ECONOMY
Sales drop for major German firms Oversupply hits some of Europe’s biggest firms in the first quarter
Care business, lower volumes and declining world market prices resulted in a drop in both sales and earnings. Lower selling prices also adversely affected its Performance The largest chemical companies in GermaBayer recorded a slight increase in sales Materials business, the firm says. Despite ny, which has Europe’s biggest chemical during the first quarter of the year with a the decline, Engel insists that “our business industry, have experienced poor financial strong showing from pharmaceuticals. But is still doing well and our products are in performance during the first three months the firm’s CropScience division experidemand in the market.” of 2016, with sales down compared with the enced a sales decline in the face of a “weak Gas firm Linde experienced “a stable same period a year ago. The silver lining is market environment,” says CEO Marijn start to the year, in line with our forecasts,” that most of the firms still increased their Dekkers. Despite this, Dekkers is optimistic says Linde CEO Wolfgang Büchele. Chalearnings, in part due to cost lenges faced by Linde includsavings. Some of the savings ed adverse exchange rates and came from lower raw material German firms’ chemical sales started the year in decline. lower-than-expected sales costs on the back of cheap oil and earnings from its engiand gas. neering business, Büchele SALES EARNINGS CHANGE FROM 2015 BASF’s prices declined said. $ MILLIONS SALES EARNINGS 6% in the first quarter as a Linde is forecasting a 4% BASF $16,181 $1,580 -29.0% 18.0% result of oversupply in several increase in sales and earnings Bayer 13,599 1,721 0.5 13.3 markets with currency effects for full-year 2016, but Büchele Covestro 3,274 207 -5.9 58.3 reducing sales by a further also said, “the challenging Evonik 3,537 273 -9.0 -6.0 1%. It now expects 2016 sales market environment could Linde and profits to be lower than result in a decrease of up to 4,854 379 -0.3 2.8 in 2015. 3%,” Büchele says. Wacker Chemie 1,496 18 -1.5 -77.2 “In the first two months VCI, Germany’s largest Source: Companies of the year, customers mainchemical industry associatained a very cautious ordering approach. Bayer will improve its financial perfortion, at the start of this year had predicted a In March, however, business picked up in mance in 2016. 1.5% increase in the country’s chemical promany of our divisions,” says Hans-Ulrich For Evonik, the first quarter was charduction for 2016, up from 1.0% growth in Engel, BASF’s chief financial officer. acterized by “challenging business condi2015. Also at the start of this year, Dekkers, Under its DrivE cost reduction program, tions,” says Chairman Klaus Engel. On avspeaking as VCI’s president, had predicted BASF says it is on track to save $1.1 billion erage, the firm’s selling prices for the quara “somewhat brisker business” environannually by the end of 2018 from a baseline ter declined 7% compared with the same ment for the German chemical industry in of 2015. period one year earlier. In its Nutrition & 2016.—ALEX SCOTT
First-quarter results
PHARMACEUTICAL CHEMICALS
AMRI boosts manufacturing in Euticals acquisition Albany Molecular Research Inc. (AMRI) will acquire Euticals, a Lodi, Italy-based manufacturer of active pharmaceutical ingredients (APIs), for $358 million. The deal will significantly expand AMRI’s API capacity as well as its presence in Europe. A pioneer in combining research service and manufacturing, AMRI operates at more than a dozen facilities around the world, with its primary large-scale manufacturing plant located in Rensselaer, N.Y. In Europe, the company currently runs a formulation development and drug product manufacturing plant in Glasgow, Scotland. AMRI closed a development services and API manufacturing plant in Holywell, Wales, last year. The Euticals acquisition will bring large-
scale manufacturing plants in Italy, France, Germany, and the U.S., covering a range of specialized technologies. “The acquisition of Euticals will provide us an established custom synthesis presence in Europe and will further build on our expertise in complex APIs,” says William S. Marth, AMRI’s chief executive officer. AMRI, which reported revenues of $402 million in 2015, says it will gain 400 customers and a diverse portfolio of generic APIs in the deal while expanding its capabilities in sterile API manufacturing, steroids, fermentation, and controlled substances. Euticals had $245 million of revenue for 2015. Industry analyst James Bruno of Chemical & Pharmaceutical Solutions emphasizes
that the deal adds volume rather than new manufacturing technology, but he notes that the additional capacity may be necessary given AMRI’s growth in research services. “Eventually that stuff has to get to production, and they were losing it,” he says. Noting that Euticals has struggled in the competitive European market in recent years, Bruno adds that AMRI’s pipeline may revitalize the Italian firm’s operation. “There will be new management, and hopefully AMRI has a pipeline that they can feed to Euticals,” he says. Bruno adds that work from AMRI’s pipeline may move into production at Euticals’ facilities more quickly than work from new customers.—RICK
MULLIN MAY 9, 2016 | CEN.ACS.ORG | C&EN
11
