation and Technological Development
The 10th CeSIO World Surfactant Congress and Business Convention in Istanbul, Turkey, 1 – 3 June, 2015 organized on behalf of the european Committee of Organic Surfactants and their Intermediates (CeSIO) will showcase an extensive scientific program on the main theme „Surfactants in a Globalizing World - Creating new Possibilities". Sessions, posters and exhibition will cover the scientific, economic, technical, as well as safety and regulatory aspects of surfactants and surfactant applications in the industry and consumer products. In the run-up to the event, Michael Reubold asked John Hibbs, President elect of CeSIO, to provide a status report on the industry and a sneak preview on what will be discussed in Istanbul.
CHEManager International: Mr a requirement for more sustainable
Hibbs, this year's congress theme
and effective materials, ensuring a is "Surfactants in a Globalizing demand for innovation and techno-
World Creating New Possibili-
John Hibbs, CESIO
ties". Which new possibilities can
you imagine and what will it need

What are the main growth drivers
to take advantage of them?
in terms of geographies? Do you
factant use rising in oil producing expect the BRICS and MIST coun-
J. Hibbs: Surfactants have and have tries (including Turkey, the host
For the "mature" markets, such always had a very large range of country of the congress) to set the
as Europe, we should not overlook applications, because of their ver- pace or are there other markets the dynamic created by the demand
satility. Industry has, and continues that are thriving?
for more sustainable and effective to be able to innovate to meet the products. This drives innovation, requirements of growing demands, J. Hibbs: A simple view of statistics which is not necessarily visible in
and increasing constraints, in terms would suggest that, as mentioned, volume/ value statistics. Mature does of regulatory and user require- population growth and GDP growth ments. We see surfactants being are the key factors. This is certainly used to replace traditional solvents, seen, as China, India, South America What are the main growth drivers
giving lower risk and reduced envi- and SE Asia head the volume growth in terms of application areas?
ronmental impacts. Surfactants can statistics. What is less apparent is Dmytro Tolokonov -
play a key role in the development the growing sophistication of mar- J. Hibbs: The key volume markets for
of technologies such as nanomateri- kets, often linked to increasing con- surfactants are household and per- als, and the use of surfactants and sumer affluence and awareness. sonal cleansing, so the state of these J. Hibbs: We have seen a high level ing environmental burden associ-
J. Hibbs: As a global industry, we face
soluble polymers is a major enabler This drives a growing consumption key areas will always have a sub- of activity in the development of ated with transport, controlling the the challenge of meeting the grow- in the efficient extraction of our oil in more specialty surfactants, linked stantial impact. The rise of extended surfactants & polymers in oil ex- manufacturing conditions (social ing demands of our customers, both to more use of highly formulated oil recovery, including fracking, has traction and production, which chapter) and contributing to wealth in terms of scale, and complexity, is why this topic is featured more production in Europe. Hence, com- within the constraints of finite mate- How have the global and the Eu-
strongly in our 2015 conference. panies like Solvay are continuing to rial resources, economic pressures, ropean market for surfactants as
The source of the carbon backbone, invest in Europe. and growing regulatory burden. a whole developed in recent years
The use of renewable resources
which normally forms the bulk of While every person in Europe (for and what are your growth expec-
the molecule, is also a topic of inter- What role do natural or bio-based
example) uses surfactants on a daily often plays a key part in sustainability,
tations for the years to come?
est and there is work on biomass raw materials for "greener" sur-
basis with extremely few instances but it's not the whole story.
conversion to provide new sources factants play for consumers/cus-
of adverse effects, the regulatory J. Hibbs: It is widely believed that the
of surfactant feedstock, with more tomers and how can they create burden on the products continues
demand for surfactants grows in line efficient use of natural resources. value for the surfactants industry?
to increase. The cost of doing busi- with GDP, and this is generally what laundry products, automatic dish- driven a large increase in use of sur- There is also a trend to more "skin ness in Europe, compared to other we see. In developing regions we washers and specialized cleansing factants and soluble polymers.
friendly" surfactants in personal J. Hibbs: Surfactants industry has regions is currently being assessed
also see a link to population growth. products, together with increased care, replacing the standard pri- always sourced its feedstock from in a cumulative cost study. This has In the future, we expect this trend use of personal care products. This Surfactants are used in a wide mary surfactants with amino acid
both bio-based and petrochemical to be seen as an opportunity for EU to continue, since surfactants are an growing" middle class" can be seen spectrum of applications – from based products. That creates de-
important contributor to the qual- in regions like Turkey, Russia and detergents to crop protection, from
mands for more efficient synthesis, ity of life. The European demand for China. Oil production is also a ma- the cosmetics to the oil & gas in-
and formulation aids to give good surfactants is fairly static in terms jor consumer of surfactants, both dustry. What are currently the hot
product rheology etc.
Oil production is a major consumer of
of volume - in line with the region's for exploration, production and ex- topics in surfactants R&D? What
surfactants, both for exploration, production
economic trends - however there is tended recovery, so we can see sur- could be the next innovation leap?
Sustainability has become a buzz
and extended recovery.
word in many industries. What
are the most important aspects of
sustainability in the surfactants

feedstock to address the demands based businesses to highlight the Clean Growth: Market for Surfactants
of downstream industry and devel- barriers of doing business in Eu- J. Hibbs: Many people make a subcon-
op surfactants with properties for rope. We have already seen a num- scious link between "sustainability" specific applications. There are no ber of consuming industries move to Exceed $40 Billion by 2022
and "natural". It's true that the use fully "natural" products which have outside of the EU (such as textiles), of renewable resources often plays the properties required of the sur- and the low cost of the surfactants a key part in sustainability, but it's factants we all use I our daily lives, they use, often means that the ma- Surfactants facilitate the removal of ers and detergents. In 2014, around est growth is recorded by non-ionic not the whole story. Our industry is so synthetic chemistry is essential to terials must then also be produced dirt and enable to finely mix water 56% of total demand accounted for surfactants. With this type, fatty al- exemplary in the use of renewable give us safe and effective products. and oil. These surface active chemi- this segment. Also, surfactants are cohol ethoxylates (FAEO) dominate. resources, with roughly 50% of the While surfactants consume signifi- We have seen how our industry cal substances are used in every used for example in cosmetics and They can be obtained from palm mass of all surfactants consumed cantly less than 1% of oil production has adapted and developed in the household but also serve for numer- textiles. They are also included in kernel oil or coconut oil and are con- coming from renewable resources, - 90% is burned as fuel - a whole- past to challenges of providing safe, ous industrial applications.
pesticides, antistatic agents, lubri- sidered to be more environmentally which is substantially better than sale change to totally renewable efficient and cost effective materials "In 2014, a worldwide turnover cants, printing ink and many other friendly alternatives to LAS.
other mass- consumption chemicals, materials would stress global land into a growing and demanding mar- of $33.2 billion was achieved with products. For the application area like plastics and coatings. Despite use, and create competition with ket. These changes will continue, surfactants" says Oliver Kutsch, paints and plastics, Ceresana fore- Other Countries, Other Surfactants
leading the way, I'm proud to say that food crops. It is essential for com- and there are still opportunities to manager of the market research casts the highest growth in demand: CESIO is playing a leading role in an ing generations that we DO increase continue to develop products which institute Ceresana. "We expect a 2.6% per year until 2022.
With a world market share of more EU project to increase further the use the use of renewable materials, but give higher performance (allowing further growth in sales of approx. than 36%, the Asia-Pacific region has of renewables in surfactants. Green this needs to be achieved in a sus- lower consumption) based on sus- 2.5% per year so that more than $40 Anionic vs. Non-ionic
the highest demand for surfactants. Carbon is only a waypoint on the road tainable way. Value creation can be tainable materials and processes. billion are reached in 2022." The product types reveal significant to true sustainability, as we have to achieved through more efficient use It's a simple fact that the surfactants Depending on charge and polarity, regional differences: Currently, Asia consider the wider impact of produc- of a wider range of biomass espe- we use in our homes and our work Growth in the Segment Paints and Plastics
a difference is made between ani- reaches a market share of more than tion, distribution and consumption of cially that which is produced outside improve our quality of life, from onic, cationic, non-ionic and other 43% with alkyl benzene sulfonate. On our raw materials and finished goods the tropical regions.
basic hygiene to the production of Ceresana already analyzed the surfactants. The current most sig- the other hand, consumers in West- From a "local" perspective, a key low energy electronic devices. The world market for surfactants for nificant type are anionic surfactants: ern Europe and North America domi- step in sustainability for the sur- What are major challenges the challenge (and opportunity) of the
the second time. Surfactants are the so called linear alkyl benzene nate the market for alkylsulfates factant industry is to continue to surfactants industry is facing and
future is to continue to meet the mainly used to improve the proper- sulfonates (LAS) are mainly used for (FAS), alkyl ether sulfates (FAES) and provide the European downstream how could these challenges be developing needs of our consumers,
ties of aqueous formulations. The detergents and have a global market alcohol ethoxy sulfates (AES) with a industries with products which are overcome or even turned into op-
in a way that benefits every stake- best-known applications are clean- share of 53%. However, the strong- share of around 62%. produced in Europe, thereby reduc- + + + Find all content of this issue plus latest market news on + + +
CHeManager International 5/2015 No Compromise on Performance
The Challenges on the Road to Non-Phosphate Dishwashing Tabs
The global world is connected ing function of phosphate, leading to via social media, search en- lower performance and dirty dishes. This experience should not be re- gines and blogs. Mega trends peated in Europe. High consumer are shared in seconds. Online commu- trust must be upheld, which includes nities give 24-hour guidance on in- the necessity to reformulate existing products in order to maximize per- gredients, performance, use and price formance. How can this be achieved? of detergents and cleaning products. Companies can develop products Cleaning performance, in addition to without phosphate by using highly sophisticated ingredients, such as convenience in use, is still the main powerful yet sustainable, read- prerequisite for purchasing a product ily biodegradable chelating agents. One alternative is MGDA (methyl-glycindiacetic acid), offered by BASF under the brand name Trilon M. Of course, the best ingredient is not enough. It additionally requires the top formulation expertise in the labs of the brand leaders and private-label producers.
Dear Retail: It Comes Down to Winning or
Besides price, consumers com- ing category in automatic dishwash- Phosphate performs this task the way they express their know- Losing a Category — Performance is the Key
Heike Kohm, BASF
pare cleaning performance more ing detergents in Europe. However, superbly, but has a poor reputa- how in cleaning, filming and rinsing often in this connected world. Now- their well-known cleaning level and tion in ecological terms. In 2017, a benefits, as well as in drying proper- Naturally, retailers also need to be adays, consumers are informed the perceived benefits such as fat re- regulation change will take effect ties on different surfaces or build-up convinced to defend their strong Multibenefit tabs in automatic dish- about the benefits of their cleaning moval, drying of plastic, and perfect in the EU: The use of phosphates in on cutlery and tableware. Neverthe- category of automatic dishwashing washing are an example of this. products by watching TV or YouTube sparkling dishes and glasses could dishwasher products, such as dish- less, consumers are experienced in detergents. Phosphate is not only a They enable easy dosing and save commercials and are evaluating the be subject to change in 2017, with washer tabs, will be limited.
judging the results of these most low-cost material but also extremely time for the consumer without com- claims on the packaging to make the upcoming ban of phosphate for With the regulation changes on important criteria of automatic dish- effective. The more sustainable al- promising on cleaning performance. their purchase and repurchase de- this application.
the horizon, formulators of cleaning washing detergents as published in ternative needs to be as powerful However, with the phosphate ban for By now, most multi-benefit tabs products in Europe are searching consumer test magazines. By study- and high-performing but at the automatic dishwashing detergents Let's take the example of auto- consist to about one half of phos- unceasingly for alternative chelating ing these magazines or social media, same time readily biodegradable. in Europe taking effect in 2017, the matic dishwashing tabs. With their phates. They act as chelating agents agents to secure the established and they might even link their results to Why is this important? performance levels in this category multipurpose cleaning and caring to prevent unsightly scale on dishes consumer-expected high cleaning specific ingredients.
Cleaning performance is and will could change. The consumer in the solution, as well as their easy hand- by trapping the calcium and magne- performance level — not only for the remain the dominating buying fac- connected world will take note of ling, they have advanced to the lead- sium ions of water.
branded but also for the private-label Phosphate Alternative — Let's Not Repeat
tor long before price. Consumers are this immediately. It's thus time to products sold in large numbers by only willing to repeat their purchases make the right choice now.
regional retailers. Nobody can afford in this category if the product meets to put products on the shelves that Brand owners had to learn this les- their established, high performance Consumers Are Well-Informed
do not satisfy consumer expectations.
son the hard way, when the phos- expectations. Consumers are not will- Around the Clock
Naturally, consumers do not phate ban was introduced in parts of ing to accept any trade-offs on clean speak the language of formulators the U.S. market in 2010. Alternatives and shiny dishes and are certainly Globally, 80% of the population has — the producers of these tabs — in did not reproduce the strong chelat- not prepared to unload dirty teacups a mobile phone. Smartphone pene- or dishes with bits of lasagna from tration runs at an annual growth last night's dinner. Nor are they will- rate of 30% – 50%. We are heading ing to drink from turbid wine glasses. toward an almost universal mobile How annoying is it to rewash your connectivity. Near-field communica- dishes by hand at the last minute tion will let our machines commu- while waiting for your guests? nicate with each other and directly In the connected world, innova- with the supplier of refills when the tive choices for high-performing and auto dispenser is running low. Who more sustainable ingredients for de- would have expected to ever live in tergents and cleaning products are such a smart world? available. It's time to choose.
In 2014, already one-third of shoppers in the UK compared pro- Heike Kohm, director marketing
ducts via their smartphone while home care and industrial & insti-
shopping. What does that mean for tutional cleaning, BASF, Ludwigs-
retailers, for the formulators of con- sumer products and for suppliers of ingredients? Figure 1: Ingredients of a multipurpose dishwashing tab
Figure 2: Evaluation of the cleaning performance in the BASF lab
2 Arvinas Collaborates with Merck &
Oxea Extends European Distribution
Chemical Industry Security Lag Said
Co. on Novel Therapeutics
Pact With IMCD
to Put US at Risk
Private US biotechnology company Merck-related research. In addition, German-based chemical group success in expanding its customer The slow implementation of the the Chemical Facility Anti-Terrorism Arvinas has announced a multi-year Arvinas could earn up to $434 mil- Oxea has expanded its European base over the past two years, said Chemical Facility Anti-Terrorism Standards (CFATS), the study's au- collaboration with Merck & Co. to lion if all targets, initially selected distribution agreement fir amines the company's European Marketing Standards (CFATS) in the US as part thors say very few chemical facili- create novel therapeutics using its by Merck & Co., are met, as well as with Dutch distributor IMCD. At Manager Michael Harbich. ICMD of homeland security and anti-ter- ties have actually implemented the PROTAC (proteolysis-targeting chi- tiered royalties.
the beginning of April, IMCD began market manager Stephen Rosenthal rorism measures is leaving chemical security measures.
meras) technology.
The partnership will encompass distributing Oxea's TCD diamine, a said the extended distribution pact plants vulnerable and putting the The researchers urge the indus- PROTACs are bifunctional small multiple disease targets across sev- high performance epoxy hardener with Oxea will strengthen his com- population at risk, a study published try and DHS to work more closely molecules that target proteins for eral therapeutic areas. Merck & Co. for specialty adhesives and surface pany's portfolio and enable it to in the International Journal of Criti- together "before it is too late to en- degradation and removal from a may also, at its discretion, decide to cover the special formulation needs cal Infrastructures suggests.
sure the safety and security of the cell. This is in contrast to more tra- expand the collaboration to include The decision to continue the part- of customers in the European coat- Although the Department of US population." With almost 1 mil- ditional drug development that is additional diseases.
nership with IMCD reflects Oxea's ings and adhesives sectors. (dw) ▪ Homeland Security (DHS), estab- lion direct employees, the US chemi- based on inhibiting proteins.
Arvinas said only 25% of the lished after the terrorist incidents cal sector sustains an additional 5.5 Financial details of the collabo- body's 20,000 proteins can be of Sept. 11, 2001, was charged with million jobs in other sectors. It is ration were not revealed, however drugged by traditional methods, regulating the safety and security also represents 2 % of GDP — based Arvinas will receive an up-front leaving the remainder as potential Residues of Glyphosate Found in
of chemical facilities and in 2007 on 2009 figures — and is the na- payment and funding to support targets for PROTACs. (eb) added an interim final rule, called tion's biggest exporter. (dw) Food and Body Fluids
Private labs in the US are said to laboratory detected the chemical in BASF Trials MDI Precursor
have found significant residues of three of 18 breast milk samples and Shintech Going Ahead With
the glyphosate weed-killer, mar- in six of 40 infant formula samples.
Production at Chongqing
keted by Monsanto as Roundup, in Although testing has increased $1.4 billion US Gas Cracker
samples of honey, soy sauce, infant over the past two years, US lab oper- BASF has begun trial operations at for the entire project are pegged at formula and even breast milk and ators are quoted as saying requests Shintech, US subsidiary of Japa- billion facility,is expected to begin its 400,000 t/y mononitrobenzene €860 million. The site will also pro- have skyrocketed since the end of nese PVC producer Shin-Etsu, said shortly. Construction is being han- plant at Chongqing, in western duce 300,000 t/y of aniline, 400,000 Tests by the Abraxis lab found March, when the French-based WHO it plans to start up a 500,000 t/y eth- dled by Toyo Engineering Corpora- China. The new facility will feed the t/y of crude MDI and will also have glyphosate residues in 41 of 69 research unit IARC announced plans ylene gas-fed cracker at Plaquem- tion, and Lummus Technology US group's integrated MDI complex at an MDI splitter with a capacity of honey samples and in 10 of 28 soy to classify glyphosate as "probably ine, Louisiana in the second quarter will provide the ethylene process the same location. Investment costs 400,000 t/y. (dw) sauces, while tests by the Microbe carcinogenic to humans." (dw) of 2018. Construction on the $1.4 technologies. (dw) + + + Find all content of this issue plus latest market news on + + +
CHeManager International 5/2015 Reinventing Sustainable Value Creation
Why the Chemical Industry Must Decouple Economic Growth from Ecological Footprint
In the last several years, we have Our sustainability strategy summa- value chain from raw materials to witnessed global trends that are rizes the objective of every business disposal on the one axis and all six to achieve more value with fewer re- focal areas of sustainability from changing the way global chemi- sources and therefore demonstrates performance to waste on the other cal companies operate. These trends that sustainability is a critical factor axis. That makes it very convenient include a consolidation of suppliers, to be competitive. to check which field makes the big-gest difference when improved. manufacturers and buyers; the shift Driving Sustainability along the Value Chain
The Henkel Sustainability#Master of growth to emerging markets and serves as a communication tool. highe r market volatility with faster Creating more value can be achieved The Marketing and Sales teams fill through our partners, our products it with specific product information transfer of information. But these and our people. Only by joining forc- and adapt it to suit each specific re- trends are not the only developments es can leading chemical companies gional market. It is also widely used having an impact on our business. drive sustainability along the value as a presentation tool in dialogue chain. That's why we have been de- with retail partners, non-govern- veloping innovative solutions and mental organizations, research in- setting new standards together with stitutions and other stakeholders.
our partners to manage complexity and risk in our global value chains. For example, in 2011, we and five other companies in the chemical Finally, every company in the in- industry established the "Together dustry must engage its employees for Sustainability" initiative (TfS) to around the same sustainable goals Prof. Thomas Müller-Kirschbaum, Henkel
harmonize the increasingly complex to create value globally. Our shared Michael Flippo -
supply chain management processes vision and our corporate values are and to optimize the dialogue among what unites us worldwide to create The acceleration in global economic business partners worldwide. At the for the value chain. We are com- laundry and home-care solutions of ity strategy, i. e. performance, social more value and build our success. activity and continued population heart of the initiative is the idea that mitted to zero net deforestation by the future in the "Henkel Innovation progress, safety and health, energy If we want to achieve our goal for growth are putting immense pres- "an audit for one is an audit for all." 2020. Therefore, the palm and palm Campus for Advanced Sustainable and climate, water and wastewater 2030, we need everyone to contrib- sure on our planet's resources. In With TfS, suppliers only need to pass kernel oil that we use should not Technologies" (HICAST). as well as materials and waste. ute. That's why we strive to give our this context, we, as an industry, one assessment or audit performed contribute to deforestation of prima- The cooperation has three objec- These focal areas summarize employees a clear understanding of must address the relationship bet- by independent experts. 1,100 au- ry or secondary forests with signifi- tives: to find new sustainable feed- the main challenges of sustainable sustainability and enable them to ween economic growth and re- dits and assessments were carried cant ecological value. We are work- stocks that can be used as raw ma- development as they relate to our convey the importance of sustain- source consumption. Can we grow out under the TfS initiative at our ing with our partners to establish terials in our products, create high- operations. The idea is to start with ability to others. Our Sustainability despite the sustainability challenges suppliers last year and 90% of the full traceability of palm and palm performing ingredients and exploit a qualitative assessment of the sus- Ambassador program was launched that we face? The answer is ‘yes' suppliers who underwent a repeat kernel oils used in ingredients for unknown synergies between new tainability contribution at the very in 2012 to engage employees more but we need to become more effi- audit had improved their sustain- our products, such as surfactants, and existing washing agents. The beginning of every research project deeply on the topic of sustainability. cient, i.e. create more value with a ability performance. In 2014, the by 2020. unique advantage lies in the seam- and turn it into a quantitative evalu- Since then, Henkel has trained more smaller footprint. We cannot afford initiative turned its focus toward We are providing targeted sup- less cross-disciplinary cooperation ation, which ends with a life cycle than 3,800 Sustainability Ambassa- to pursue economic growth alone. emerging markets, particularly port to plantations and smallholders of four professors and their research analysis (LCA) for the final product. dors — including all Management The chemical industry, in particular, those in Asia. The intention is to ac- in palm-growing countries to pro- teams specialized in process tech- This year, we reinvented the ap- Board members — in 70 countries. has already done a lot to decouple tively involve suppliers in sustain- mote sustainable farming practices, nology, biotechnology, as well as proach by integrating the planned Since the start of the program, the growth from footprint but there still ability assessment processes and improve livelihoods and ensure that physical and polymer chemistry. sustainability contribution into the Sustainability Ambassadors have is some way to go. We can and must sufficient volumes of sustainable oil We expect game-changing in- briefing phase of the new product educated about 36,000 children in are available on the market. After novations, which will significantly development.
Incentivizing Suppliers to
developing our first smallholder contribute to better performance, In summary, the industry has a Vision 2050
Develop Sustainable Solutions
project with NGO partners in Latin resource use efficiency and preser- very important role to play in de- America, we have recently signed a vation of the climate, from the co- coupling growth from footprint if Creating value in this new reality re- We need to incentivize our suppli- second project in South East Asia. Innovation will reinvent the indus- we want the world population to quires a clear vision and transpar- ers to develop new innovative and try's contribution to a more sustain- live well by 2050. We have to face ent goals. At Henkel, we are working sustainable solutions. At Henkel, Industry – Academia Collaboration
Revolutionizing Product Development
able world. It starts with the identi- our responsibilities and reinvent with Vision 2050 developed by the we work with strategic suppliers on fication of sustainability "hot spots" sustainable value creation wherever World Business Council for Sustain- process optimization, resource ef- Creating superior value also means Based on internal innovation and for each product or category. These possible. And for us, sustainability able Development (WBCSD). The vi- ficiency, environmental and social that the businesses and the academ- our partners´ support, our pro- are areas where a particular pro- is not only a responsibility but also sion states: "In 2050, 9 billion peo- standards, as well as innovation. In ic community must come together to ducts must deliver more value at a duct can have a very significant posi- a great opportunity to continuous- ple live well and within the resource addition, we have been recognizing tive impact — when designed in the ly improve and to strengthen our limits of the planet." strategic supply chain partners that right way. Unfortunately, there are competitiveness. Sustainability has This vision is the basis for our make the biggest contribution to not many tools available to monitor already become a key differentiator strategy of "achieving more with sustainability for each of our three a company´s product portfolio, espe- for business success. Sustainability is a critical
less." We need to create more value business units since 2011. BASF, cially for small and medium-sized — for our customers and consum- Croda, Evonik, Monosol, Novozymes factor to be competitive.
Prof. Thomas Müller-Kirschbaum,
ers, for the communities we operate and Solvay are among the strate- That's what motivated us to cre- corporate senior vice president of
in, and for our company — while re- gic partners that have received an ate the "Sustainability#Master" to Research & Development, Laun-
ducing our environmental footprint. award for their outstanding contri- systematically measure and con- dry & Home Care, co-chair of the
By 2030, we want to triple the bution. work on innovative sustainable solu- reduced ecological footprint. That's tinuously improve a product's sus- Sustainability Council, Henkel,
value we create through our busi- Partnership should not be limited tions. This partnership is extremely why we systematically integrated tainability performance. It consoli- ness operations in relation to the to cooperation between a company important for Henkel and that's our sustainability strategy into the dates information from life cycle environmental footprint of our and its own suppliers. We, as an in- why we started a cooperation with innovation process in 2008. Each analyses, stakeholder feedback and products and services. We summa- dustry, should make all efforts to the Technical University (RWTH) in new product has to demonstrate a external product requirements. At rize this ambition to become three safeguard existing, and create new Aachen, Germany. There, we are specific advantage with regard to the heart of the system is a matrix times more efficient as "Factor 3." sustainable renewable feedstocks researching and developing the the focal areas of our sustainabil- with 36 fields mapping the entire Emerald Kalama Enters Distribution
Omni-Chem136 Adds Harke Group
ExxonMobil President Says
Agreement with BCD and Caldic
as New European Member
Bureaucracy Strangling LNG Exports
Emerald Kalama Chemical, a busi- able and REACh-registered. In addi- Omni-Chem136, the world's larg- throughout Europe, Harke Group The US is at risk of losing economic "LNG exports can provide the ness of Emerald Performance Ma- tion, they enhance key performance est alliance of regional independ- opens industrial sourcing and sales opportunity and the ability to so- spur to further increase America's terials, has made key new distribu- features, such as film formation, ent chemical distributors with 18 markets for its customers and sup- lidify its role as a global leader in natural gas production, providing tion appointments for the K-Flex adhesion, processing characteristics member companies in North Amer- pliers in Europe and around the energy production if policymakers all the attendant benefits that would platform of fast fusing plasticizers and resistance of the end-product to ica, South America and Europe, world. The product portfolio of the do not quickly move to approve liq- generate," the executive said.
and low-VOC coalescents. BCD Che- oil, grease and water.
more than 145 facilities and $3.0 B group includes industrial, specialty uefied natural gas (LNG) exports, ExxonMobil is currently engaged mie will service the DACH region "Emerald continues to build its of combined sales has announced and high purity chemicals, plas- Rob Franklin, president of Exx- in a $10 billion project to convert (Germany, Austria and Switzer- infrastructure in the EMEA region that Harke Group of Germany has tic additives, plastic raw materials onMobil Gas & Power Marketing the LNG regasification terminal at land), while Caldic Spécialités will in response to demand for more joined the alliance effective Feb- and plastic products, high qual- Company, said in a speech at the Golden Pass, Texas, into an LNG ex- manage K-FLEX distribution in environmentally friendly materials ruary 1, 2015. Harke Group, head- ity pharmaceutical excipients, food Johns Hopkins School of Advanced port terminal. An application to ex- that deliver the performance that quartered at Mülheim an der Ruhr, additives and ingredients, dietary International Studies in Washing- port to non-Free Trade Agreement K-Flex products are utilized as manufacturers need," said Hans Germany, is a wholly owned private supplements and ingredients for ton DC.
countries was submitted to federal effective plasticizers in adhesives, Dick Terhenne, K-Flex business di- the personal care and clean care With bureaucracy stalling legisla- officials more than two years ago, PVC plastisols and compounds, rector for EMEA.
"The addition of Harke Group to industries. In addition, Harke Group tion and issuance of export permits, but no decision has been made.
caulks, sealants and other latex Emerald Performance Materi- our alliance is another significant offers related services such as con- the US role as world's leading en- As global LNG demand is ex- polymer applications, as well as als had been an affiliated portfolio step forward in our strategy to build tract packing, mixing and blending, ergy producer is at stake, Franklin pected to triple between 2010 and coalescents in paints, coatings, inks company of Sun Capital Partners a global chemical distribution alli- legal consulting and representative added. In his view, exports of LNG 2040, the amount of incremental gas and graphic arts. The products are since 2006 and, in August of 2014 ance", says Fred A. Buehler, Manag- services concerning EU chemical "should be treated no differently needed to meet global demand by known as environmentally friendly changed hands to become an affili- ing Director Omni-Chem136. (REACH), pharmaceutical and food from other exports such as agricul- 2025 will be almost double the size specialty plasticizers and coales- ate of private equity firm American As an international distributor legislation. (mr) tural goods, automobiles and com- of the entire US gas market today. cents: low-VOC, readily biodegrad- Securities. (mr) with subsidiaries and sales offices puter products.
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CHeManager International 5/2015 Roles Under REACh
REACh Demands that Competitors Work Closely Together — Certain Tasks Still Challenge Industry
Almost eight years have entrants to participate in a joint transported isolated intermediate. passed since ReaCh went submission causes extra costs, if This was less expensive for the sin- this was not considered before the gle company but not for the benefit into effect, but some prob- signature procedure in consortia of ECHA as it originally demanded lems remain in regard to joint submis- agreements. Now there may be a "one substance, one registration" sions. The cooperation of members need to involve lawyers again to and now has to examine several create or check the letter of access dossiers for the same substance.
within consortia is arranged by con- contracts and also do necessary tracts that in most cases were signed adaptations in already existing Special Arrangements for Small and
after the preregistration period in the consortia agreements to cover the Medium Enterprises (SMEs)
needs of late entrants appropriately. end of 2008 and previous to the first Cost-sharing needs to be discussed Small and medium enterprises can registration deadline in 2010.
again and agreed on in consortia by pay lower fees to ECHA if they have respecting the rule that cost-sharing proof of not being a large company. has to be done in a fair, transparent ECHA also had the idea that small and nondiscriminatory way. Calcu- and medium enterprises shall bene- lations in regard to splitting of the fit from lower costs within consortia. costs and eventual refunding to all If a consortium is willing to consider former members is extremely time- the company size of its members, consuming and causes an increase that will lead to additional work to of consortium-management costs.
calculate costs for each member of To save costs, consortia often the consortium. Furthermore, there Dr. Susanne Kamptmann, Steinen
agree on doing the refunding pro- remains the question whose obliga- cedure only twice instead of a yearly tion it is to double-check whether As time was running toward the recalculation. It seemed sensible to a company may benefit from SME first deadline, the contracts signed do that for the first time after the status and what needs to be done before this deadline did not cover 2013 deadline, and it was common when there is a change in a com- all important aspects in regard to sense to do the second refund after pany's status. As the competition data sharing and late(r) entrants, the 2018 deadline. In general each law always needs to be respected, therefore consortia also have to member of the joint submission will psdesign1 - F
it seems necessary to have an inde- find solutions to cover the needs of be pleased to have a refund, but pendently acting trustee (e. g., a con- future registrants. Cost-sharing is it is useful to reconsider whether under which no refunds will be is no contractual basis for that at costs for further studies and tests, sultant or a lawyer) who does the an important topic, as it needs to be a refund shall be done only when this stage of the registration process. and also for the tasks that need to calculation and invoicing for each done in a fair, transparent and non- there is a considerable sum to be Therefore the willingness of prereg- be done by the lead company for the single member of a consortium.
discriminatory way, but the REACh refunded. If only a few hundred eu- The Unpopular Role of the
istrants to become SIEF formation benefit of the registrant-to-be.
A small company with few sub- (Registration, Evaluation, Authoriza- ros need to be refunded, the time SIEF Formation Facilitator
facilitators has decreased over the The second option is to transfer stances to register even when a tion and Restriction of Chemicals) needed for transferring the money last eight years. the role of the lead company to the higher volume band is required may regulation itself does not define how from a consortium account to the The European Chemicals Agency In particular, for substances that registrant-to-be with the highest have less total cost than a larger this may be achieved in practice.
members of the consortium and (ECHA) demands Substance Infor- are manufactured in smaller volumes data requirements. In this case, the company that has to cover the regis- also the double-checking of calcu- mation Exchange Forum (SIEF) sur- by the group of the preregistrants former lead company may be inter- tration of hundreds of small-volume Covering the Needs of Late Entrants
lations and the bookkeeping within veys done by a SIEF formation facili- and that did not have a registra- ested in having a compensation for substances on its own. Therefore the member companies will exceed tator, but usually the efforts of the tion deadline in 2010, the originally the work it had already done. The some may question whether it is Creating contractual documents the profit. Therefore many consortia company having this workload will foreseen procedure was amended situation will become really difficult fair to make a distinction between for a letter of access to enable late have agreed on a minimum amount not be compensated, because there by industry. If a company could ful- if there are already further regis- small and large companies in regard fill all data requirements on its own, trants whose rights also have to be to consortium costs.
it started by registering on its own An easier approach to share costs and then offered a letter of access to To avoid all the discussions in re- is to do it based on the type of regis- the other pre-SIEF members. Neither gard to financial issues and further tration and connected data require- the REACh regulation nor ECHA in- contracts in these two options, a ments. As for the registration of a tended this, but it often kept costs low third option can be considered. The transported isolated intermediate for all involved parties.
registrant-to-be with higher data above 1,000 tons per year, a reg-requirements may prepare an own istrant has to fulfill the same data How to Cope with Registrants-to-Be that
registration dossier and either opt requirements as a registrant for a Have Higher Data Requirements than the
out, or — if agreed on in the pre- standard registration in the smallest Former Lead Company
SIEF — the pre-SIEF could be split tonnage band of up to 10 tons per into two groups: a registration group year. (Remark: In both cases, data IN 3 CLICKS!
Difficulties may arise when a lead for a transported isolated interme- requirements in accordance with company registers with fewer data diate only and another group for Annex VII of the REACh regulation requirements (e. g., registration for those that require a standard reg- have to be fulfilled.) It seems to be a transported isolated intermediate istration. The registrant-to-be then fair, transparent and nondiscrimina- • Follow this link:
only), but later a further registrant- can become the lead company for tory that costs for these two types of to-be needs to register with higher the standard registration group.
registration shall be the same.
data requirements (e. g., standard registration in a lower tonnage Opt Out because Participation in a Joint
Dr. Susanne Kamptmann,
Register with few personal details
band). In such a case there are three Submission is too Expensive
ways to solve the problem, but each of them will require at least some Management of consortia is time- 2 [email protected] Confi rm Double-Opt-in email
discussions and a sort of agreement consuming and often has high costs within the group of the registrants — sometimes it is even more ex- . and with a little luck
pensive than the studies and tests win a trip to Wiley‘s hometown
The first possibility to solve the needed to prepare the registration New York!
issue is that the lead company up- dossier for a certain substance. This is the final of a series of four articles dates the registration dossier to That already has led to an increas- from Dr. Kamptmann on the REACh legis- cover the needs of the registrant-to- ing number of opt-outs in particu- lation. Parts 1, 2 and 3 were published in be. One of the most important tasks lar by companies that registered issue 11-12/2014, 1-2/2015 and 3-4/2015 will be to define who will bear the in a smaller tonnage band or for a of CHEManager International.
EU Authorizes 17 GMOs for Food and Feed
Hot on the heels of its proposal to The GMOs approved today had re- The GM food and feed authoriza- permit member states to reject the ceived "no opinion" votes from mem- tions will be added to the existing import of genetically modified crops ber states in both the Standing and list of 58 GMOs authorized in the Joshua Haviv - for food and feed, the European Appeal Committees, as no qualified EU for food and feed uses (cover- Commission has authorized 10 new majority had been reached either in ing maize, cotton, soybean, oilseed GMOs for this purpose, renewed favor or against the import. Authori- rape, sugar beet) and are valid for seven existing authorizations and zations had not been granted during allowed the importation of two GMO the past months while a review of the Any products made from these Register for our newsletter today
and support our data protection drive!
cut flowers.
decision-making procedure on GMO GMOs will be subject to the EU's In a statement, the Commission — announced on Apr. 2 — was in pro- labelling and traceability rules. All All participants will be entered in a Prize Draw
pointed out that the products all had gress, the EU regulatory agency said.
but one of the food and feed prod- for a 5-Day Trip to New York worth EUR 2,500.-
gone through a full authorization Until the new proposal is adopted ucts is manufactured by GMO giant Getting to New York has never been so easy!
procedure, including a favorable by Parliament and Council, the au- Monsanto. One, a cotton product, is * All Newsletter readers above the age of 18 may participate with the exception of Wiley employees and their dependants. The judges‘ decision is fi nal. scientific assessment by the Euro- thorization process will continue to made by Bayer.
Closing date is 31st October 2015. The voucher cannot be exchanged for cash. Your data will not be disclosed to third parties. Cancellation of the News-letter is possible at any time.
pean Food Safety Authority (EFSA). be based on the current applicable The cut flowers, carnations, are The permits do not extend to crop legislative framework, the Commis- manufactured by an Australian sion pointed out.
company, Florigene. (dw) + + + Find all content of this issue plus latest market news on + + +
Frankfurt am Main · 15 – 19 June 2015 Please visit us: Hall 6.1/5.1 Booth B8
Meeting Point of Industrial Biotechnology
Production Industrial Water Management
By Reducing Its Thirst for Water the Process Industry can Conserve Resources and Cut Cost
How well does industry man- age water resources? The general tendency today is to take a holistic systems approach. More process water is being recirculated and industrial producers are recovering re-usable substances and water treatment chemicals. Companies are also taking a new approach to effluent manage-ment. Partial flows are being diverted at an early stage, making treatment easier and less expensive. Technology is even available which can virtually eliminate effluent.
Plants, animals and humans depend treatment is relatively inexpensive. However treatment of the residual water management research project match reverse osmosis technology, The French startup Magpie Poly- on water for survival, but water is Experts say that water recycling concentrates is problematic. Choos- in the chemical industry, a number reports Sulzer.
mers has developed a highly effi- also an essential technical resource is less efficient for waste streams ing a site with an abundant supply of plants in Belgium, France, Hol- Sea water is not the only option. cient filtration method for captur- for industry — whether as cooling that are highly contaminated and/ of water and implementation of an land and Spain are working in uni- Desalinated ground water is another ing re-usable precious metals even agent, transport medium, solvent or or contain substances that have a industrial water management pro- son to significantly reduce fresh wa- potential source, for example in the if they are only present in minute process water in a range of qualities very diverse range of chemical and gram are generally preferable to the ter consumption. At Solvic and Dow dry American South, claims GTAI amounts. Various filters made of from industrial water to softened or physical properties. The basic pre- burdens associated with zero liquid Benelux, water flows from different (Germany Trade & Invest). Texas, polymer beads are installed, and demineralized water to highly puri- requisite for water recycling is the discharge production which is very plants are joined together. Treated Florida and California are leading the metals form selective bonds with fied water for the pharmaceutical establishment of an efficient water energy intensive. As a result, experts effluent from one plant is used as users of the technology. Seawater the beads. The technique is already management system to separate are pinning their hopes on tighter feed water for another plant. The desalination is becoming an increas- being deployed at several European Industrial water consumption is water that readily lends itself to re- integration of water and energy goal is to reduce fresh water con- ingly significant factor, particularly not free. Inlet water normally needs cycling from water that is less suit- sumption by up to 50%.
in California where megaprojects The chemical group Lanxess also to be conditioned, and treatment able. Most of these internal recycling Bayer Technology Services has are in the planning pipeline. De- provides technology for recovering costs money. Circulation pumps con- processes are located at or near the developed a process for handling Membrane Process:
mand for high-efficiency pumps and re-usable materials. Ion exchangers sume energy. Post-treatment is also source where the complexity of the effluent which contains organic Learning from Mother Nature
rugged membranes continues to in- function as selective adsorbers for normally required so that the water constituents is limited and additive matter as well as inorganic salts at crease. Financing for many projects fine purification of wastewater flows can be re-circulated or discharged techniques can be deployed with an Indian pharmaceutical plant. The The use of membranes in water is now provided by public-private and process electrolytes. Heavy met- into receiving watercourses. For minimum effort and expense.
new stand-alone treatment process treatment technology has been on als and other substances such as cost and environmental reasons, it The integrated energy supplier has three stages: the organic mat- the increase for many years. There Jim Taft, Executive Director of the boric acid, chromate, arsenate, fluo- is advantageous to reduce water Suncor Energy recycles more than ter is removed by biological purifi- are good reasons why that is the Association of State Drinking Water ride and ammonia in salt solutions movement, water heating and wa- 90% of the water contained in steam cation and the salt concentration is Administrators (ASDWA), says that can be selectively captured.
ter contamination, and this is where which the company uses to extract increased through reverse osmosis ▪ Membranes run continuously and mobile desalination systems have Little use has been made so far industrial water management has a oil from oil sand. Instead of storing to minimize energy consumption in are fully automatic.
very significant potential. Demand of wastewater as a heat source. role to play.
injection steam in underground dis- the subsequent evaporation stage.
▪ Membrane materials are now is likely to increase because these In the past, utilization of this en- Technological complexity is lower posal wells, recycled saline water is Veolia Italy has developed a cheaper and more effective.
systems in the South could help the ergy was seldom possible, one of in regions where there is an abun- treated, the salts and solids are fil- zero liquid discharge system for a ▪ The membranes operate at lower water industry to manage more fre- the constraining factors being the dance of water compared to parts tered out and the water is reused to global manufacturer of dispersions pressure and that reduces energy quent periods of drought or tempo- 65 °C flow temperature limit for of the world where water is scarce. produce steam again.
and adhesives that can treat 15 t/d rary supply shortages.
heat pumps. Ochsner now markets The costs of closed-loop recircula- What Wabag is currently doing is of wastewater. In the first stage, a Some membrane system suppli- high-temperature heat pumps with tion or even water-free production another example. At the beginning heat pump vacuum evaporator with More than 2/3 of new desalination ers have now started to standard- flow temperatures up to 100 °C, are more acceptable there than in of 2014, the company was awarded forced circulation pre-concentrates capacity being installed worldwide ize their systems. Higher production opening the door to totally new in- countries like Germany. Whatever a contract to build a wastewater the rinsing water. A vacuum evapo- is now based on reverse osmosis. In volumes drive down the manufac- dustrial and commercial heat pump the water supply situation, produc- treatment plant at the new indus- rator with heat pump and scraper contrast to traditional evaporation- turing costs for these plug-and-play tion and water technology are al- trial park in the city of Al Kharj in system in the boiling chamber then based technologies, no heat energy solutions which are used to purify ways closely interrelated, creating Saudi Arabia. Effluent from various produces a final concentrate which is needed for this technology and service water and drinking water Smart Use of Water
the need for integrative technologies production facilities at the site will is mixed with fresh dispersion to ob- thus the cost of desalinated water and also for treatment of industrial and water management systems.
be treated to the maximum extent tain a constant density. The distillate is reduced. Even in regions where wastewater. It takes minimal effort Resource conservation and economic possible for re-use as process wa- is treated for use in washing, reduc- energy costs are relatively low such to connect the pre-assembled sys- considerations make it imperative Water Recycling and Elimination
ter. The plant will have a capacity ing the wastewater volume to zero. as the Middle East, reverse osmo- to make intelligent use of industrial of Production Effluent
of 10,000m3/d.
What used to be a waste pro duct sis is increasingly the solution of process water and to consume as that was sent for disposal is now choice. Given the right plant de- Recovery of Energy and Re-usable Materials
little as possible. Water should not „Off-the-shelf" industrial water Zero Liquid Discharge
re-used in the production process.
sign and the right equipment (60% be transported, heated or contami- management does not exist. That is the Model for the Future?
As part of the EU E4Water Pro- of total energy consumption is used When there is direct contact, it is nated more than is absolutely neces- the conclusion reached in a Process- ject, currently the world's largest to power the pumps), nothing can impossible to prevent production sary to meet process needs. Water Net position paper on the trends and Instead of purifying water to the materials from contaminating the re-circulation and re-use are two outlook in industrial water techno- extent possible prior to discharge, process water. As a result, the pro- crucial aspects of "smart water".
logy, which was published in March would it make more sense to elimi- cess water contains varying concen- The article is based on a trend report commissioned by Dechema and written by internatio- 2014. Tailored strategies are needed nate water discharge altogether? trations of contaminants (ranging Dechema Gesellschaft für
nal trade journalists. Industrial water management will be one of three focal topics at Achema for the specific industry, application Elimination of effluent from pro- from a few ppb to several %). If a Chemische Technik und Biotech-
2015 on 15 – 19 June 2015 in Frankfurt, Germany. The world forum and leading trade show and site. Water recycling based on duction (zero liquid discharge) is substance can be re-used, recovery nologie e.V., Frankfurt am Main,
for the process industry brings together experts from a wide range of disciplines, institutions recirculation of process water is currently the subject of a highly can make economic sense in addi- and generations to stimulate scientific exchange in chemical engineering, process enginee- normally only a viable option if con- controversial debate. 400 plants are tion to helping protect the environ- ring and biotechnology. Dechema is globally known as the organizer of Achema.
tamination levels are low and water already operating around the world. A. Schulman to Build Masterbatch
Solvay Building Korean
IDT Opens Molecular Biology R&D
Plant in Turkey
Plant for Tire-grade Silica
Facility in Redwood City
US plastic compounds and resins breathable masterbatches for food Solvay has broken ground at Gun- allow for higher productivity and Integrated DNA Technologies (IDT) manufacturing capability. The new company A. Schulman is planning and industrial packaging customers san, South Korea, for a Highly Dis- greater flexibility in producing en- is capitalizing on its expertise to R&D center of excellence keeps IDT to build a new masterbatch plant in in Turkey as well as countries in the persible Silica (HDS) plant that it ergy saving passenger car and truck deliver a broader range of vali- on the cutting edge of innovation Turkey, leasing existing industrial Middle East and North Africa.
says will develop innovative HDS tire compounds.
dated molecular biology products. in molecular biology applications, facilities in the greater Istanbul Heinrich Lingnau, vice presi- grades and address growing de- With the new production plat- Research and development for particularly qPCR, next generation dent and general manager Europe, mand in Asia for energy saving tires.
form dedicated to silica innovations these products will now be per- sequencing (NGS), and synthetic The cost of the plant, expected to Middle East, Africa (EMEA), said The plant with an annual capac- for Asia and the silica research fa- formed in a newly built facility in bio logy (SynBio).
go on stream by the end of the com- the company will be "ideally posi- ity of more than 80,000 t/y is ex- cility that belongs to Solvay's new Redwood City, California/USA. The To lead Redwood City's Product pany's 2016 fiscal year, is estimated tioned to participate more fully in pected to be operational within the R&I Center at the Ehwa University building houses state-of-the-art Development Team, IDT announced at €5-7 million.
the accelerating growth occurring next two years.
Campus in Seoul, the company in- labs that will allow the scientists that Dr Caifu Chen has joined the The facility will produce about 40 throughout Turkey and other coun- The advanced grades produced tends to speed up innovations in of the manufacturer of custom nu- company as Senior Vice President million lbs/y (18,000 t/y) of A. Schul- tries in the Middle East and North at the Korean site by Solvay's global close cooperation with its regional cleic acid synthesis to maximize for Research and Development. man's premium additive, white and business unit Silica is reported to customers." (dw) the company's oligonucleotide (mr) + + + Find all content of this issue plus latest market news on + + +
CHeManager International 5/2015 New Challenges in Chemical Purification
Ion Exchange Resins Lead the Way to Comply with High EU Standards
Purification of chemical compounds has become a vital part of most in- Lactose, one of the best-known kentoh -
dustrial processes. Germany, with some of the tightest chemical sector products for its use in the food and beverage and pharmaceutical in- regulations in europe, has seen ion exchange (IX) resins become the dustries, is treated through a com- leading methodology to remove trace contaminants because of how the resins bination of methods. First, lactose selectively, efficiently and flexibly conduct their mission. Dow Water & Process can be isolated from whey proteins using ultrafiltration. Then it can be Solutions has developed a special portfolio of ion exchange resin products that purified through combinations of purify compounds in a broad range of industrial applications including the pro- nanofiltration, ion exchange and duction of biodiesel, caustic soda or lactose.
Some of the most successful products for lactose demineraliza- Since ancient times, people have Treaty signed in 1993. In addition, tion are the resins Amberlite FPC16 purified chemical compounds to Germany approved its own Law of Na and Amberlite FPA42 Cl. While improve quality of life. The first at- Chemicals in 1980, which obligates the latter is a strong base anion tempts to filter water as a means to companies to register their chemi- resin offering a high yield solution, purify it were made by Hippocrates cal compounds in a database that the former is a gel cation resin with to treat his patients in the fourth explains the substances and their high osmotic stability. Completing century B.C. During the industrial properties.
the pair is Amberlite FPA55, an revolution, purification started as- It is clear, therefore, that tailored acrylic weak base anion resin with suming a major role and, as a result, solutions are needed to adapt to a an excellent physical stability. Fi- over the years, related regulation complex regulatory environment. nally, Dowex Monosphere 99K/310 has intensified.
Dow Water & Process Solutions, a is a chromatographic separation In this sense, in Germany, waste- leading filtration, purification and resin designed especially for sweet- water is treated following the high- separation technology supplier, un- ener applications and purification est EU purification standards. In derstands the challenge of achieving of polyols in food and beverage ap- 2006, the Registration, Evaluation the appropriate chemical purity for cal sponges," removing more than On the one hand, IX resins are duce the crude biodiesel needed for and Authorization of Chemicals each application and offers a wide 99% of trace contaminants with an able to remove trace contaminants the manufacture of biodiesel fuels. One of the big advantages that (REACh) regulation established a range of advanced resin solutions ultratight hold. They also have a selectively by matching contaminant However, crude biodiesel must be the aforementioned products of- database in which any company to businesses, consumers, indus- very high exchange capacity, which with resin for a lock-and-key fit. On purified to remove the salts, soaps fer is their efficiency. IX processes manufacturing, marketing, import- tries and municipalities around the allows them to treat effectively the other, they are incorporated in and residual glycerol. Amberlite BD- often concentrate the contaminant ing or using chemical substances world.
many thousands of volumes of wa- modular tanks, enabling an instal- 10Dry is the easiest and most cost- so effectively that the loaded resin must be registered. Also in the in- ter before they need to be replaced. lation to be easily expanded. In this effective product for a successful re presents the smallest possible vol- ternational sphere, companies pro- Ion Exchange Resins
An exceptional selectivity for trace sense, Dow Water & Process Solu- ume of waste, which means that, in ducing organic chemicals must pro- contaminants makes ion exchange tions works side by side with compa- However, it is important to note some applications, they can be re- vide a complete accounting of their Ion exchange resins are particu- the most cost-effective technology to nies to design the purification system that this technology is designed to generated and used for years.
production activities as a result of larly well-suited to purification eliminate these naturally occurring that best meets their specific needs.
be used in a water-free process and At the same time, to achieve the Chemical Weapons Convention requirements. They act as "chemi- and synthetic pollutants.
As a result, ion exchange resins that the polymer beads will swell the highest possible performance, are widely spread in the basic chem- to up to three times their original Dowex ion exchange resins — icals and petrochemicals industries volume as they absorb water. It is backed by more than 60 years of as an economic and effective meth- strongly recommended, therefore, IX manufacturing expertise — have od to separate and purify a large to leave sufficient void space in the been engineered to be the toughest number of different compounds columns.
beads on the market.
or process streams. Moreover, in Another substance that has to All these developments have a some cases, IX is the only techno- pass a purification process is sodi- meeting point in Germany, where logy available that can produce the um hydroxide, also known as caustic Dow Water & Process Solutions has desired levels of purity.
soda. Although it is widely used in several of its facilities. The biggest many industries — more than half plant is in Stade, Lower Saxony, at Products for Which Purification is Vital
of all global production has an in- the Elbe River between Hamburg dustrial use — it is common to find and the North Sea. In recent years Purification treatment based on chloride contaminating sodium hy- it has become renowned for devel- ion exchange resins is essential to droxide when low-chloride caustic oping the best wastewater solu- obtain some of the basic products soda is required. To solve this prob- tions for industrial and residential needed both in industrial applica- lem, the Dowex Retardion 11A8 has purposes, among other application tions and everyday life. Biodiesel, been developed as a unique ampho- for instance, is well-known for being teric ion exchange resin. It features used in most injection pump diesel cation and anion exchange moieties Alexander Lane, commercial
engines but also, depending on the in the same bead, being capable of director for EMEA, Dow Europe,
source of the fatty acids, to signifi- reducing the chloride content of Horge, Switzerland
cantly dissolve crude oil in industrial concentrated caustic soda. After the process, regeneration is achieved Base catalyzed trans-esterifica- by applying only hot and deionized The Stade, Lower Saxony, plant of Dow Water & Process Solutions at the Elbe River between Hamburg and the North Sea.
tion is the preferred method to pro- South African Analytical Lab Optimizes Pipetting
Regen Waters, an accredited analytical laboratory based in Witbank, in the human error, such as reading errors ferred settings are saved and subse- such as mixing ratios, serial dosing, Essential liquid properties are taken South african province of Mpumalanga, has been performing chemical for example or inaccurate pre-con- quently accessed at the touch of a dilutions or even reverse pipetting into account in the pre-stored and figurations of the pipette.
button. Frequently used parameters, modes, can thus be quickly applied. editable categories of liquids for and bacteriological analyses since 1986. areas of application include Thanks to the intuitive opera- aqueous, volatile and viscous fluids, among others organic analyses of contaminated soil and water as well as compre- tion via touch screen, the technical which helps dispensing also fluids hensive inorganic analysis. The laboratory also maintains and operates wastewater staff at Regen Waters can program that are challenging and pipetted time-efficient, even complicated pi- with difficulty.
treatment plants for the industrial sector or mining companies. a main focus is petting steps and link them together. Additionally, the memory func- therefore on the study of water samples, which require specific control services The pipetting station combines the tion of the device offers the pos- concerning their chemical and bacteriological quality.
performance of a fully automated sibility of seamless recording of liquid handling platform with the operations that have already been flexibility and affordability of a man- performed. Users at Regen Waters As part of the microbiological tests, In order to reach the best chemical ual solution. Especially in situations have thus access to the date, time the experts identify any impurities. dosage of the water samples, labora- where fluids must be frequently pi- and past pipetting operations. An The procedure is important for sew- tory managers began to search for petted in succession, there is quickly optimal traceability is thus ensured age plant effluent discharges. This instruments that always allow the a risk of fatigue and loss of concen- and frequent repetitions and accu- can effectively help prevent envi- same fluid volume intake and dis- tration. These issues have been tar- rate processes are performed.
ronmental damages that occur be- charge in the shortest possible cy- geted and resolved optimally. Even According to Ludolf Uys, the own- cause of unsuitable water usage or cles, without leading to a high error intermediate steps, such as chang- er of Regen Waters, Microlab 300 is discharge. Thus the water quality is risk for the user.
ing pipettes, are superfluous since an excellent instrument to ensure checked on a regular and defined The semi-automatic pipetting the pipetting station covers a volume accuracy and repeatability in labo- basis, with the view to record, for station Microlab 300 from Hamilton range of 1 µl to 1000 µl.
ratory practice.
example, the effectiveness of plant Bonaduz was able to fully meet the requirements of the laboratory. A Simple Handling Leads
fast and especially secure handling to Effective Workflows
2 Monika Alder Novotni, Pipetting Stations Reduce Error Rate
of the liquids is necessary to obtain product manager Laboratory Products and record accurate results. Mi- Thanks to the so-called "wizards", Hamilton Bonaduz AG, Bonaduz, Switzerland Modern laboratory equipment is a crolab 300 offers features that sig- users at Regen Waters are also of- must have to ensure reliable studies. nificantly reduce the occurrence of fered higher levels of flexibility. Pre- + + + Find all content of this issue plus latest market news on + + +
CHeManager International 5/2015 Quality and Efficiency in Pharma Manufacturing
Part 2: PAT Can Turn Batch Processes into Continuous Processes
An investment in process The pharmaceutical industry is analytical technology (PaT) known for high-tech research and development but relatively low-tech is not just a capital invest- manufacturing. PAT technology is ment, but also an investment in hu- changing that. In the past, the heavy man resources and a commitment to R&D focus and strict, validated pro-cesses made it nearly impossible to change fundamental processes. PaT is improve manufacturing processes more than just inline analyzing. as an with optimization tools commonly enabler of Quality by Design (QbD), PaT used in other industries. Started by the U.S. Food and Drug Admin- affects all pharmaceutical workflows, istration to proactively improve the from product development to process productivity of American drugmak- design to process control.
ers, the PAT initiative has become a chance for all manufacturers to add sophisticated technology to The most important aspect of a PAT their process control with the co- implementation is to retrain a com- operation of government authori- pany's culture to approach quality ties, rather than being held back by with a proactive rather than reac- regulations. As the industry adopts tive mindset. To achieve this, cross- PAT, pharmaceutical manufacturers functional, multidisciplinary teams may not be able to afford not to in- are necessary to effect change vest in PAT due to the risk of losing management to devise and imple- ment the new processes that take full advantage of PAT. A success- Making a Batch Process Continuous with PAT
ful PAT implementation requires a RGtimeline -
rethinking and a reorganization of Faced with the pressures of glo- resources. Users should anticipate balization, some pharmaceutical an increased need for statistical manufacturers are answering their content, content uniformity, hard- ous flow of materials that don't need Extrusion is essentially a mix- According to MSD, the HME plat- analysis and more control engineer- challenges with innovation. One of ness and thickness to be adjusted to be stored at a single location. The ing process during which process form can be easily scaled up to pro- ing skills as analyzers are integrated the top five global pharmaceutical should a batch start to veer out of result is smaller requirements for parameters for temperature, mix- duction levels or scale-up can be into production systems. A key suc- manufacturers recently employed spec, thus maintaining quality in clean room space, lower clean room ing and feed rate can be adjusted. eliminated, depending upon prod- cess factor, however, is to bring to- Sipat in a pilot project. Instead of real time and greatly reducing the HVAC energy usage, fewer opera- Extrusion occurs when the mixture uct volume forecasts, because the gether development and production just designing PAT tools into the risk of having to scrap a whole batch tors, and less work-in-process.
is forced under pressure through an extruder used for most of process teams at the earliest stage to ensure tablet-making process, the company orifice in the die. As the extrudate development is essentially the same the buy-in of top managers of these took the bold step of converting a leaves the die, the molten substance size as the one used later in produc- classic batch process into a contin- drops between two chilled rolls, tion. If scale-up is required, CQAs Pharmaceutical manufacturers may
On the technical side, it's impor- uous process using Sipat. The goal causing its temperature to fall below remain the same while process not be able to afford not to invest in PAT
tant to understand that PAT tools was to take an innovative approach its glass-transition temperature and parameters are scaled up to manu- and devices won't simply automate to improve some of the chronic in- due to the risk of losing competitiveness.
form a brittle glass sheet. The sheet facture large batches of extrudate existing processes. Instead, pro- efficiencies inherent in this type of David W. Humphrey, research director Europe, ARC Advisory Group
is then broken into smaller flakes of — up to several thousand kilograms. cesses like manual quality checks process, including high inventory re- glass to make it easier to mill. In the After the successful development are replaced by automated meas- quirements, long changeover times, final steps, the material is milled, and scale-up of a pilot project, MSD urements. This information in real disconnected processes, high pro- at the end of the process. By using Hot Melt Extrusion as a
blended with excipient, and then has now deployed the HME platform time allows the process to be adjust- cess losses and low asset utilization.
PAT tools, company engineers were Continuous Process at MSD
lubricated and compressed into a to additional sites.
ed, but this new flexibility must be The production line applies able to deepen their process un- conventional solid oral dosage form.
built into the process control strat- high-shear wet granulation process derstanding much faster. The scale Extrusion is a process commonly The extruder's screw and barrel Last Word
egy — a challenge that will require technology to produce oral solid of the process equipment used for used to manufacture plastic parts are modular, allowing flexible con- program changes on existing lines, dosages (tablets). The line consists continuous manufacturing in the by forcing molten material through trol of venting, material feed, mix- Quality by Design takes a different or consume development resources of unit operations for granulation, development phase is the same as a die under pressure. Merck Sharp ing, heating and cooling. PAT tools approach to ensure consistent levels when engineering new lines. In ad- drying, milling, blending and com- for commercial production, so the & Dohme Corp. (MSD), a subsidi- (NIR, Raman, ultrasound or UV-VIS of quality by allowing for flexibility dition, production equipment should pression, and is controlled by two company was able to eliminate the ary of Merck & Co., employs a hot- spectroscopy) come into play at the during the manufacturing process. have redundant systems in place in PLCs (SIMATIC S7-300) with WinCC scaling-up process.
melt extruder (HME) in a process moment of extrusion. These devices PAT tools play a crucial role in the the event PAT equipment should fail.
for line visualization. Near-infrared According to the manufacturer, for manufacturing solid oral dos- interface to Sipat software from implementation of QbD by providing (NIR) analyzers measure properties the new continuous process concept ages. This process allows a drug Siemens, allowing CQA deviations the real-time feedback that allows Costs and Risks of Not Investing in PAT
such as moisture, content uniform- was developed within two weeks substance to be stabilized in its (measured here as percent drug operators to keep CQAs in spec by ity and assay, and laser diffraction is and the line was producing tablets amorphous form within a polymer loading [wt/wt]) to be identified in adjusting processes during opera- Making a business case for PAT is employed for particle-size detection.
reliably and with excellent quality matrix, increasing solubility and in real time. If drug-loading predic- tion. At the same time, quality data not straightforward because it is In this application, Sipat software after just six months. The in-line vivo exposure, which is useful when tions are outside of specification, collected during the process can difficult to estimate future returns collects and evaluates multivariate quality checks now make possible the active pharmaceutical ingredi- alarms trigger, immediately acti- take the place of end-of-line QC, from improved quality or the lower product quality information (CQAs), real-time release with significant ent has low solubility. The HME vating a switch gate to divert out- drastically cutting batch release costs of generating less waste. A PAT such as loss on drying or particle- increase in efficiency versus tradi- process combines multiple steps of-spec material to waste. Any CQA times. The many business benefits investment is not just in equipment, size distribution, as well as uni- tional batch methods with end-of- such as mixing, melting, degassing deviations are brought back into line of employing PAT tools are highly but also in people and processes, variate process data such as speed, line QC. Interestingly, the equipment and densification, which increases by adjusting the necessary process so those costs must be amortized torque, temperature and compres- has a substantially smaller footprint efficiency by reducing the number over a longer payback period. ARC sion forces for closed-loop model — requiring only about a tenth of of unit operations. MSD employs David Humphrey, research direc-
re commends taking a holistic view predictive control. Quality param- the space needed by an equivalent PAT tools and Sipat software from tor Europe, ARC Advisory Group,
to the PAT value proposition that eters are shared with a manufac- batch line. The reason is that a batch Siemens, using Fourier-transform This is the second of two articles from David not only considers the initial capital turing execution system (SIMATIC process requires all raw materials near-infrared (FT-NIR) spectros- Humphrey on process analytical technology outlay, but also weighs the costs of IT) that tracks this information for to be stored locally during the batch copy to monitor form change, as- (PAT). Part 1 was published in issue 3-4/2015 organizational change against the real-time release reporting. Sipat al- process. A continuous process, on say and uniformity of the mixed 2 [email protected] of CHEManager International.
long-term benefits.
lows parameters such as moisture the other hand, employs a continu- Siemens
Fig. 1: PAT measures CQAs after each unit operation to ensure in-process quality.
Fig. 2: Using Sipat to turn batch tablet making into a continuous process with savings in space, energy use and waste. (Source: Siemens)
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CHeManager International 5/2015 Intellectual Property in China's Chemical Industry
Companies Will Have to Prevent, Detect and Respond to IP Loss to Access Growing Market
Chemicals are an increasingly the potential infringer. This will help mature industry with a high companies formulate legal strate- gies and choose jurisdiction.
degree of competition. In this Next, any publicly available infor- situation, industry participants need Igor Link - F
mation that can demonstrate a link to consider how to differentiate them- between the original technology and the infringer should be identified. selves and stay ahead of their rivals. Technicians may have carelessly Superior intellectual property is such a disclosed too much about a com- differentiating factor. It allows compa- pany's trade secrets in an academic paper. Or a Chinese media article nies to participate in market segments may have photos of equipment un- with a smaller number of competitors der construction and specifications and higher margins. However, intel- about production capabilities. A sus-pected infringer's website may dis- lectual property is only a differentiat- close product specifications (some- ing factor as long as it is restricted to a times in Chinese language only) that limited number of players.
are helpful in building a case. Lastly, local environmental regulators may require technical information, dis-closed within the environmental im-pact assessment report, to be pub-licly available for a period of time.
After a thorough review of all publicly available materials, in-vestigators can focus on gather-ing evidence including interviews, Nick Blank, Blackpeak Group
photographs of equipment, pro-duct samples, product brochures and certificates of analysis. Clients should discuss in advance with risk consultants and legal counsels how any such evidence might be used in court. This can help guide collection of the evidence so that it is admis-sible in court.
Changes to the Chinese legal system may also make it easier for Dr. Kai Pflug, CEO, Management Consulting —
companies to litigate and recover damages. China announced the es-tablishment of specialized IP courts in Beijing, Shanghai and Guangzhou. For Western chemical companies, vention of IP loss, detection of IP protecting IP, it is imperative to con- the same equipment to competitors Detection of IP Loss
The cases heard by these courts will the threat of exposing critical intel- loss, and response to the loss. We sider a broad range of perspectives.
be technically complex matters such lectual property has therefore fre- will discuss these issues separately.
After key IP assets are identified, Access to IP: IP should be avai- Keeping an eye on the markets; as patents and technical trade se- quently been a key concern and an measures should be defined to re- lable only on a need-to-know basis, listening to customers, suppliers crets. The Supreme Court has also obstacle in expanding activities in Prevention of IP Loss
duce the exposure risk for individual i. e., access to specific IP should be and employees; and taking whistle- proposed removing limitations to China, particularly in the areas of IP items. Obviously, these measures limited to the staff requiring it for blower reports seriously are all good damages that can be claimed by production and research. However, Any strategy to prevent IP loss must will affect many different areas, and their specific work.
measures to detect IP loss. The hu- patent owners.
China is already the biggest market start with a definition and prioritiza- we will only give a few selected ex- IT setup: Basic precautions such man resources department also can for chemicals in the world, and cur- tion of the IP owned by the company. as utilizing computers without USB play an important role, particularly No Total Security
rent growth rates compared with It is important to note that IP is not Facility design: Chemical com- slots, or limiting access to personal by conducting exit interviews. These other countries suggest that its im- at all limited to protecting patents. panies setting up new facilities may email websites, should be taken to interviews may help detect a prob- Admittedly, all the measures out- portance will increase even further. IP covers a far broader area. For ex- consider designing them from the prevent theft of IP. In one case, an lem with an employee who is leav- lined above will only limit the risk Thus excluding China as a location ample, it also includes items such ground up with security in mind. employee downloaded a series of ing. Even more importantly, as em- and the consequences of IP loss for chemical production and chemi- as customer lists, information on For example, conference rooms for control settings and other key tech- ployees leave, they may feel more — there are no guarantees to stop cal research is not a realistic long- pricing, experience in how to best meetings with external guests may nical and environmental data onto a comfortable reporting a colleague's it. Some chemical companies have term option for companies aiming train staff, know-how in production, be located at the main entrance, thus USB device just days before he re- experienced significant IP loss, not to be leading global players. Without HSEQ (health, safety, environment, preventing visitors from walking signed. Even though the company Suppliers and customers are in China, but in their Western home local production, chemicals produc- quality) knowledge, information on through a facility unattended. While learned about the incident and took also good sources of intelligence. countries. This has obviously not ers have serious disadvantages with chemical formulations, names of key closed-circuit TV cameras may be action against the employee, it was They are the ones who are usu- stopped them from doing business regard to cost and delivery times. staff, supplier lists, specifications of helpful, this investment is a waste too late to undo damage caused by ally approached by new companies there. And with the right strategy, Without local research, it is almost raw materials, etc. While identifying if the security staff is not sufficiently the employee passing the informa- purporting to "offer the same tech- companies will be able to achieve a impossible to create products suf- these IP items, the location of the trained to use the system. Control- tion to others.
nology at a better price," which is a similar level of IP security in China ficiently adapted to local needs.
respective IP within the company ling IP at a single centralized facility Employee retention: Companies red flag for IP theft. Suppliers also as in their Western markets.
As a consequence, Western play- should also be cataloged. Subse- with robust security is easier than must be strategic about protecting have opportunities to visit a range of ers will have to bring more of their quently, the intellectual property operating many smaller locations.
their core assets — knowledgeable plants, and may spot equipment and Nick Blank, director, Blackpeak
intellectual property into China. At items should be prioritized based Black box approach: Bringing IP employees. This includes creating design infrastructure that copies the Group, Hong Kong, China
the same time, they will have to on the likely damage a loss of each in as a "black box" from outside (this long-term career plans and incen- original. Informal reports from these Dr. Kai Pflug, CEO, Management
improve the way of protecting this item would cause to the company. may be from outside of China for tives for employees with access to sources are often the first step in de- Consulting — Chemicals, Hong
IP. Similarly, Chinese chemical com- This allows management to focus on multinational companies, or from sensitive IP. This is particularly im- tecting IP loss.
panies, particularly those that have the most critical IP items and ap- outside of, e. g., a production site for portant for segments booming in already been in business for some ply corresponding levels of protec- a domestic company). This can apply China. In these segments, the danger Response to IP Loss
time and thus have gathered their tion. However, prioritizing IP is not to a variety of items including mix- of competitors poaching knowledge- own intellectual property, must also as straightforward as it may seem. tures of raw materials, equipment able employees is particularly high. If a chemical company suspects protect their IP in order to avoid Opinions may differ about what con- parts or software. Building equip- At the same time, companies should patent infringement or theft of a competition from other domestic stitutes key IP. For example, the le- ment in China could mean entrust- conduct adequate due diligence on trade secret, it should investigate to gal team's priorities may differ from ing contractors with schematics and new hires to understand if they left gather more information. As a first The protection of IP can broadly those of the research team and so designs. The same contractors may any former employers under a cloud step, it is important to understand be split in different phases — pre- on. As all employees have a role in see business opportunities supplying of suspicion.
the background and shareholding of Lanxess Starts New EPDM Rubber Plant in China
BASF Signs Coatings Deal in China
German chemical producer Lanxess lored to Chinese and Asian custom- pany said the Marl plant is "the least Werner Breuers – who had respon- BASF's Coatings Division has signed tive refinish coatings is important has started production at its new ers' needs.
competitive in its EPDM production sibility for the group's Performance a manufacturing agreement with for fulfilling the growing market ethylene propylene diene rubber With the gradual ramp-up of the network, due to its poor economies Polymers business – in August 2014.
Guangdong Yinfan Chemistry Co, a demands," said Peter Fischer, senior (EPDM) plant at Changzhou in Chi- new facility to its nameplate capac- of scale and relatively high energy "We still have significant over- Chinese firm that recently opened a vice president, Coatings Solutions na's Jiangsu Province.
ity, Lanxess said it will "complete" its and raw material costs. Some 120 capacity" for synthetic rubber, cur- new production facility at Jiangmen Asia Pacific at BASF. Partnering with Over the next several months, global EPDM asset base. In fact, with jobs will be slashed in the move.
rent CEO Matthias Zachert said at City, Guangdong Province.
Yinfan "supports BASF's ambitious the company said it will be running the planned shutdown of the 70,000 Excessive investment in an over- the annual results press conference. Under the agreement, Yinfan will plan in this fast-growing market," sampling and approbation processes t/y EPDM plant at Marl, Germany, supplied rubber market — in which For 2015, he said the business will manufacture automotive refinish he added.
with customers. The new 160,000 t/y by the end of this year, output will Lanxess is the leading player — has remain "challenging." Earnings of coatings, targeting the non-premium Qingtao Zhang, Chairman of plant in Changzhou Yangtze River- actually be reduced.
been blamed for the dramatic profit the Performance Polymers segment, segment, for BASF at the new plant, Yinfan, said his company is "fully side Industrial Park, said to have ac- In announcing the planned clo- slide that led to the forced resigna- which also includes engineering using the German chemical giant's committed to meeting the stringent cess to "excellent storage and ship sure simultaneously with publica- tion of former CEO Axel Heitmann in plastics, are expected to be in line formulas and technologies.
quality requirements of BASF in au- uploading facilities," will produce tion of its annual results for 2014, in early 2014 and the subsequent de- with the 2014 figure of 808 million. "Establishing a reliable, regional tomotive refinish coatings." (dw) ten premium grades of EPDM tai- mid-March the Cologne-based com- parture of managing board member manufacturing footprint for automo- + + + Find all content of this issue plus latest market news on + + +
CHeManager International 5/2015 Biorefineries and Chemical Processes
As the range of feedstocks, process case studies, additional exercises technologies and products expand, and examples. This textbook is de- biorefineries will become increas- signed to bridge a gap between en- ingly complex manufacturing sys- gineering design and sustainability tems. This book presents process assessment, for advanced students modelling and integration, and and practicing process designers whole system life cycle analysis tools and engineers.
for the synthesis, design, operation and sustainable development of bio- 2 Biorefineries and Chemical Processes Stefan Oschmann (57), currently deputy chief executive of
refinery and chemical processes. Jhuma Sadhukhan, Kok Siew Ng, Elias Martinez CESIO Congress, 1 – 3 June 2015, Istanbul, Turkey
Merck KgaA, will be promoted to replace current CEO Topics covered include an introduc- The 10th CESIO congress will showcase an extensive scientific program on Karl-Ludwig Kley (63). Oschmann would take on the new role
tion to the concept and development John Wiley & Sons the main theme „Surfactants in a Globalising World — Creating new Pos- next year after the group‘s annual shareholder meeting in of biorefineries, tools, a look into Price: € 97.90 sibilities". In addition, business convention facilities will be offered to all April 2016 or in September next year at the latest, when biorefinery systems as well as four ISBN: 978-1-119-99086-4 participants and their companies to do business efficiently. Sessions, post- Kley‘s current contract expires. The German drugs and ers and exhibition will cover the scientific, economic, technical, as well as chemicals maker last September appointed Oschmann, the safety and regulatory aspects of surfactants and surfactant applications in head of its pharma business at the time, as deputy chief the industry and consumer products. The CESIO Congress provides a good executive from January 2015 on, sharing strategic manage- opportunity to meet with key contacts along the surfactant value chain.
ment functions and representation of the company with Kley.
2 NanoInnovation: What Every
Udit Batra (44), currently CEO and President of Merck Mil-
Achema, 15 – 19 June 2015, Frankfurt, Germany
lipore, has been appointed to lead the combined life science Manager Needs to Know
With 3,800+ exhibitors and almost 170,000 participants, Achema is the business of Merck Millipore and Sigma-Aldrich once the leading international exhibition congress on Chemical Engineering, En- acquisition of Sigma-Aldrich has been successfully com- The innovative, easy-to-read guide the contents. The result is a vivid, vironmental Protection and Biotechnology. Environmental Protection and pleted. Batra has served as CEO and President of Merck‘s to the „nanoscale revolution", this yet realistic look at nanotechnology, Biotechnology are integral general topics at Achema, both exploit the life science business Merck Millipore since March 2014. book provides essential knowledge providing orientation in the nano technological solutions enabled by process engineering. As a result, the He joined Merck in 2011 to head the Group‘s Consumer of nanotechnology and clearly ex- world: major lines of research, key synergistic concept of production-integrated environmental protection Udit Batra
Health business. Prior to that, he worked at Novartis Vac- plains the fundamentals of nanoma- players in R&D, as well as social, has become one of the hallmarks of Achema. In answer to the great de- cines and Diagnostics, where he was head of Global Public Health and terials and properties. Written by a economic and political issues.
mand, the event offers additional exhibition space for Pharmaceutical, Market Access. He served in a range of executive management positions technology pioneer, the book shows Packaging and Storage Techniques.
at Novartis, including global Head of Corporate Strategy and Country feasible strategies for managers in President for the Pharma Business in Australia.
nanotech companies, including how to communicate with nanotech engi- Chemspec Europe, 24 – 25 June 2015, Cologne, Germany
Marie Ffolkes has been appointed to the position of President, Industrial
neers and developers, coupled with 2 NanoInnovation: What Every Manager Needs to Know Chemspec Europe is the only dedicated event for custom, fine and spe- Gases–Americas at Air Products, effective May 18, 2015. Across North and examples of emerging technologies Michael S. Tomczyk cialty chemicals professionals and end users from segments like pharma, South America, Ffolkes will have accountability for safety, plant opera- and innovations. A level-headed dis- biotechnology, crop protection, cosmetics, contract manufacture, and tions, distribution, supply chain, procurement, sales, marketing, as well as cussion of critical issues for decision Price: € 49.90 many more. The trade show with a focused range of exhibits and easily regional operations. She joins Air Products from Tenneco where she was makers and stakeholders rounds off ISBN: 978-3-527-32672-3 identified feature areas will be accompanied by a range of conferences, global vice president and general manager of its Global Elastomer & Ride seminars, workshops and networking opportunities, as well as new fea- Performance Group. Prior to Tenneco, she served at Johnson Controls as tures to celebrate the 30th edition of the event. Chemspec Europe provides vice president and general manager for its South American Region's Au- a perfect opportunity to connect with buying teams from every type of tomotive Group based in Sao Paulo, Brazil. Ffolkes also formerly worked industry sector ; customers, distributors, end-users and new prospects.
for General Electric in a variety of roles, including senior manager, Global 2 Mergers & Acquisitions–GE Healthcare. She holds an MBA from Columbia Business Ethics: Readings and
Business School and a B.S. from Brooklyn College.
Specialty & Agro Chemicals America, 9 – 11 September 2015, Charleston, USA
Cases in Corporate Morality
Specialty & Agro Chemicals America focuses on the chemical products and Svein Tore Holsether will become president and CEO of Yara International
technologies that have specific applications for the agrochemical and spe- with effect from October 2015. He will succeed acting CEO Torgeir Kvidal.
The fifth edition of Business Ethics through 53 readings and 30 pertinent cialty chemical manufacturing markets. Participants cover a diverse range Holsether is currently serving as president and CEO of Sapa Group, a addresses current, intriguing, often case studies. Significantly updated, it of chemical end-uses including adhesives & sealants, agriculture & crop pro- position he has held since 2011. Kvidal, who has been acting CEO since complex issues in corporate morality includes new leading articles, related tection, coatings & paints, cosmetics & personal care, flavors & fragrances, October 2014, will return to his position as CFO. Holsether was born in current cases, and mini-cases based oilfield & lubricants, pharmaceuticals, plastics & composites, and water Norway in 1972 and holds a BSc in finance from the University of Utah.
on MBA student dilemmas and pro- treatment. The conference program includes a mix of presentations focused vides impartial, point-counterpoint on both the agrochemical market and broader specialty chemical industry.
Mario Mehren, currently a member of the board of executive directors of
presentations of different perspec- Wintershall and responsible for Exploration & Production Russia, North tives on the most important and Africa and South America, has been named president of BASF‘s oil and highly contended issues of business ChemOutsourcing, 14 – 17 September 2015, Long Branch, USA
gas division, effective July 1, 2015. In this function he will be head of ethics. All authors have substantial ChemOutsourcing is the largest USA-based API show attracting annually Wintershall. He succeeds Dr. Rainer Seele, who has been named CEO of OMV,
experience in teaching, writing, and around 700 chemists from the pharmaceutical, biotech, and chemical indus- Vienna, Austria, effective July 1, 2015. Seele has been head of Wintershall conducting research in the field.
tries. The show focuses on API development spanning early drug discovery through chemical development and commercial supply. Attendees are ex- 2 Business Ethics: Readings and Cases in ecutive scientists from pharmaceutical companies responsible for sourcing Michael Pontzen has become a member of Lanxess‘ management board on
Corporate Morality starting materials, intermediates, and APIs, and experienced in working April 1, 2015. He assumed the role of CFO at the specialty chemicals W. Michael Hoffman, Robert E. Frederick, Mark S. with Contract Research and Contract Manufacturing Organizations (CROs company. He will succeed Dr. Bernhard Düttmann, who left the company at
& CMOs). Likewise, the show is attended by high-level executive suppliers the end of March, 2015. Düttmann has been CFO at Lanxess since 2011. of these services and products, including 100+ exhibitors. Michael Pontzen was born in Mönchengladbach, Germany, in 1969. After Price: € 55.90 studying business administration, he held various positions at Ferrostaal, ISBN: 978-1-118-33668-7 MAN and EADS. He joined Lanxess in November 2004 as head of the investor relations group. In October 2008, he became head of corporate finance within the treasury group. He additionally assumed responsibility for risk and cash management from spring 2009. Pontzen has been head of the corporate controlling group since January 2012.
Peter Vanacker (49) succeeded Dr. Martin Wienkenhöver as CEO of CABB on April
1, 2015. Wienkenhöver will retire later this year after a transition period
and then serve on the company‘s advisory board. Vanacker has served for about 10 years as member of the executive committee of Bayer Material-Science and ran its global polyurethanes business from 2004 to 2011. He was also Chief Marketing and Innovation Officer of Bayer MaterialScience. …the JUNE issue of
Most recently he has been CEO of Treofan Group.
Oliver Albrecht took on the role as new managing director of Vetter on
April 1, 2015. He replaces Max Horn who left the company in June 2014.
In his new role as Managing Director, Albrecht will be responsible for
two of the eight company divisions, the first of which is comprised of
Finance, Controlling and IT. The second division includes Corporate
Development, Legal and Corporate Compliance. In recent years, he was CFO of SHW headquartered in Aalen, Germany and acted also as an ▪ COVER STORY
independent consultant for mid-sized companies. Albrecht previously Creating a Market Leader in Research
Big Data in Life Sciences
held positions at Centrotherm Photovoltaics and in the financial and Chemicals & Equipment
– Vir Lakshman, KPMG – Interview with Udit Batra, Merck banking sector. He holds a diploma in Business from the University of ▪ PHARMA
Mannheim, Germany.
Pharma Production 4.0:
Future Growth: Chemtura OMS is Com-
When Purity Becomes a Challenge
Dr. Giorgio Bruno has been appointed General Manager of Recipharm Italia.
mitted to Delivering Customer Value
– Interview with Thomas Zimmer, ISPE – Interview with Alan Swiech, Chemtura Highest Safety:
In this role, he will serve as CEO for all of Recipharm's Italian operating New Openings: Cheap Oil Boosts Demand
Serialization of Pharma ceutical Packaging
companies. Dr. Bruno has long established senior management experi- for Oil & Gas Chemicals – Sean Milmo
– Daniel Sanwald, Bosch ence from within the pharmaceutical industry, especially in the area of manufacturing. He has worked in both Italian and multinational pharma- ▪ PRODUCTION
ceutical companies covering a wide range of disciplines. In particular he Process Intensifi cation:
Enriching the Microbiome
New Challenges Demand New Processes
– Interview with Marcus Meadows-Smith, has had responsibility for quality and manufacturing at such companies Register for free trial copies
including Parke Davis, AstraZeneca and Corden Pharma. Dr. Bruno also Industrial Plant Manufacturing:
No Contradiction: Improving Crop Yields
of CHEManager International on:
has held a number of positions within Italian based industry associations. Growth Regions vs. Recession Regions
& Protecting the Environment
– Oliver Kinkel, Michael Willome, Clariant He holds a Ph.D. in Pharmaceutical Chemistry and Technology from the University of Milan.
+ + + Find all content of this issue plus latest market news on + + +
CHeManager International 5/2015 eU Chemicals trade with Major Partners
EU Commission Finalizes New GMO Import Rules
EU chemicals trade flows with the United States eU – US Chemicals trade
The European Commission has fi- A deadlock in GM crop approvals While the US wants Europe to open nalized new rules allowing mem- has been a major hindrance to their its doors to these products, many extra-eU chemicals trade in 2013 totaled € 229.3 ber states the freedom to restrict distribution in the EU up to now. environmental and health advocates EU trade balance billion with exports reaching € 139 billion, thus de- or prohibit the import of genetically Only one is currently approved for are vehemently opposed.
livering an eU chemicals trade surplus of nearly € 49 modified crops for food or feed, even commercial cultivation, Monsanto's In a statement, US Trade Repre- billion. The top 10 eU chemical trade partners ac- if they have been approved by the insect-resistant maize, MON 810, sentative Michael Froman expressed counted for 70% of exports and imports (c. f. the EU legislative authority.
which is grown in Spain and Portugal.
disappointment over the Commis- article on page 10). The US is by far the eU's biggest chemicals (€ million) This proposal, which mirrors a Of the 129,000 hectares of GM sion's plans to let EU national gov- trading partner in chemicals. It buys € 26 billion of directive issued by the EU in March maize grown in the EU in 2012, fig- ernments decide for themselves eU exports, nearly 20% of the eU chemicals total covering the cultivation of GM crops, ures show that Spain accounts for whether to allow GM imports. "Pro- every year, whilst providing € 20 billion of eU im- will now be sent to the European more than 90%.
posing this kind of trade-restrictive EU trade flows with US: ports. The drop in exports since 2012 is mostly due Parliament and the Council for a Currently, 58 GM crops are ap- action is not constructive," he said, 7,304 7,155 8,454 6,316 to petrochemicals that account for 46% of eU che- proved for use in feed and food. adding that it appears to divide the micals exports and have been negatively affected 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Under the latest rules, to opt out of While very few are on sale for hu- European trade bloc into 28 sepa- by the US shale gas boom, hence lowering the total approving an imported crop for do- man consumption, an estimated 60% rate markets.
Source: Eurostat (Comext), CEFIC ‘Chemical Connections' Report, 2014 CHEManager International export volume.
mestic use, member states will have of the EU's requirements of vegetable For their part, European environ- to provide reasons not already as- proteins for cattle nevertheless are mental organizations are fearful that sessed by Brussels authorities, which met by imported soy and soymeal the proposed legislation does not pro- currently include effects on human from countries such as the US, where vide a firm legal basis for member EU chemicals trade flows with China eU – China Chemicals trade
health and animal health and poten- GM cultivation is widespread.
states to opt out, exposing them to le- tial damage to the environment.
The US government and the Eu- gal challenges from biotech interests.
Within a decade, China has become world leader in Suggested reasons could include ropean biotech industry have re- The right for companies to sue na- EU trade balance chemical output by a wide margin, with annual sales local planning restrictions or lack peatedly complained about the EU's tional governments seen as restrict- of € 1,047 billion, a 33.2% share of the global total of public consensus about the de- inaction in approving GM products. ing trade is an especially controver- and far ahead of the eU's € 527 billion sales and sirability of the product.
The association representing the sial talking point, which has consist- 16.7% global market share. Today China is the eU's "The objective is to give national interests of the biotech industry, ently held up TTIP negotiations.
chemicals (€ million) second-biggest chemicals trading partner, accoun- governments' view the same weight EuropaBio, contends that the Com- A lack of a consensus about ting for 8.7% of eU exports. While Chinese chemical as scientific advice in the authoriza- mission has not cleared any crops whether this right should be exclud- companies are gradually increasing their focus on tion of GMOs in their territory," Com- since November 2013.
ed from any deal is one of the rea- specialty chemicals, the country will remain a major petition Commissioner Margrethe Additionally, GM crops are a sons leading European politicians EU trade flows with China: importer of commodity chemicals for some time to Vestager, standing in for Health point of controversy in negotiations such as Germany's vice chancellor, come. Chinese expansion does not necessarily imply Commissioner Vytenis Andriukaitis, between the EU and the US over the Social Democrat Sigmar Gabriel, 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 europe loses out. Rather, there are wins for both, and said at a press briefing to announce Transatlantic Trade and Investment predict that the agreement may Source: Eurostat (Comext), China offers many opportunities.
the proposals.
Partnership free trade deal, TTIP. never be concluded. (dw) CEFIC ‘Chemical Connections' Report, 2014 CHEManager International EU chemicals trade flows with India eU – India Chemicals trade
India is the world's second-largest emerging market, EU trade balance and the eU is India's biggest source of foreign direct investment. eU-India trade in goods and services accounted for nearly € 73 billion in 2013, of which € 7.2 billion was in the chemicals sector. eU chemi- chemicals (€ million) cals trade with India tripled in value during the last decade. exports in 2013 reached € 3.5 billion, of which petrochemicals, specialties and polymers ac- counted for almost one third each. Basic inorganics EU trade flows with India: and consumer chemicals share the remaining 11% almost equally. But, still, India buys only 3.1% of eU 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 chemical exports, which is modest compared to po-tential trade between the two economies.
Source: Eurostat (Comext), CEFIC ‘Chemical Connections' Report, 2014 CHEManager International EU chemicals trade flows with the GCC eU – GCC Chemicals trade
In 2013, the Gulf Cooperation Council (GCC) was the draghicich -
fifth largest trade partner of the european chemical EU trade balance Mediterranean Biochemistry — Pesto (Italian for "crushed") is a paste made out of pine nuts, garlic, hard cheese, olive oil, and — abo- industry, with a trade flow of € 11 billion. Thanks to ve all — basil. The dish originated in Genoa, Italy, where basil (Ocimum basilicum) played an important role as early as the Middle ages sustained economic growth, since January 2014 the as a medicinal agent. When we take pesto prepared from fresh basil, spread it onto steaming pasta, and allow the inimitable fragrance GCC countries no longer qualify under the Genera- to rise up, we ask ourselves: with what aromatic molecules is this plant blessing us? Prof. Klaus Roth answered this question in an ar- lised Scheme of Preferences (GSP) that allows prefe- chemicals (€ million) ticle in Wiley's journal "Chemie in unserer Zeit". The principal component of the Mediterranean-type basil — usually used for pesto rential tariffs for the least developed countries. They — is linalool. Other components are α-pinene, β-pinene, 1,8-cineol (eucalyptol), camphor, methyl chavicol (estragole), eugenol, are subject to full import duties when exporting α-bergamotene, and τ-cadinol. and now: buon appetito! chemicals to the eU. This matters because thanks to their huge output of low-cost fossil fuels, GCC mem- EU trade flows with GCC: bers are massive exporters of energy-intensive pet- rochemicals and polymers. Thus, the eU exports This issue of CHEManager International contains the
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 primarily specialties and consumer chemicals into Source: Eurostat (Comext), special supplement Distribution & Logistics
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