r > Chemical production, capacity use grow U.S. chemical production increased in February from the previous month, according to the latest seasonally adjusted datafromthe Federal Reserve Board, but output was still down from year-earlier levels. The government data show the production index for chemicals and products at 114.4 (1992 = 100), up 0.6% from January, which after revisions had been off 0.5% from December. On a year-to-year basis, February production was down 2.0% from the same month in 1998. January output had been down 2.8% from year-earlier levels. The increase in February chemical production drove operating rates higher on a month-to-month basis. The government's estimate of seasonally adjusted capacity utilization for February was 76.1%, upfrom75.7% in January but off from the February 1998 rate of 79.3%.^
Brazil halts Monsanto's genetic crops program Days after authorities in Brazil's southern state of Rio Grande do Sul ordered Monsanto to provide environmental impact statements for the areas in which it is growing gene-altered crops, the state has ordered Monsanto to halt work on a plantation where it is growing genemodified soybeans. Last September, the Brazilian government approved Monsanto's application to grow the soybeans, which are engineered to tolerate Monsanto's Roundup brand herbicide. However, earlier in the week Monsanto had requested permission to amend its application with an agency responsible for intellectual property issues. Monsanto is the first company to have operations halted under a March 3 ruling that requires companies working with genemodified plants to obtain permission from the state. The state says it will monitor operations at all Monsanto sites to ensure that no gene-altered grains make it to market in Rio Grande do Sul.
businesses, including engineered components for the auto industry and chemicals for the pharmaceutical, personal care, and water treatment industries. The businesses that make up GenTek, excluding some recent acquisitions, had sales of $443 million in 1998 and a net income of $47 million. John M. Kehoe Jr., 65, forLaRoche seeks rest merly the president and CEO of Wheelabrator Technologies, will become CEO of of chlorine venture General Chemical, which will continue to LaRoche Industries, Atlanta, is negotiat- produce and sell industrial chemicals, ining to buy the half of its ChlorAlp joint cluding soda ash and calcium chloride. venture with France's Rhodia that it General Chemical's industrial chemidoesn't already own. ChlorAlp makes cal businesses had sales of $261 million in chlorine, caustic soda, and bleach at a 1998 and a net income of $9.4 million. Both 265,000-ton-per-year chlorine facility in companies will be headquartered in HampPont-de-Claix, France. It was formed in ton, with operations in Parsippany, N.J.^ 1997 when LaRoche bought half of the operation from Rhodia. That year, LaRoche also acquired a German chlor-al- Rhone-Poulenc Agro kali facility from Hoechst's Celanese unit. LaRoche is in the process of selling gets control its specialty chemical operations in or- of herbicide venture der to focus on commodities.^ Rhone-Poulenc Agro, the agrochemical unit of Rhone-Poulenc, has raised its Celanese Canada stake in Rhone-Poulenc Yuka Agro, a rice pesticide joint venture with Mitsubishi is selling and building Chemical, to 80% from 50%. ThefirmexCelanese Canada is negotiating to sell its pects to acquire the remaining 20% still polyester operations to Kosa, the joint owned by Mitsubishi Chemical someventure between Koch Industries and time this year. Yuka Agro recorded sales Mexico's Saba family that recently ac- of $60 million last year. The venture runs quired most of Hoechst's polyester oper- its own research lab near Tsukuba, and ations. Celanese Canada earlier acknowl- Rhone-Poulenc Agro intends to turn this edged that it was considering the deal. At into its main applied research center for the same time, Celanese Canada says it rice pesticides. Rhone-Poulenc says Jawill build a 130,000-metric-ton-per-year pan's crop protection market, at $3 bilacetic acid plant at its Edmonton, Alberta, lion, is the world's second largest. In ansite. The new facility will use methanol other deal, Rhone-Poulenc Agro will sell carbonylation technology and will re- its 2,4-D phenoxy herbicide business to place an existing smaller plant that used Nufarm group of New Zealand.^ butane oxidation. And in a related move, the company will start discussions with its majority shareholder, Hoechst Cel- Asian economies anese, on a number of strategic alternatives, including a portfolio realignment are bottoming out, and a distribution of cashfromthe poly- BASF says ester sale to shareholders.^ BASF judges that the Asianfinancialcrisis is bottoming out and that an economic turnaround is imminent in the countries CEOs named for most affected. Speaking at a regional GenTek and press conference in Singapore, Jiirgen Hambrecht, BASF board member with General Chemical responsibility for Asia, stressed that this General Chemical Group, Hampton, rosy scenario depended on a few assumpN.H., has named Richard R. Russell, 56, tions. 'We assume there will be no [soits president and CEO, to head the com- cial] explosion in Indonesia. We have pany's soon to be spun off GenTek Inc. some concerns about that," he said, sugGenTek will own and operate its manu- gesting that turmoil could occur in June facturing and performance chemicals when Indonesia holds national elections. Monsanto says it will go to court in order to continue producing the genemodified soybeans, and it still plans to distribute the seeds produced in Brazil for commercial planting there by mid1999, for harvest in early 2000.^
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business concentrates A second premise is that Japan's economy will return to a healthy growth path next year. Third, Hambrecht strongly believes that China will not devalue its currency. Concerning Indonesia, John Feldmann, president of BASF operations in Southeast Asia, further explained that although confident the worst-case scenario will not occur, BASF has an evacuation plan ready should its 800 employees in Indonesia need immediate assistance. Indonesia is a crucial country, he said, because of its population of 200 million and its economic weight within Southeast Asia. In deutsche mark terms, BASF sales in Asia-Pacific declined 10% in 1998 compared with 1997, despite several acquisitions by the Germanfirmin the region.^
worldwide and will have annual sales of about $4.5 billion including precious-metals trading and $2.2 billion without precious-metals trading. This action allows the company to "improve growth opportunities and at the same time provides a basis for possible cooperations, strategic alliances, or an initial public offering." To more easily incorporate the ceramic colors unit in the new entity, Degussa-Hiils says it has acquired the 30% of the Cerdec ceramic colors joint venture it did not already own from Swiss partner Ciba Specialty Chemicals. Transaction details have not been disclosed.^
Perstorp to spin off life sciences unit
Sweden-based Perstorp plans to spin off its life sciences business to shareholders, effective Oct. 15. The board of directors of the specialty chemical company has asked shareholders to approve the spin-off at the company's annual meeting on April 24. If approved, shareholders would receive one share in Perstorp Life Science for every two shares of Perstorp they now hold. The new company's operations would include Pierce Chemical and HyClone Laboratories in the U.S., as well as Sweden-based CuraGen, Roche sign Atos Medical. The combined sales for pharmacogenomics pact these biotechnology businesses were $84.7 million in 1998, up 29% from the CuraGen, New Haven, Conn., and Swiss year before. Earnings increased 48% drug giant Hoffmann-La Roche have from the year earlier to $10.3 million.^ Cambrex is building signed a two-year R&D collaboration fointermediates sector cused on the discovery of new drug targets and pharmacogenomics. Financial Business Roundup Cambrex Corp., East Rutherford, N.J., is terms have not been disclosed, but Curaenhancing its business in pharmaceutical Gen says it will receive up-front pay- • Air Liquide Canada will spend about intermediates and active ingredients. The ments as well as milestone and royalty $100 million to build an industrial gases company is paying $40 million to acquire payments for any products stemming and power generation complex in ScotIrotec Laboratories, a Cork, Ireland- from the collaboration. CuraGen will ford, Alberta. The new plant will largely based active ingredients producer with use its pharmacogenomic technology supply Shell Chemicals' ethylene glycol annual sales of $20 million. The deal in- platforms to evaluate current drug can- plant also under construction in Scotford. cludes a $15 million facility that Irotec will didates and will provide Roche's global Air Liquide will produce oxygen, nitroopen later this year. In connection with research centers with access to its gene- gen, argon, and carbon dioxide for marthe purchase, Cambrex has signed a sup- expression and gene-sequence databas- kets in western Canada as well. The gas ply agreement with Hexal, Germany's es. Roche says it will use the technology complex will begin operation in the sumsecond largest producer of generic to develop new products for its animal mer of 2000, when Shell's 880 million-lbper-year unit is expected to start up. drugs, to supply $50 million to $75 million and human health business units. -4 worth of active ingredients over the next • Methanex Corp., Vancouver, has five years. Cambrex has also acquired the closed a 260,000-metric-ton-per-year right to buy the stock of Conti BPC, a Shell, Dow to extend methanol plant in Medicine Hat, Alberta. Belgian intermediate and active ingredi- styrene relationship The company continues to operate a ent producer with annual sales of $16 mil570,000-metric-ton methanol plant there. lion. The share purchase will cost about Shell Chemicals Canada, the Canadian • Huntsman Corp. has licensed its ma$5 million. In a related move, Cambrex chemical operations of Royal Dutch/ leic anhydride technology and catalyst has realigned its sales reporting catego- Shell, and the Canadian operations of to BASF Petronas Chemicals, a joint ries to reflect its "growing commitment to Dow Chemical have signed a letter of venture between BASF and Malaysianlife sciences and facilitate the ongoing intent to develop a long-term supply government-owned Petroliam Nasional analysis of the company's business devel- agreement for styrene. Under the pro- Berhad (Petronas). Maleic anhydride opments in this area."^ posed agreement, Shell will provide a will be used as feedstock for the ven"significant proportion" of the styrene ture's recently announced butanediol made at its Scotford, Alberta, site to plant in Gebeng, Malaysia. to make styrene derivatives for • BASF will build its third new butaneDegussa-Hiils to form Dow North America. The deal extends a sup- diol plant at its Geismar, La., site. The separate metals, ply relationship between the companies 100,000-metric-ton-per-year plant, which that began one year ago and "is a perfect will use the butane-based ester hydrocatalysts unit fit of locations in terms of supply and de- genation technology acquired from Germany-based Degussa-Huls plans mand for styrene in North America," Kvaerner last year, will start up in 2003. to combine its precious-metals, automo- says Martin Kuzaj, Shell's business The company also is building butanetive catalysts, and ceramic colors units manager. For Dow, the arrangement diol plants in Malaysia and in South Kointo a separate legal entity. The as-yet-un- will provide additional supply for its ex- rea. BASF's current butanediol plants in named company will begin operating on tensive styrenics business, which has Geismar, Germany, and Japan all use Jan. 1, 2000. It will employ 5,000 people its own styrene production.^ the acetylene process.^ 12
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