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result of natural cycles in the market. “To some extent, we’ve had it good in agchem for the last three years, so it really looks bad to us now, but it might not be that bad,” said Tony Bastock, managing director of Contract Chemicals, a U.K. fine chemicals firm that does more than half its business in agricultural chemicals. “Across the broad church of the chemical industry, the economies are doing quite well—especially in the industrialized countries such as the U.K. and Germany,” Bastock said. “All in all, there is encouraging noise from customer industries, and everybody is pretty buoyant.”
BRIGHT PROSPECTS
Fine and specialty chemicals producers saw growth opportunities at Chemspec despite clouds over agchem.
OBSERVATIONS VARIED across the
exhibit floor, however. Many companies are working on assimilating or stimulating businesses recently acquired, or are adjusting to changes in management. Paul Vierendeels, European business development director for polymers and specialty chemicals at WeylChem, the nonpharmaceutical division of the German holding company International Chemical Investors Group, said business is “a bit of a Pharma ascends as agchem slumps at the European mixed bag, with certain sectors feeling slow CUSTOM CHEMICALS TRADE SHOW and 2016 appearing slow.” In addition to a RICK MULLIN, C&EN NEW YORK CITY depressed agricultural sector, he said, the polymers market has not picked up significantly despite improvements in the economy. The net result, he added, is single-digit WITH THE REST OF EUROPE on tenterHowever, some relief may be ahead on growth for his division. hooks over the possibility that the situathe regulatory front. Company executives For WeylChem, the action has been on tion in Greece could wreak havoc on finanhave their eyes on the Transatlantic Trade the acquisition front. Two recent additions cial markets, chemical companies meeting & Investment Partnership, or TTIP, a trade are AllessaChemie and Clariant’s detergent in Cologne, Germany, for Chemspec deal currently being negotiated between business, both purchased in 2014. Europe expressed confidence in business the U.S. and Europe that may impact pestiUwe Brunk, general manager for acetyls going forward. cide approval. at the German fine chemicals maker CABB, Despite a downturn in the cyclical agriAny agreement will likely include arsaid sales are “above budget,” with particucultural chemicals market, exhibitors were rangements for preshipment testing of maxlar strength in personal nearly unanimous in their optimism reimum chemical residue which he noted is garding the full range of fine and specialty levels in food and bever“Across the broad care, not a cyclical business. chemicals markets that account for the age products, according The market leader in trade show’s theme. to Neil Harvey, head of church of the acid Notably, pharmaceutical chemicals, international trade at the chemical industry, monochloroacetic (MCAA), CABB is set to which have had a diminished profile at Chemical Industries AsChemspec in recent years, made a parsociation, a U.K. industry the economies are add MCAA capacity in where it recently ticularly strong showing at the 2015 event, group. TTIP might also doing quite well.” China, took over production at which took place during the last week of include a joint U.S.-U.K. a joint venture making June. Contract manufacturers of active assessment program. 25,000 metric tons per year. The new capacpharmaceutical ingredients (APIs) set up “The sharing of resources and informaity, using technology from Germany, will booths in full force. tion by the EU and U.S. regulators in this add 25,000 metric tons of higher quality If agricultural chemicals were more area should speed up the [pesticide] apMCAA. prominent around the exhibit hall, they proval process,” said Harvey, who spoke Brunk said his unit, which does 10 to 15% were also a cause for concern. In addition at a conference on agricultural chemicals of its business in herbicides, is closely to high inventory levels for many chemical sponsored by the European Fine Chemiwatching developments at Dow Chemical, products—an overstocking that is likely to cals Group in association with Chemspec. which is introducing a system called Enlist. take two years to work down—regulatory Overall, exhibitors agreed that the Intended for crops that are resistant to constraints on pesticides are increasing. slump in agricultural chemicals is largely a
CHEMSPEC EXHIBITS MARKET CYCLES
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the herbicide glyphosate, Enlist combines glyphosate with 2,4-dichlorophenoxyacetic acid, or 2,4-D. Brunk noted that Dow uses MCAA to produce 2,4-D. Although nonpharma markets held sway as usual at Chemspec, there was an unmistakable surge in the presence of pharmaceutical chemical companies on the exhibit floor. Attendees concurred that the custom pharma chemicals market is particularly strong, citing a return of projects from China and India to Europe and advances in drug company pipelines. Siegfried, a Swiss custom manufacturer of APIs, occupied a full-sized booth near the entrance to the hall, across the aisle from the comparably sized Lonza booth. Marianne Späne, director of business development and sales at Siegfried, viewed this as appropriate. After all, Siegfried rivals Lonza, the historical market leader, in the pharmaceutical chemicals business following its acquisition of BASF’s pharma unit in May. That deal, which included plants in Germany, Switzerland, and France, effectively doubled Siegfried’s annual sales to more than $600 million.
Siegfried is also ready to open a plant in China as large as its manufacturing home base in Zofingen. “FOR THE LAST FOUR years, we have been coming here with a small booth,” Späne said. “But I said this year, we should do either a really nice booth and say, ‘Look, Siegfried is here,’ or we don’t do it.” Other fine chemicals producers with significant API businesses were on hand at Chemspec, some with ownership or management changes since last year. The German firm CU Chemie Uetikon, for example, was acquired in May by Novacap, a French firm with businesses in minerals, cosmetic chemicals, and pharmaceuticals, including a generic API portfolio acquired from Rhodia. Thomas Seeler, chief executive officer of Uetikon, explained that Novacap was interested in adding custom APIs and that Uetikon, with a production facility in Lahr, Germany, will continue to operate independently. Chemspec management made an effort to spotlight API manufacturing and research services by scheduling panel dis-
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cussions in which representatives of fine chemicals companies joined R&D managers at Bristol-Myers Squibb and Sanofi to discuss pharmaceutical outsourcing. The panels focused on the risks and benefits of drug research and manufacturing partnerships. Panelist Rudolf Hanko, CEO of Siegfried, noted that although contract manufacturing and services until recently “were not seen as a permanent fixture,” they are now a routine element of pharmaceutical research and manufacturing strategies. Whether the pharmaceutical contract manufacturer will become a more permanent fixture at Chemspec is yet to be seen. Späne said Siegfried’s purchasing team got more from the event, as they were able to meet with chemical suppliers, than did its contract manufacturing sales staff. “Chemspec is still not an exhibition for pharmaceutical ingredients,” she said. But Siegfried is already looking ahead to Chemspec in 2016. “We are confident that we can contribute to turning the chemical customer focus to more of a pharmaceutical focus,” Späne said. “We will make another investment in the next exhibition, in Basel.” ◾
