Zeneca fine chemicals unit girds for future The fine chemicals business has always been a sensitive one—fine chemicals op erations in the middle of a large compa ny can be swamped by a commodity culture. For Zeneca's fine chemicals unit, the split of British chemicals giant ICI at the beginning of June into biosciences company Zeneca and chemicals produc er ICI was a liberating move. Zeneca managers believe their corpo rate culture is more geared to quick re sponse to customer demand and innova tion, with fine chemicals making a more comfortable "fit," than is commoditychemicals oriented ICI. And they wel come the opportunity to expand markets outside the parent company, with the Zeneca image backing up their efforts. At the same time, however, managers in the fine chemicals unit are faced with the challenge of raising the unit's own profile within the parent company, where even corporate staff too often think solely of the captive production operations of the company, rather than the competitive fine chemicals business in the outside world. Nonetheless, the challenge is there for the unit: "We want to be a major player in the world pharmaceuticals scene, as focused as possible," says Ian Shott, who was business general manager until the beginning of August. The four areas the unit now focuses on are fluoroaromatics; chiral products; organophosphates; and a catalog business of fine organics. In addition, the unit plans to build up at least one other area—custom synthesis.
That route, Shott predicts, will lead the unit more heavily into serving the phar maceuticals market. As he notes, "about 95% of all the projects we look at are phar maceuticals, but we are still dominated by agricultural chemicals." In those five areas, he says, Zeneca has or is working to build "good technology, world-scale plants, and a leading market share. We can even compete with China" (considered a major low-cost competitive threat) "given our advantages." Two of the five areas are relatively ma ture businesses. The unit's fine organics— anthraquinone and other aniline deriva tives, for example—are sold to customers in a wide variety of end-use markets, in cluding pharmaceuticals, pigments, opti cal brighteners, and antioxidants. And the organophosphates business is fairly ma ture, Shott says. That doesn't mean there is no poten tial for further development, however. Zeneca is looking for new applications for organophosphates, in particular— possibly in flame retardants, for exam ple, and as intermediates for pharma ceuticals. Zeneca counts as "new" the other three areas it is pursuing—fluoroaro matics, particularly fluorobenzene deriv atives; chiral intermediates for chiral synthesis; and custom synthesis for pharmaceutical and agrochemical inter mediates. The company is one of the few left as serious contendere in the fluoroaromat ics business, which just a few years ago
Fine chemicals find a niche in Zeneca Coatings Colors Organic chemicals
Agrochemicals 32%
1 Pharmaceuticals > 40%
Specialties 24%
Biological η products Others — I
46% 32% 18% 4%
Total = $1.66 billion
Fine chemicals Trading & miscellaneous
Total 1992 sales = $7.04 billion
59%
Biocides, specialpurpose chemicals 4 1 % Total = $295 million
saw a flurry of interest and announced entries. Since then, however, some com panies have dropped out, or canceled plans for manufacturing, as process technology battled for economic su premacy. The unit has also established a serious stake in the flourishing area of chiral manufacturing. Throughout the indus try, companies are jumping to meet de mand for certain pharmaceutical and agrochemical products created by regu latory requirements that these products contain only the desired chiral form of active ingredient. For example, in the agrochemicals field, products that contain racemic mixtures are being deregistered, with reregistration covering only the optical ly active materials. However, Shott notes chiral material producers are tending to focus on the pharmaceuti cals industry. "They put in more effort on new molecules—40 to 50 molecules a year. The agrochemicals industry is not as innovative." In the remaining area targeted by the unit, "we're offering custom synthesis and service to our customers—we can modify their product for a moderate cost," Shott says. He adds that, "in the chiral area, people underestimate what is involved. We've had a team together for many years," brought together through work at what was then ICI in biological products. The unit was able to put together a production and engineer ing team to focus on the market, and to gether with the fine chemicals sales team, gave it a strong combination. In a related move, the fine chemicals unit is being brought together with its sister business of producing effect chem icals—special-purpose products such as stabilizers. The combined unit will be under the direction of David Killworth, who has taken over as business general manager. As Killworth sees it, the com bination will give the company an even greater range of technologies to offer customers. But both he and Shott agree that for Zeneca's fine chemicals operations, "the major focus of our work is external," as Shott puts it. For example, by their reck oning, the Zeneca pharmaceuticals busi ness is just another customer, for whose business it must bid. That's the way the unit wants to pre sent itself to the outside world—and one suspects, to the inside world, as well. Patricia Layman AUGUST 16,1993 C&EN
13
