11-12/2013 December

Markets and Companies Information Technology The Middle East and China THE NEWSPAPER FOR THE Adaptability is more important are catching up to the than ever as the fourth industrial chemical-producing West. CHEMICAL AND revolution takes off.

Page 5 LIFE SCIENCE MARKETS Page 9

N ewsflow Markets and Companies: ‘No Free Lunch’ Merck KGaA offers £1.6 billion for AZ Materials. Bjørn Lomborg on the Give and Take in Greenhouse Gas Reduction

Allessa to cut a third of its work- force. New Thinking – Bjørn Lomborg plants over a 10-year period, be- tray the fact that there is no sense might not be a household name in DuPont says it will spin off its Per- of economic reality. We are not the chemical industry, but the mention formance Chemicals unit. going to cut carbon emissions sig- of his name in environmental activist nificantly, as long as it is very, very costly.” EU Commissioner demands unified circles seems to provoke one of two framework for shale gas in Europe. reactions: adoration or distain. Lom- Lomborg On The Energy Transition borg, a Danish academic who rose to China is looking for new targets for The 2011 Fukushima disaster its abundant fuel. notoriety in 2001 with his controversial rocked many countries using nu- book “The Skeptical Environmentalist,” clear power to the core; it seemed Dow gears up to sell its Chlor-Alkali that no one was more chilled than can be found on a handful of top 50 or and Epoxy units. German Chancellor Angela Merkel top 100 lists for the world’s top intel- and her reigning party of Christian More on Pages 2-8 ▶ Democrats. The German govern- lectuals and leaders; however, he also ment ultimately decided to suc- Under Construction: once found himself on the receiving cessively take all of its nine active end of a real-life Three Stooges scene nuclear power plants off the grid Merck KGaA says it will build a new Bjørn Lomborg, Director, by 2022. Germany, like many other pharma plant in China. when a critic of his theories smashed a Copenhagen Consensus Center Western countries, is working to- pie in his face at a book signing. ward a transition to a sustainable SABIC will start up its Yanbu PET is; perhaps a critic of current envi- economy through renewable energy, Plant in January. ronmental policy would be a better energy efficiency and sustainable Lomborg argues that current meas- description. development. However, the country’s Formosa Plastics is planning a $2 ures to halt global warming — spe- “The only place where I’ve abrupt departure from nuclear pow- cifically the Kyoto Protocol — are changed my pitch since 2001 was er has proven costly for consumers; billion ethane cracker in Texas. too expensive and non-effective, but my take on the Kyoto Protocol,” according to a recent article in the he generates most of the ire against Lomborg says. “Twelve years ago, Financial Times, the cost subsidiz- GSK will expand its Scottish plant. him with his standing that the cli- I pointed out that for every dollar ing green energy is expected to pass © Sergey Nivens - Fotolia.com More on Page 11 ▶ mate changes that are underway spent, probably 25 cents worth of $100 billion next year. are not as grave as many claim. His good was being done for the envi- Lomborg says, “Germany is one Chemicals: mantra is, “panic is rarely a good ronment. Not a great investment of few countries in the world that tables. At what point do the envi- Paris 2015 And Beyond basis for smart policy.” Lomborg … and in reality, it ended up being has significantly reduced its carbon ronmental benefits on one side out- Celanese aims to close two Euro- often takes the media and environ- much, much worse than that.” emissions, but it has also been done weigh the detriments on the other Governments of the world will try pean acetyls plants. mental activists to task for what he Criticism of the Kyoto Proto- at very, very great cost.” And he says side? once again to cobble together a suc- describes as exaggerating the num- col, which was created in 1997 in what works for Germany cannot “There is no such thing as a free cessful global warming pact in Paris bers on climate change in order to an effort to throttle human-made work for its less-affluent European lunch,” he says. “With fracking, as in 2015, where the next UN Confer- ECHA review finds no need to tigh- scare the general population into greenhouse gas emissions, is noth- neighbors. Spain, for example, has well as with anything else we do, ence on Climate Change will take ten TDI restrictions. action. ing new in both environmental and seen its subsidies for renewables go there is always going to be a trade- place. It is widely agreed that the “There is a tendency in the ac- economic circles. Many say the pro- up to €8.1 billion, almost 1 % of the off. There is no such thing as risk- 2009 Copenhagen conference was BASF to sell PVC modifiers business tivist camp to sort of keep pushing tocol doesn’t go far enough in limit- country’s GDP. free energy. Good regulation here is a complete flop, setting back the to Kaneka. that and keep only talking about ing emissions while others, such as “Spain obviously is not in a good key to minimizing the risks.” world’s movement to get a handle on the upper limit,” he says in an in- Lomborg, argue that the costs by place economically to be spending Lomborg argues that fracking global warming. While many UN of- BASF challenges the EU‘s Fipronil terview with CHEManager Europe. far outweigh the benefits. Rather more on green subsidies than they has the potential to cut carbon emis- ficials have presented themselves as restrictions. While Lomborg doesn’t deny that than spending money on frame- are for higher education,” Lomborg sion dramatically; it has probably optimistic, Lomborg has his doubts. there are scientists who have pro- works for greenhouse gas reduc- argues. He then makes the kind of cut U.S. carbon emissions about 400 “They are setting it up a little More on Pages 12-14 ▶ jected, for example, a drastic rise tion, Lomborg says money spent calculation he is famous for: “The to 500 megatons per year over the bit like Copenhagen in 2009, where in sea levels, he says there are also on R&D of green energy sources is net effect of all that spending over last three or four years, he says. He we are going to solve the climate People: scientists who claim won’t be any a more effective method of halting the next 20 years will postpone glob- compares that to the entire impact change and again have this grand rise. This is why he says he prefers climate change. al warming by the end of the century of the Kyoto Protocol, which he says treaty,” he said. “We need to get Stephan Sielaff has been named to defer to the UN’s Intergovern- “For every dollar spent on this by 62 hours.” has cut emissions by 250 megatons beyond that and look for another COO of Archroma. mental Panel on Climate Change as kind of R&D, we can probably avoid This argument goes hand in hand per year. solution.” being the most reliable source for about $11 of climate damage, “he with Lomborg’s main thesis. “So, the U.S. has done twice as However, Japan’s recent ac- Dr. Rolf Drewes has joined Song- such prognoses. However, the IPCC says. “This is much more than can “We need to focus spending on R&D; much as what the rest of the world knowledgement that its greenhouse- won as vice president Specialty has come under fire recently after be done with climate policies.” the only way you are going to get has done over 20 years, and they gas reduction target of 25 % below Chemicals publishing its Fifth Assessment on However, the protocol also has its people to switch to green energy in have not done it by giving up mon- 1990 levels is impossible to attain Climate Change in September. Ac- popular proponents, such as Former the long run is by making sure that ey,” he says. “In fact, the U.S. has has buoyed Lomborg’s hope that the More on Page 15 ▶ cording to Spiegel Online, several U.S. Vice President Al Gore, who per- the technology becomes so cheap that made $125 billion a year through world will come around to the idea renowned scientists say the report sonally negotiated for it in the U.S. everyone wants to buy it. If we could fracking. Compare that with the of an R&D-based approach to global is riddled with inconsistencies. Some in 1997. It was signed by President make solar cells and wind turbines $280 billion dollars the EU spends warming. have called the report too optimistic, Clinton that year, but was never rati- and all the other green energy sourc- each year to cut carbon emissions.” “Japan has simply given up on while others have said the report in- fied by the Senate, and the U.S. was es cheaper than fossil fuels, everyone But Lomborg stresses that he the approach to climate policy that cludes imprecise calculation on the never a participant in the protocol. would switch, also the Chinese and doesn’t think fracking is the long- has failed for the past twenty years.

role humans play in global warming. “When I debate with Al Gore or the Indians. And as long as they are term solution to CO2 reduction. Instead it has promised to spend Regardless, Lomborg says, any other of my opponents, I do much more expensive, no one will Rather, he says it’s a bridge to “get- $110 billion over five years for in- “There is a good argument to be believe that they are motivated by switch in any significant way.” ting to a world where we don’t emit novation in environmental and en-

made that panic actually makes for goodwill,” Lomborg says. “I’m not CO2 at all.” ergy technologies,” he says “The really bad policy outcomes which, of questioning their morals or inten- ‘No Free Lunch’ “Fracking is not the solution,” he economics show that the smartest course, is what we have been seeing tions, rather whether their policies says. “But in the environmental con- long-term solution would be to fo- over the last 20 years.” are the right ones to move ahead.” Lomborg has often praised frack- versation, there seems to be a sense cus on innovating green energy. This Since his time as U.S. vice presi- ing — a controversial method of that if it’s not perfect, it’s not worth would push down the costs of future Lomborg, Al Gore and the Kyoto Protocol dent, Gore has become a symbolic unlocking underground gas depos- doing. But, in reality, we’ve been try- generations of wind, solar and many figure in the fight against climate its — as “this decade’s green solu- ing for the perfect solution to carbon other amazing possibilities. Every- By bad policy, Lomborg is referring change, culminating in his 2006 doc- tion.” Fracking has been an absolute emissions for 20 years and have got- one would switch to green energy, to the Kyoto Protocol. In a recent ar- umentary “An Inconvenient Truth,” boon for the U.S., freeing enormous ten almost nowhere.” not just a token number of well- ticle for the Telegraph entitled “Keep which sought to expose the myths amounts of feedstock and making Lomborg’s road to cutting carbon meaning rich Westerners.” Calm and Save the Earth,” he starts and misconceptions about “global production there viable for chemi- emissions is paved with compromis- off with “Bad news sells – that’s warming’s deadly progress.” So does cal companies once again. Dow, for es, and his argument always circles Brandi Schuster, why we hear so much of it. But it Lomborg really consider Gore to be example, will be building two shale back to cost. CHEManager Europe can leave us with a panicked sense an opponent? gas-fed plants on the U.S. gulf coast. “The simple point is, as long as

· PF 11 05 64 · 69469 Weinheim · Pressepost · DPAG· Entgelt bezahlt · 78719 Entgelt · DPAG· · Pressepost Weinheim · PF 11 05 64 69469 that the world is full of problems “I think he is arguing for a very However, communities located near green energy is so much more ex- that urgently need to be fixed.” In different set of solutions,” Lomborg fracking sites have reported prob- pensive than fossil fuels, we are not chemanager-online.com/en/ essence, Lomborg isn’t the climate- says. “His proposals, such as stop- lems such as water contamination going to get most of the world to tags/Lomborg

WILEY VCH WILEY change denier that many claim he ping the use of coal-fired power earthquakes and damage to water switch,” he says.

chemanager-online.com/en Page 2 MARKETS & COMPANIES CHEManager Europe 11-12/2013

CONTENT DECISIVE INFORMATION

THE PORTAL AND NEWSPAPER FOR THE EUROPEAN CHEMICALS AND PHARMACEUTICAL MARKETS

Front Page Accelerate Competency Assurance 7 Interpreting REACH 12 Tips for Faster Qualification, Expertise and Innovation Work of the ECHA Board of Appeal and the Appeals Process ‘No Free Lunch’ 1 Dr. Saidas M. Ranade, Director, GP Strategies Andrew Fasey, technically qualified member of the ECHA Board of Bjørn Lomborg on the Give and Take in Greenhouse Gas Reduction Appeal Mercedes Ortuño, chairman of the ECHA Board of Appeal Brandi Schuster, CHEManager Europe IT-Solutions 9–10

Transparency is the Golden Ticket 13 Next Generation Manufacturing 9 Markets & Companies 2–8 Holistic Business Approach Supports ‘Industry 4.0’ Principles Reach Offers Lessons for U.S. Chemicals Regulation Scott Bolick, Head of Idea to Performance, SAP Arnold J. Guikema, Tetra Tech Energy Costs and the European Chemical Industry 3

EC Debates Legality of Subsides for Energy-Intensive Manufacturers Smart and Connected 9 Sean Milmo, freelance science and business journalist Short Interview with Dr. Marko Lange, SAP, IBU Chemicals Phasing Out Mercury 14

How WeylChem PPC Made the Switch to Membrane Technology China’s Quest for Sustainable Growth 4 Saving Time And Money 10

© Nmedia/fotolia.com Lejla Skaljic, Marketing Communications Manager, WeylChem In Move Toward Consumption-Led Economy, Specialty and High-End Increased Automation of Drawings Pays Off Even in Smaller Projects Chemical Segments Will Further Expand Paul Martin, Business Development Manager, Intergraph CADWorx & Vir Lakshman, head of Chemicals & Pharmaceuticals Germany, KPMG, Analysis Solutions, Europe online.com/en chemanager - Rita Duran, senior manager, Chemicals & Pharmaceuticals Germany, People • Events • Awards 15 chemanager - KPMG online.com /en Chemicals 11–14 Cooperation Or Conflict? 5 Under Construction 11 The Chemical Industry in China and the Middle East At A Glance 16 www.gitverlag.com Dr. Kai Pflug, CEO, Management Consulting — Chemicals REACH and Chemical Distributors 11 Brenntag on Implications for the Industry Index 16 Effect of Global Shale on the GCC 6 Marianne Lyngsaae, Quality System Manager and REACH Adviser, Assessment of Regional Shale Development Brenntag Nordic and Matthias Raduner, REACH & European Projects Dr. Sven Bugarski and Oliver Gawad, Stratley Analyst, Brenntag Europe Imprint 16

Merck KGaA Offers £1.6 Billion for AZ Materials Allessa to Cut a Third of the Workforce PORTFOLIO German Group to Strengthen Speciality Chemicals Business RESTRUCTURING German Chemicals Maker to Merge with ICIG’s WeylChem

In a bid to expand its portfolio of prod- along with silicon-based products Allessa, the Frankfurt, Germany-based cals producer Clariant, also in Octo- With the dissolution of the Hoe- for optoelectronics, accounted for ber. Combination of the two portfolios chst conglomerate, many of the ucts for flat panel displays, German fine chemicals producer sold to private 30% of overall sales and had an would create a company with annual synergies between the two portfo- chemicals and pharmaceuticals group EBITDA margin of 29%. equity investor International Chemical sales of around €500 million. lios were destroyed, and “it is time Merck KGaA has offered £1.6 billion Merck is already the world’s Investors (ICIG) for an undisclosed sum Rafael Reiser, current CEO of to enable them again,” said Allessa Dr. Karl-Ludwig Kley leading producer of liquid crystals WeylChem has been appointed head supervisory board chairman Karl- CEO, Merck KGaA (nearly €2 billion) in cash to acquire for displays. “With this move, we in October, plans to cut the 900-mem- of Allessa. Gerhard Seifert, a former Hoechst AZ Electronic Materials. are strengthening the portfolio by ber workforce by about a third. Both chemical companies were managing board member. adding a premium business to our part of the now defunct Hoechst Allessa has been operating under Germany/Luxembourg — The The Luxembourg company’s existing business of high-margin Germany — The company cited group. The WeylChem activities an austerity program for some time, Luxembourg-based firm with sales board of directors has recommend- specialty chemicals,” said CEO Karl- the need to streamline operations were among the fine chemicals with employees working at wages of $794 million (€584 million) in ed that shareholders accept the of- Ludwig Kley. He added that the offer to remain competitive. Where the businesses merged into Clariant by 6.7% below the chemical industry 2012, manufactures anti-reflective fer. Individually, the directors have “marks another milestone” toward cuts will be made is to be announced Hoechst CEO Jürgen Dormann after wage and executives taking a 10% coatings used in hard disc drives, as pledged to tender their own shares, Merck’s transformation into a highly during the week of Dec. 17. the multinational group’s breakup pay cut. Authorities of Frankfurt well as specialty chemicals for the worth some 0.7% of the total. The specialized technology firm. The streamlining, already in pro- in the 1990s. Allessa emerged from and the German state of Hesse have graphic arts sector and shrink coat- offer period will run for 60 working Even after a successful acquisi- gress, will go hand-in-hand with the Hoechst subsidiary Cassella. Both pledged to provide support for the ings used in memory devices. days until mid-February. Merck said tion of the electronics specialist, planned merger of Allessa with Wey- have production facilities in the struggling business and the redun- Merck’s offer, contingent on an- to realize expects annual synergies pharmaceuticals will still account lChem, a Frankfurt-based detergents Höchst industrial park in Frankfurt, dant employees. (dw) ▪ titrust authority approval and the of around €25 million from the deal for more than half of the company’s and intermediates producer acquired and Allessa has its base at another tender of at least 95% of outstand- by 2016, with integration costs of sales. “Our philosophy has always by ICIG from Swiss specialty chemi- Frankfurt location. ing shares, represents a premium of €50 million expected between 2014 been to never put all eggs in one around 41% on the company’s three- and 2016. basket,” CFO Matthias Zachert told month volume-weighted average For 2012, AZ reported EBITDA of a media conference. price. On news of the bid, AZ’s value $262 million. Its IC Materials divi- “The current strategic opportu- DuPont to Spin Off Performance Chemicals soared by 52% on the London stock sion, which produces process chemi- nity for AZ to combine with Merck exchange to £1.5 billion, and Merck’s cals for integrated circuits used in is compelling,” said board chairman PORTFOLIO Company to Benefit from Consistent Earnings Growth, Lower Volatility share price rose 4.1% in Frankfurt electronic devices, accounted for John Whybrow, remarking that the trading. AZ is a spin-off of Swiss about 70% of sales revenue and deal will reinforce his company’s did not say whether it would divest announcing the separation, DuPont specialty chemicals producer Clari- had an EBITDA margin of 41%. The “strong market position and focused DuPont will spin off its $7 billion Per- the business nor did it identify po- said the fluoroproducts business, ant, sold to private equity investor Optronics division, which manufac- product development capability.” tential buyers. Huntsman is in the one of the traditional pillars of Du- formance Chemicals division, including Carlyle in 2004 and floated in 2010. tures photoresists for flat panels (dw) ▪ process of acquiring the Sachtleben Pont’s portfolio, was improving. In the titanium dioxide and the chemi- TiO2 business of Rockwood. Q3 2013 quarter, volume sales in- cals and fluoroproducts businesses, to Following the spin-off, Kullman creased 25%. said DuPont will have the optimum DuPont also has agreed to sell its EPA Fines Elementis Chromium shareholders over the next 18 months. portfolio, will benefit from more Glass Laminating Solutions/Vinyls No job losses are planned. consistent earnings growth and activities, part of its packaging & in- U.S. — Elementis Elementis Chro- Disclosure is required by the Toxic in September 2010. The company lower volatility and will have world- dustrial polymers division, to Japa- mium, one of the world’s larg- Substances Control Act (TSCA) as has manufactured and distributed U.S. — The separation, which leading businesses, solid fundamen- nese specialty chemicals and fibers est manufacturers of chromium the substance has been identified chromium-based chemical sub- follows a “thorough strategic re- tals and well established positions producer Kuraray for $543 million, chemicals in the world, has been as a carcinogen. stances and mixtures for more than view process over the last year,” is in attractive markets. The TiO2 plus the value of the inventories. The fined $2,571,800 for failing to dis- The EPA’s complaint against the 35 years and has plants in Castle “clearly the best option to deliver market has been on a rollercoaster sale is expected to close during the close information about the nega- New Jersey-based speciality chemi- Hayne, North Caroline and Corpus enhanced value to shareholders,” ride, with prices falling more than first half of 2014 pending regulatory tive health effects on workers of cals producer was filed with the Of- Christi, Texas. (dw) CEO Ellen Kullman said when an- rising but recently has been seen as approvals. (dw) exposure to hexavalent chromium. fice of Administrative Law Judges ▪ nouncing the plans. The company headed for recovery. Shortly before ▪

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Energy Costs and the European Chemical Industry EC Debates Legality of Subsides for Energy-Intensive Manufacturers

Competitive Edge – The Europe- At the same time, the European gas prices are around half to a third Commission is investigating whether lower than in Europe. an chemical industry would like to be the EEG exemptions for producers “It would be unrealistic to expect exempted from any additional energy of petrochemicals and base chemi- gas prices to drop as much as they costs stemming from state subsidies of cals and other energy-intensive have in the US because of shale gas,” manufacturers are legal under Eu- said Bock at the BASF press briefing renewables. Without being freed from ropean Union rules on state aid. in London. “But additional supplies the need to pay surcharges on their of gas from shale gas reserves will Inappropriate State Aid? introduce more flexibility in the Eu- electricity bills to pay for the develop- ropean gas market.” ment of renewables, it fears its energy If the Commission’s investigations “The UK government is more intensive plants will in the long term conclude that the exemptions are supportive of shale gas production inappropriate state aid, it will then than the German government is,” he suffer a damaging loss of international carry out a further examination continued. competiveness. about whether they breach compe- Wintershall, BASF’s oil and gas tition rules. The result could be that subsidiary, had been using fracking The German system under which by early next year not only will the techniques in Germany for extract- producers with energy intensive Commission prohibit the exemptions ing natural gas from tight reservoirs sites making chemicals and other but also demand repayment of the with the aid of pressurized water, products like steel and cement are EEG surcharge reductions amount- sand and chemicals. excused from renewables-related ing to millions of euros. “In 50 years we have not had one payments is seen by the industry as “If the Commission decided that single incident of fracking causing providing a benchmark. Much of the European regulations had been ground water pollution,” Bock ex- costs of renewables subsidies have broken to that extent it could do a plained. “Yet the German authori- been shifted in Germany onto the great deal of financial harm to the ties will not give us a permit to drill shoulders of residential electricity German chemical industry,” said Dr. for shale gas because of the public’s consumers. Kurt Bock, chairman of BASF and worries about fracking.” “We consider exemption systems Cefic president, at a press briefing BASF’s Ludwigshafen headquarters from above. “If the new German government’s reform of the renewables schemes is not done properly, it could have The shale gas boom in the U.S. had like that in Germany as being neces- organized by his company in Lon- dramatic consequences for the international competiveness of the German industry,” said BASF CEO Kurt Bock. highlighted the vulnerability of ener- sary where European countries are don in November. gy intensive sectors, like chemicals, in going down the path of subsidized BASF, the world’s chemicals Europe to competition from countries development of renewables as a company, could stand to lose con- He stressed the need for a more Shale Gas Expectations did not take into account shale gas with low-cost energy resources. source of energy,” says Peter Bot- siderable sums merely as a result of closely integrated energy sector in would not be credible,” Europe needs to develop its own shek, energy, health, safety and en- possible changes to the EEG intro- Europe. A disjointed market has led The association is also strongly sup- “We expect that as a result of shale gas supplies to underpin the vironment director at the European duced by the coalition government to Germany, for example, paying porting moves by the UK govern- exploration drilling next year, com- future of its own base chemicals sec- Chemical Industry Council (Cefic), partners. neighboring countries to take excess ment to encourage energy compa- mercial production schemes will go tor. But it also requires measures to Brussels. They could, for example, abolish output from renewable sources like nies to start drilling for shale gas in ahead to come on stream by 2018,” protect the chemicals industry from Relief from the costs of renewa- a provision in the legislation which wind and solar power which could the country with the aim of commer- he added. the long-term additional costs of es- bles development could be incorpo- grants relief from surcharges for not be absorbed by its domestic us- cial production before 2020. Cefic believes that shale gas pro- tablishing a decarbonized economy. rated within a uniform energy policy self-generation plants like the two ers. “Shale gas will not be a magic duction in the main European coun- across the European Union, which the company has at its main site at “Belgium has been shutting down bullet in the UK,” said Steve Elliott, tries with shale gas reserves — like Sean Milmo, freelance science and would prioritize the need to allevi- Ludwigshafen, Germany. gas-fired power plants because it CIA chief executive. “But the re- France, Denmark, Sweden, Germa- business journalist, Essex, UK ate the energy costs of key manufac- “That would add as much as €350- has been able to get energy from serves of it in the country are large ny, Netherlands, Poland, Romania turing sectors like chemicals. How- 400 million to the costs of the running Germany for nothing,” said Bock at enough to have an impact on energy and the UK — will put downward ever Cefic’s strategy of pushing for the plants, which would make them the Munich meeting. “We are in fa- prices and to boost the chemical in- pressure on gas prices, although not bit.ly/energy German-style exemption schemes in uneconomical,” said Bock. vor of a more European approach dustry. A UK energy policy which to the extent it has in the U.S. where the face of the strong growth in the He stressed that the biggest dan- on energy policy. Yet what we are subsidies for renewables is begin- ger of an abolition of the exemptions seeing is a fragmented one in which ning to become unstuck. for energy-intensive plants would be EU countries are following their own that they made the German petro- agenda and setting their own priori- Reform In Germany chemical and base chemicals sec- ties.” tor uncompetitive internationally Chemical industries in countries Following the German general elec- and handicapped in their ability like the UK have been trying to per- tion in September, the prospective to attract investment. Bock’s state- suade their governments to set up partners in a new coalition govern- ments in London echoed views he for heavy electricity users’ exemp- ment – Christian Democratic Party expressed at the Cefic general as- tion schemes from renewables sur- (CDU) and Social Democratic Party sembly in Munich in October where charges similar to the EEG system (SDP)—have been thrashing out an he warned about the impact of high in Germany. agreement on a reform of the 2011 energy costs on the future of the “We would like to achieve levels Renewable Energy Sources Act German and the European chemi- of exemptions similar to those in (EEG). cal industries. Germany, where energy intensive in- The EEG lays down rules for dustries are paying only 5% of total January 21-24, 2014 Miami Beach, FL USA both feed-in tariffs that grid opera- BASF Demands Level Playing Field costs of the development of renewa- tors must pay for renewable energy bles,” Nick Sturgeon, energy, trade and exemptions for energy-intensive “If the new German government’s and competiveness director at the manufacturers from surcharges reform of the renewables schemes UK Chemical Industries Association imposed on electricity consumers is not done properly, it could have (CIA), told a press briefing in London to pay for the tariffs. The difference dramatic consequences for the in- in October. between the feed-in tariffs and the ternational competiveness of the The CIA is seeking compensation market value of the energy provided German industry,” Bock stated dur- for the extra energy costs passed on by renewables has amounted to an ing a panel discussion of experts at by power companies as a result of annual subsidy of around €20 bil- the assembly on energy costs. “The having to pay an obligatory basic lion. Heavy electricity users like European chemical industry must feed-in tariff for renewables. It also commodity chemical producers may have a level playing field interna- wants rebates for higher electricity now have to pay a larger share of tionally with energy issues. We are prices resulting from the building in the subsidy bill following a deal by a global industry competing against the country of new nuclear power the coalition partners. companies outside Europe as well.” capacity.

Uniform EU Framework for Shale Gas Needed REGISTER FEEDSTOCK Commissioner Demands Clear Regulatory Approach to Unlocking Gas Reserves

EU environment commissioner Janez those suggested in the Golden Rules mented and complex operating of the International Energy Agency. framework” that is not helpful to Potocnik has called for a uniform risk Along with establishing legal clarity, those seeking to reap the benefits. management framework for shale gas the objective would be to establish While creating a level playing field exploration across member states. good practices such as disclosure within, the commissioner stressed of chemicals, baseline monitoring of that a “certain degree of flexibility” water, hydrogeological modeling, well also is needed. “We are well aware Brussels — Addressing a recent en- integrity and capture of methane, that local features matter a lot, as ergy summit, Potocnik said it is “ex- along with monitoring and cleanup. many of the risks depend on the geo- tremely important” that the public Potocnik noted that the existing EU logical and geographical features of Where R&D, Procurement, and Custom Manufacturing Connect. accept unconventional fossil fuel ex- framework , while “appearing to ap- a project.” One of the dangers of not ploration. He cited recent European ply to shale gas,” does not necessar- having a uniform framework, Potoc- Commission surveys, in which three- ily address the specific impacts and nik said that national interpretations quarters of respondents said they risks, as it was designed before the could be legally challenged and the www.informex.com In Partnership with: would be worried if a shale gas pro- technology became widely available. internal energy market jeopardized. Find Us: ject were to be located in their neigh- The European approach to regu- “Whether shale gas becomes a borhood. This, he said, was because lating shale gas must be clear and success story in Europe,” the en- of the lack of adequate legislation simple to understand, implement and vironment commissioner said, “we and proper risk management.The achieve, he said. As member states need to be consistent with our long- #myinformex commissioner said EU officials are have taken differing approaches to term strategy of a low-carbon, re- eyeing proposals along the lines of regulation, it has created a “frag- source-efficient economy.” (dw) ▪

chemanager-online.com/en Page 4 MARKETS & COMPANIES CHEManager Europe 11-12/2013

China’s Quest for Sustainable Growth In Move Toward Consumption-Led Economy, Specialty and High-End Chemical Segments Will Further Expand

A World Leader – The chemical in- dustry in China is both a key driver and prime beneficiary of remarkable GDP Vir Lakshman Head, Chemicals & Phar- growth. In the last decade, significant maceuticals Germany, investments in capacity and technol- KPMG ogy have propelled China’s chemi- cal industry to the forefront of world producers. In 2010, Chinese chemical output exceeded American output for Rita Duran Senior Manager, Chemi- the first time. cals & Pharmaceuticals Germany, KPMG

Moving to Modest Growth Rates By 2020, China aims for 15% of its gross domestic product to come Between 2007 and 2012, revenues from seven strategic industries for China’s chemical industry grew (new-generation IT, energy saving at a compound annual growth rate and environment protection, new (CAGR) of 21% to reach $1.2 trillion energy, biology, high-end equipment in 2012. In comparison, over the manufacturing, new materials, and same period, the Japanese and In- hybrid and electric cars), the major- dian markets grew at a pace of 4% ity of which use products from the CAGR to $230.2 billion and 13.8% chemical industry. In response, in- CAGR to $100 billion respectively. dustry managers are now focused Despite a changing policy en- on strengthening and developing vironment and slowing economic electronic chemicals, fluoro coat- growth in China, the long-term ings, food additives, eco-friendly growth prospects for the chemical adhesives, plastic additives and industry remain high and are ex- water-treatment chemicals. pected to reach a volume of $1.9 trillion in 2016 — at a CAGR of 13% Investing In R&D from 2012 to 2016. This is a more modest growth rate as a more ma- Chinese companies spend 3% to 5% ture economy orients itself away of their revenues on R&D, improving from an investment-led model to a their ability to innovate and incor- model that focuses on consumption porate technological changes into and services. their production processes. For ex- © pavalena - Fotolia.com ample, in 2012, the Wanhua Chemi- Driving Growth with Chinese Urbanization cal Group spent 4% of its revenues on R&D. It focused on revitalizing China. Giants such as BASF, Dow, yurethane raw materials producer, nificant challenges such as remotely ing schemes to curb greenhouse gas To improve the geographic spread the national polyurethane industry Evonik, LG Chem and Mitsui Chem- entered the European market and located reserves, fresh-water scar- emissions with the help of a market of its industries, the Chinese govern- through the acquisition of technol- icals have announced aggressive expanded downstream by acquiring city, financial constraints, and envi- mechanism are planned. The chal- ment plans to develop its inland in- ogy and developing intellectual Chinese investment plans in both for €1.26 billion a majority stake in ronmental concerns around excess lenge for the government is to per- frastructure. It has set an urbaniza- property rights of MDI manufactur- production and R&D. For instance, BorsodChem Zrt, a Hungary-based waste and carbon emission. suade heavy industries, including tion target level of 60% by 2020 with ing technology. Another example is BASF plans to double sales in China chemical group involved in produc- Over the past few years, several the chemical sector, to balance profit less developed internal provinces Rising Sun Holdings (Risun) Group, to €12 billion by 2020 and will invest tion and processing of plastic raw foreign oil and gas companies, in- growth with environmental protec- catching up with the more devel- China’s largest coal chemical prod- €10 billion in the Asia Pacific region, materials and isocyanate. cluding Shell, Chevron, Hess and tion. Companies in the chemical, oped southern and eastern coastal uct manufacturer. Risun established mainly in China, from 2013 to 2020. Zhejiang Longsheng Group (Lon- ExxonMobil, have partnered with steel and cement sectors have ex- provinces. According to China De- its strength in a new sector using Evonik, a specialty chemicals com- sen) has a bold strategy of interna- China’s state oil firms PetroChina pressed willingness to participate in velopment Research Foundation, by advanced technology from Germany pany, plans to double revenues to tionalization. In 2010, it acquired and Sinopec Corp. to explore and carbon-emissions trading, but fun- 2020 investment in infrastructure is and other patented technology from €2 billion by 2015. From 2011 to German-based DyStar. With this eventually produce shale gas. Chi- damental structural problems need expected to reach more than $3.6 international research institutes. 2015, Evonik will invest more than acquisition, Lonsen became the na’s goal to produce 6.5 billion cubic to be resolved before the scheme trillion. China’s commitment to R&D has €350 million in specialty chemicals world’s largest textile chemical pro- meters of natural gas from shale by can succeed. Steady urbanization, infrastruc- risen and is expected to increase by in China. ducer, controlling more than 20% of 2015 is proving a challenge. High Despite the challenges, continued ture investments and a large Chi- 11.6% in 2013, following an 11.3% Examples of major chemical in- the global market, and also contrib- well costs and poor investment re- urbanization, public and private nese middle class with growing increase in 2012. The country is vestments, sorted by capacity, are uted to improving Chinese chemical turns have held back digging. Re- investments as well as industrial household income driving demand investing in all aspects of R&D at listed in the table below. brands internationally. Lonsen ben- serves are located in difficult-to- restructuring ensure the chemical for consumer, auto, IT and electronic record rates. It already has more efited highly from DyStar’s valu- access hilly terrain and are much industry in China is well poised for products will provide ample growth scientists and engineers than the able patents, brands, network, sales deeper (4-6 kilometers, compared sustainable growth. opportunities for the chemical in- U.S. and its share of technical papers Investing In Internationalization channel and technology. with 2-4 kilometers in the U.S.). dustry. has steadily increased in the past 10 Moreover, fracking technologies years. Much has been said about the To establish themselves as world- Securing Feedstock For Growth that proved successful in the U.S. Vir Lakshman, head of Chemicals Shifting to Higher Value Specialty Chemicals modest quality of China’s technol- class chemical companies, domes- require large amounts of fresh wa- & Pharmaceuticals Germany, ogy paper output, but in many areas, tic chemical companies also look China’s technically recoverable re- ter, which is a constraint in China. KPMG The more China moves toward a such as materials science, chemis- to overseas investments. In a break serves are estimated at 25 trillion Also, the ethane content from these consumption-led economy, the high- try and engineering, China is now a from the past, natural resources cubic meters, 50% larger than those reserves remains unknown, being a Rita Duran, senior manager, er the demand for high-end sophisti- global leader. now account for around 60% of of the U.S. potential logistical and transporta- Chemicals & Pharmaceuticals cated products and advanced mate- overseas investments, compared China has recently made sig- tion challenge. Germany, KPMG rials will be, resulting in the growth Investing In Fixed Assets with 75% in 2010. Although Asia nificant investment in leveraging of specialty and high-end chemical remains the leading investment its large coal reserves (about 115 Environmental Protection segments. The chemical sector in To capitalize on the growth pros- destination, acquisitions in Europe million tons) as a feedstock for the 22 Contact: China is still a net import market. pects, Chinese as well as foreign and North America have noticeably petrochemical industry. According China has pledged to reduce carbon Vir Lakshman, KPMG, Duesseldorf, Germany During 2012, the country imported chemical companies have made sig- increased in the last few years. Chi- to IHS Chemical, more than 120 dioxide emissions by 40% to 45% Tel.: +49 211 475-6666 almost 10% of its specialty chemicals nificant capital investments. Fixed na started making a move toward coal-to-chemical projects have been per unit of GDP by 2020, compared [email protected] and more than 50% of its electronic asset investments in the first half of Europe in 2007, and the trend of announced in China. From 2013 to with the levels in 2005, but it still www.kpmg.com chemicals. To close the gap, China 2013 were up 20.1%, year on year. focusing on targeted downstream 2020, almost 20 million metric tons relies heavily on energy-consum- plans to increase its self-sufficiency Many multinational chemical acquisitions will continue. per year of coal-based olefins capac- ing, high-polluting industries for in new chemical materials from 56% companies operate and earn a sig- For example, in 2011, the Wan- ity will be online in China. The coal- economic development and poverty bit.ly/China in 2009 to 76% in 2015. nificant portion of their revenue in hua Industrial Group, a Chinese pol- to-chemicals development faces sig- relief. Pilot carbon-emissions trad-

Examples of major chemical investments, sorted by capacity Company Location Product Capacity (mt/y) Region Capex Start-up Jinling Huntsman New Materials Jiangsu, China methyl tertiary butyl ether (MTBE) 726,000 East Part of €600m 2015 Keyuan Petrochemicals Guangxi, China acrylonitrile-butadienestyrene (ABS) 400,000 South NA Q4 2014 BASF Chongqing, China methyle di-para-phenylene isocyanate (MDI) 400,000 Inland €1bn 2014 INEOS Nitriles/Tianjin Bohai Chemical Tianjin, China acrylonitrile 260,000 Northeast NA Q4 2016 Jinling Huntsman New Materials Jiangsu, China propylene oxide (PO) 250,000 East Part of €600m 2015 Xingjian Tianye Xinjiang, China MEG (mono ethylene glycol) 250,000 Northwest NA Q3 2014 Invista Shanghai, China hexamethylene diamine (HMDA) 215,000 East NA 2015 Lanxess Jiangsu, China ethylene propylene diene monomer (EPDM) 160,000 East €235m 2015 Vinythai Jiangsu, China epichlorohydrin (ECH) 100,000 East NA H2 2014 Negromex Jiangsu, China styrene-butadiene rubber (SBR) 100,000 East NA 2014 BASF-YPC Jiangsu, China ethylene oxide; acrylic acid; butyl acrylate NA East NA 2014 Evonik Shanghai, China isophorone NA East €100m 2014 Evonik Shanghai, China hydrogen peroxide (H2O2) NA East €100m 2014

Source: ICIS, company websites Growth of fixed asset investments in China (c.f. table on the right). Note: The list is not exhaustive

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Cooperation Or Conflict? The Chemical Industry in China and the Middle East

Challenging The West – For most of the 20th century, the global chemical industry was dominated by Klent — Fotolia © Alex Dr. Kai Pflug the Western world (Western Europe, CEO, Management North America and Japan as an hon- Consulting orary member of the club). However, reduced the dependency of at least creasingly develop production tech- in the first decades of the 21st century, North America on imports. nology and assets, the current role other countries and regions — in par- In terms of production capabili- of the West as a contributor will be ticular the Middle East and China — are ties, some distinction can be made threatened. For the resulting two- between physical assets (i.e., exist- way cooperation between the Mid- challenging this dominance. ing chemical plants) and production dle East and China, the technology knowledge (both on a high level component will probably determine such as technologies for license the stronger position as the advan- Simplistically speaking, the chemi- and on the level of the skills of typi- tage in raw materials will always cal industry turns raw materials into cal chemical engineers). However, stay with the Middle East while marketable products via industrial in both aspects Western companies China will always have better mar- processes that require both physical have a clear lead as they have both ket access. The most likely outcome assets and technological know-how a much deeper base of intellectual is a situation in which most of the (fig. 1). In this regard, the chemical property and related knowledge and upstream technology up to base industry does not fundamentally dif- a broader and more highly devel- chemicals lies with the Middle East fer from other producing industries. oped portfolio of production assets. and the downstream/specialty tech- In contrast, the Middle East is nology with China. However, it is not Strengths And Weaknesses comparatively weak regarding pro- clear whether this will be acceptable duction capabilities and still primar- for the chemical state-owned enter- For the chemical industry, oil and ily relying on Western expertise as prises, whose current strength is gas will probably remain the most the region historically lacks both more on basic chemicals technology. important bottleneck among the raw experiences with production in gen- In conclusion, both the Middle materials in the next few decades. eral and a long-established educa- East and China need each other as Of course there are other important tion system to provide a sufficient their strengths in raw materials and raw materials as well, particularly number of qualified scientists. market access complement each © Stauke - Fotolia.com for inorganic chemicals and for spe- China’s expertise is already a bit other. Cooperation may be facilitat- cific areas such as fluorochemicals more developed, but focused mostly ed by the somewhat similar govern- or rare earths, but generally these on basic chemicals, particularly in Table 1 summarizes the relative For the Western world, shale gas the overall global chemical indus- ance status of the key companies on are either more evenly distributed the state-owned companies. In con- contribution of the three regions to will lead to a divergence in develop- try: raw materials (Middle East), both sides — the respective govern- globally, or of lower importance to trast, in high-value areas such as the global chemical industry. ment between the U.S. on one side and markets (China) and production ments heavily dominate both. the industry, or both. In addition, specialty chemicals, China still lacks Europe/Japan on the other side. Shale technology (West). This opens the Conflicts may arise over where there are attempts to replace pet- the knowledge and assets to provide Trends gas increases the raw materials sup- way for collaboration between the exactly to hand over the value-cre- rochemical value chains by those a broad and diversified portfolio de- ply in the U.S. and will therefore also regions, which has already begun, ation process from the Middle East based on bio-sourced materials, but spite strong political will to move in In the medium term, these contribu- lead to higher investment in produc- for example the three-way coopera- to China. This will be decided both at current prices these are probably this direction. tions are likely to change somewhat tion assets while the larger scarcity of tion between Shell, PetroChina and by the alternatives both parties have not fully competitive yet. Overall, the West is still the key (table 2). China is likely to develop suitable raw materials in Europe and Qatar Petroleum to build a refinery (and thus their respective bargain- Among the three regions exam- knowledge-carrier the rest of the much stronger production capa- Japan will probably lead to a long- in Zhejiang. ing positions), and their technology ined, the Middle East clearly has world relies on, be it via imitation, bilities both on the level of assets term loss in production assets there. In the long run, given the de- level. Very high-volume bulk chem- the best position regarding the most licensing or hiring of expats. and the level of know-how, while velopments anticipated in table 2, icals will likely be more suited to important chemical raw materials. As for customers and markets, the Chinese chemicals markets will Consequences there is also a distinct possibility for production in the Middle East while The abundance of oil and gas is the the main development in the last also further increase in importance. cooperation only between the Mid- highly specialized or customized, region’s main competitive advantage decade has been China becoming (Despite the recent slowdown of Currently each of the three regions dle East and China. As both these low volume, labor- and research- as these resources by far exceed the biggest chemicals market in the the Chinese economy, growth is still has a fairly specific contribution to regions (and particularly China) in- intensive chemicals are more suited the resources of these and related world. This is China’s biggest asset, much higher than in most other re- to production in China. Chemicals raw materials (e.g., coal) in other and it obviously includes not only gions). somewhere in between will be the regions. those chemical products consumed The Middle East is massively ex- Table 1: Current Core Contributions to Chemical Industry by Region most interesting to watch. In contrast, China — though a by Chinese end customers but also panding its production assets, trying (+++ very high, o low) big oil producer itself — strongly those used for production of finished to move downstream in the chemi- Region Core Contributions to Chemical Industry depends on import of petrochemical goods that are later exported from cals value chain to capture a larger Dr. Kai Pflug, CEO, Management Raw materials Production Markets raw materials, and this is unlikely to China. share of the overall value created Consulting — Chemicals change despite the strong political In contrast, the local chemicals in petrochemicals. However, in the Technology Assets will to self-sufficiency and progress markets of the Middle East are rela- near future this shift will be more China + + ++ +++ in coal chemistry and bio-based ma- tively irrelevant. on the level of assets (which can be 22 Contact: Middle East +++ o + O terials. Finally, the Western world is established in a few years) than on Dr. Kai Pflug Western World + +++ +++ ++ The Western world is also gener- certainly an important market for the level of knowledge on all rele- Management Consulting – Chemicals ally a net importer of petrochemical chemicals, particularly for those vant levels (which will probably take Hong Kong, China raw materials, though the more re- focusing on higher-end market seg- decades or more). Table 2: Trends for core contributions to chemical industry by region Tel.: +86 1 36 81 87 39 92 cent developments in shale gas have ments. (↑↑↑ very strong increase, → no change, ↓ decrease) [email protected] Region Core Contributions to Chemical Industry www.mc-chemicals.com Raw materials Production Markets Technology Assets China → ↑↑ ↑↑ ↑ Middle East → ↑ ↑↑↑ → Western World →(EU) ↑(US) → ↓(EU) → bit.ly/China Fig. 1: Schematic Value Creation Process of the Chemical Industry ↑(US)

China Targets New Markets for Fuel

China — From Africa to Australia, by next year, traders said, more than ISOLATION. CONVERSION. PROTECTION. Chinese refiners are exploring new double the average so far in 2013. markets to ship surplus oil prod- This sharp turnaround could mean ucts such as jet fuel and diesel, put- refining margins in Asia are squeezed ting them on track to compete with by the new supply, which could also global trading houses and refining make prices of fuel exports cheaper. centers such as Singapore. The increased shipments come just The switch to being a grow- as new refineries are also coming on ing exporter of fuel comes despite stream in the Middle East next year China recently becoming the world’s and with higher U.S. exports. largest net oil importer. The open- China’s refining capacity was ing of more refineries to process close to 12 million barrels per day oil has emerged just as the world’s by the end of 2012 and is set to second-biggest economy shifts down grow by about 3 million bpd be- a gear so there is less demand for tween 2013 and 2015, according to Signal conditioners for optimal plant processes some transport and industrial fuels, industry officials and media, more ʑ Protection against signal noise caused by ground loops which are more sensitive to the pace than double India’s capacity.Overall ʑ Conversion into standard signals for universal use in control systems of growth. fuel demand in China was about 9.79 ʑ 6ignal splitting for parallel signal use by diʖerent systems This has driven China’s biggest million bpd last month, according to refiner Sinopec Corp and its domes- Reuters calculations based on pre- tic rivals to look outside traditional liminary government data. markets, such as Vietnam and Hong Demand for gasoline and diesel Kong, to sell surplus cargoes, sourc- is set to rise by 617,000 bpd and es close to the matter said. 718,000 bpd, respectively, over the www.pepperl-fuchs.com/signalconditioner Chinese diesel exports could next five years, according to esti- reach 3.7 million barrels a month mates by JBC Energy. ▪

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Effect of Global Shale on the GCC Assessment of Regional Shale Development

Hydrocarbon Building Blocks The problem is that the time for bar- deposits have already been identi- gas in the foreseeable future, it can gains in this market is over, thus any fied, mostly in Saudi Arabia, Oman, be cost-competitive compared with – Exploitation of shale deposits in the investments require careful evalu- Kuwait and the UAE (fig. 1). imported LNG and hence fill the gas U.S. has risen quickly and will contin- ation. Development of unconventionals gap in concerned countries like Ku- ue to intensify in the coming years as Despite this, there are presum- in the GCC is in its infancy. Only a wait, Saudi Arabia and United Arab Dr. Sven Bugarski Oliver Gawad ably significant unconventionals few exploratory measures and test Emirates (figure 2). Using oil as a Stratley Stratley technology and expertise improve and opportunities in the GCC countries. wells have been performed so far. substitute for gas, e.g., for energy extraction costs decline. Gulf Coopera- From both geological analysis and Promising indications of available production in countries with abun- the U.S. is forecast to become a net The U.S. will maintain its com- already existing exploration data, it resources and manageable costs are dant oil, is not reasonable because tion Council (GCC) countries must build liquefied natural gas (LNG) export- petitive advantage in shale gas as is clear that the likelihood of high expected to drive further explora- of the much higher price per million on their hydrocarbon background to er by 2020 at the latest, and in the a feedstock and energy carrier at concentrations of gas, NGLs and oil tion and yield more detailed data. Btu for oil. extend their coverage of the chemical same year will satisfy domestic oil least until 2020, in particular when in shale formations is highest in ar- Assuming that abundant resourc- If shale resources in GCC coun- demand to a large degree via its compared with Europe and East eas with abundant conventional re- es lie below the Arabian Peninsula, tries are wet, as experts assume, value chain until they may be able to own regional sources. Furthermore, Asia. Prices for natural gas in 2013 sources. Indeed, first estimations of the main success factors for large- the incentive to explore and ex- tap into their own shale plays. polyethylene exports are expected are (average January-June) $4 per shale resources in the GCC confirm scale production of unconventionals tract NGLs in addition to methane to nearly double in the period from million British thermal units in the that, with more than 700 tcf of shale are supportive politics and regula- becomes even more attractive. 2013 to 2020. U.S., $12 per million Btu in Europe gas, including supposedly significant tions, as well as competitive produc- Firstly, NGLs are priced well above Before discussing any implications Other countries pursue explora- and $16 per million Btu in Japan. amounts of NGLs and shale/tight oil, tion costs. Due to the long history methane, and byproduct credits of the shale boom on GCC coun- tion activities and production plans Because of the high costs for the regional resource opportunities of the hydrocarbon business, high could reduce break-even costs by tries, it is reasonable to briefly de- for unconventional gas and shale/ liquefaction and transport of LNG, are tremendous. dependence on energy and down- up to $5 per million Btu. Second- scribe global developments in this tight oil to very different degrees. global arbitrage will reduce these Resources are only real oppor- stream feedstock, and the lack of ly, ethane would be available as field. While the U.S. had negligible Countries with expected commer- interregional price differences only tunities if they become reserves strong public opposition (unlike, for cracker feed. This is very important production rates of shale gas and cial projects for unconventional gas by a few dollars per million Btu. (economically extractable), and this example, in Europe), GCC govern- for cracker operators in Saudi Ara- shale/tight oil as recently as five to production in the long term include Availability of large volumes of is the critical issue. Why should a ments have a supportive mindset bia, who have had difficulties with 10 years ago, production rates from (all figures are estimations for 2020 hydrocarbons at low prices drives region historically blessed with one and will presumably handle regula- allocation of sufficient ethane for shale in 2012-2013 are impressive: in tcf/year, with shale gas being a investments in power production of the world’s largest concentra- tions pragmatically to enable large- full-capacity utilization in previ- ▪▪ Methane: 170 million tons/year (≈ substantial part in most cases) Can- from gas, ethane crackers and tions of inexpensively accessible scale projects. The cost issue is more ous years. The current approach 8.5 trillion cubic feet [tcf]/year) ada: 3.5 tcf/year, China: 2.8 tcf/year, chemical plants producing ethylene conventional oil and gas deposits be challenging and certainly deserves to base new cracker projects on ▪▪ Natural-gas liquids (NGLs): 18.5- Australia: 2.1 tcf/year, Europe (all derivatives, fertilizers and other interested in extracting more-costly a quick analysis of the influencing more-expensive mixed feedstock 37 million tons/year (≈ 0.5-1 mil- countries): 0.3 tcf/year, Mexico and products that have the “shale gas unconventionals? factors. could in the long run be replaced lion barrels/day) Argentina: 0.2 tcf/year each. In con- advantage.” As a consequence, a Costs for shale gas production by a trend to use ethane as a pre- ▪▪ Shale/tight oil: 95 million tons/ trast, shale gas production in the U.S. number of affected production sites, There are four main reasons: are driven by the geology (especially dominant feedstock again. Ethane year (≈ 1.9 million barrels/day) is expected to exceed 11 tcf/year by especially in Europe, are already ex- ▪▪ Deposits of cheaply extractable depth of shale formation), topogra- from shale may cost up to $700 per 2020 and hence will dominate global periencing declining margins and it oil and gas are declining, espe- phy, water availability, technology ton (≈ $15 per million Btu) to yield Among other reasons, significant production volumes in shale gas. is expected that older and less effi- cially outside Qatar. and infrastructure. A significant part ethylene at similar cost to ethylene improvements in drilling, frack- As the wetness of the basins out- cient crackers and basic chemicals ▪▪ Production rate of associated gas of the deposits in the GCC (for exam- from regional naphtha crackers. ing and overall extraction technol- side the U.S. is not yet sufficiently capacities in Europe will be shut is limited by oil production rate. ple, in the empty quarter) is located The quick cost assessment above ogy have made this boom possible. known, NGLs and shale/tight oil down in the medium term. ▪▪ Demand for gas in the region is in unfavorable desert environments, indicates that if prospective wet Learning-curve effects (typical ex- production projections outside high and increasing. which is a serious obstacle for prof- basins are found in GCC countries, ample in Marcellus: decrease of well the U.S. remain highly speculative. Opportunities in the Unconventionals Boom ▪▪ Access to Qatar’s gas surplus is in itable well development. Moreover, ethane production costs below costs from $8 million to $4 million However, given the time required competition with global demand. 5 million to 20 million liters of water $700 per ton are realistically pos- within a larger project) will lead to for exploration and developing the Investments in involved companies, per well are currently required, and sible (fig.3). further cost reductions and yield in- infrastructure to produce, fraction- plants and other related projects in These reasons explain why there water is scarce. According to recent forecasts, the creases, which will ensure that the ize and transport NGLs from shale North America are an obvious op- is a gas shortage among GCC Despite the challenges, there gas shortage will become more se- boom will last beyond the period of and/or tight oil, it is reasonable to tion to participate in the U.S. boom. countries (except Qatar), both for is room for optimism. Because of vere in the GCC (except Qatar) in the picking only the lowest-hanging “un- state that no region outside the U.S. Qatar Petroleum, for example, has methane as an energy carrier and their large conventional oil and gas coming years. This will presumably conventional fruits.” will reach production rates with a acquired exploration and produc- for ethane as a feedstock for re- sector, GCC countries have oil and drive exploration for unconvention- Because of the massive increase global market effect until 2020 at tion assets from Suncor Energy gional ethane crackers. Regions gas infrastructure, services and als and — if first findings are prom- in domestic oil and gas production, the earliest. together with its partner Centrica. with shale gas and shale/tight oil staff that facilitate building up an ising — lead to large-scale com- unconventionals business. In ad- mercial projects across GCC closer dition, sufficient unconventionals to 2020 than 2030. Oman even has areas are accessible and new con- ambitions to go commercial in the cepts are being developed to re- production of unconventionals al- duce water requirements through ready in 2017. recycling or fracking without wa- ter (“dry-fracking”). According to Dr. Sven Bugarski and Oliver Gawad, our analysis and experiences from Stratley other regions, shale gas extraction costs might initially be around $15 per million Btu, slightly above the 22 costs in the early U.S. shale boom Contact: days. These costs are expected to Dr. Sven Bugarski decrease in the short term to $10 Stratley AG per million Btu in favorable loca- Cologne, Germany tions and might further decrease Tel.: +49 221 977 655 0 with progress on the regional and [email protected] local learning curve. www.stratley.com

Commercial Production Stratley has co-published parts of this article with GPCA for the 8th Annual GPCA Experts frequently give 2020 to Forum in Dubai. 2030 as the time frame in which unconventionals will be broadly pro- duced commercially in GCC coun- tries. It is important to keep in mind that, while local unconventional gas will not be cost-competitive com- bit.ly/shale-gas Fig. 1: Unconventional gas (mostly shale/tight gas) and unconventional oil (mostly shale/tight oil) areas in GCC countries. As exploration data so far is very limited, only selected and prospective plays are shown. pared with regional conventional

Fig. 2: Comparison of costs per energy content: oil, LNG imports in the GCC, the resulting shale gas cost window and conventional gas produced in the GCC. Byproduct credits not considered. Fig. 3: Ethylene cash costs in the Middle East for the feedstocks naphtha, ethane from shale and conventional ethane.

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Dow Prepares to Sell Chlor-Alkali and Epoxy Units La Seda Asset Sale Now in Progress

PORTFOLIO Company to Break Business into 3 Parts to Facilitate Sale Spain — The sale of assets owned receiver, Forest Partners has said reportedly waiting in the wings for by bankrupt PET producer La Seda the recycling firm, which operates at least one of the La Seda group As part of plans to “right size” its chlo- chlorine and caustic soda capacity de Barcelona continues apace. The a plant at Beaune, France, is strong companies already being wound at Freeport, replacing volumes with Barcelona commercial court han- enough to stay afloat if given an in- up, with four companies said to be rine footprint to meet its needs in output from the start-up of the joint dling the insolvency proceedings jection of fresh equity and a credit planning bids for the 200,000 t/y downstream markets, Dow Chemical venture with Mitsui in 2014. recently opened the liquidation line observers see some hope that PET plant at San Giorgio di Nogaro, said it will carve out “a significant por- The chemical giant has retained process for the company’s wholly a buyer will be found. Recycling near Udine. Other assets in liquida- Andrew Liveris financial advisers to explore alter- owned recycling subsidiary Arte- subsidiary APPE in the UK is not in tion are based in Spain, Italy and tion” of its chlorine value chain over the CEO, Dow natives for the affected businesses, nius Green. As the court-appointed liquidation. Interested buyers are Turkey. (dw) ▪ next two years. including joint ventures, spin-offs stake in the joint venture with and divestitures. “Due to the highly U.S. — Concretely, this will involve Mitsui, which is currently building integrated nature of the chlorine Styrolution Consolidates Indian Holdings disposal of assets with $5 billion chlor-alkali facilities at Freeport. value chain, we are conscious not in annual revenue, including more The global chlorinated organics to leave any stranded costs or nega- India — Germany-based styrenics synergies, in particular in adminis- of capacity at the Dahej site to meet than 40 production units at 11 sites production facilities at Freeport tive synergies,” said executive vice producer Styrolution, the joint ven- tration, raw materials sourcing and growing demand from the white employing nearly 2,000 people. and Plaquemine as well as Stade, president Jim Fitterling, who will ture of Ineos and BASF, is merging supply chain management. goods and E&E markets. (dw) To facilitate a sale, the businesses Germany, also are on the chopping oversee the separation process and its two Indian subsidiaries, Styrolu- The company said the asset will be broken up into three parts: block as is the global epoxy business transaction activities. tion ABS (India) Ltd and Styrolution merger will allow it to evaluate op- epoxy, chlorinated organics and the with assets in the U.S., Germany, It- Explaining Dow’s forward strategy, India PVT Ltd to realize operational tions for future capacity expansion ▪ North American chlor-alkali business. aly, South Korea, China and Brazil. CEO Andrew Liveris said the plans re- Affected assets include the chlor- Supporting operations, including en- flect a continuation of the company’s alkali and chlor-vinyls facilities at ergy facilities, also are to go. shift toward downstream high-mar- German Firms Spend More in U.S. Than at Home, Says VCI Plaquemine, Louisiana, and Free- Altogether, Dow said it will shut gin products and technologies that port, Texas, U.S, including Dow’s down around 800,000 t/y of older generate higher returns.(dw) ▪ Germany – In another communi- billion. For the first time since 2001, renewed attractiveness of the coun- cation expressing its growing frus- it noted, foreign investments by Ger- try as a location for business, said tration with the lack of clarity as to man chemical company were higher VCI. It attributes the increased inter- Altana Places €200 Million the energy policy of the new German than at home. est to the start of the shale gas boom federal government still being ne- Much of German chemical pro- in 2009. At present, electricity prices Promissory Note to Refinance Loan gotiated, the chemical industry as- ducers’ capital spending is appar- are two and a half times higher than sociation Verband der Chemischen ently being shifted to the U.S. Over in the U.S., gas prices three times Germany — German chemical Altana’s chief financial officer The Bad Homburg-based firm Industrie (VCI) has published figures the past three years, the companies higher, the association believes. producer Altana said its promissory Martin Babilas said the success of the completed its acquisition of the suggesting that German chemical spent €6.5 billion on building new Cost increases for energy in Ger- note with a volume of €200 million paper is “a further consistent step in business on Oct. 1 for $635 million. firms are investing increasingly plants there or expanding existing many “put our companies under issued to partially refinance its ac- our financing strategy that aims at a To finance the deal, a consortium of abroad, where energy is cheaper. facilities, said VCI. Spending in 2012 strong pressure,” said VCI’s general quisition of Rockwood’s rheology sound basis for further growth and seven banks provided financing of The association said foreign fixed rose 54% to around €3.2 billion. manager Utz Tillmann, calling on business was four times oversub- flexible repayment options, along €300 million. Altana said the portion investments by German chemical The fact that over 41% (compared the German political sector to make scribed. Due to the strong demand, with favorable financing terms.” of the loan not refinanced via the companies rose by around 25% in with only 28% in 2005) of German the country’s move away from nu- the loan amount was increased from The new loan bears an interest rate note will be settled within the next 2012 to €7.7 billion, while domestic chemical investment abroad now is clear power and toward renewable €160 million during the issuing pro- of 2.1% and has debt maturities of two to three years directly from its capital spending stagnated at €6.3 earmarked for the U.S. underlines the resources “affordable.” (dw) ▪ cess. three and a half to seven years. cash flow. (dw) ▪ BASF Produces First Commercial Renewable Butanediol

Carbon Black Producer Cabot Fined Nearly $1 Million by EPA U.S. — BASF has begun offer- uct based on natural gas, butane, announced plans to lift global ca- ing its first commercial volumes of butadiene and propylene. pacity for BDO to 650,000 t/y and LEGAL Company Ordered to Invest in Antipollution Equipment 1,4-butanediol (BDO) produced from The German chemical giant cur- for PolyTHF to 350,000 t/y over the renewable raw material produced rently produces BDO and equiva- next two years. Cabot Corporation, the second largest operating required pollution tech- gitive emissions” result from leaks with dextrose-based fermenta- lents at its sites in Ludwigshafen, BDO and derivatives go into plas- nology. This, it said, was in violation or unintended releases of gases. To tion technology licensed from U.S. Germany and Geismar, Louisi- tics, solvents, electronic chemicals carbon black manufacturer in the U.S., of the New Source Review (NSR) address nitrogen oxide (NOx) pollu- bioplastics producer Genomatica. It ana, U.S., as well as Chiba, Japan, and elastic fiber for the packaging, has been fined $975,000 by the Envi- provisions of the Clean Air Act (CAA) tion, Cabot will be required to install said the quality of renewable BDO is Kuantan, Malaysia and Caojing, automotive, textile, and sports and ronmental Protection Agency (EPA). and resulted in increased emissions selective catalytic reduction technol- comparable to petrochemical prod- China. In July of this year, BASF leisure industries. (dw) ▪ of NOx and SO2. ogy, install continuous monitoring U.S. — Cabot has been ordered to The case is the first to result systems and comply with stringent invest some $84 million in state- from a national enforcement initia- limits. At the two larger facilities of-the-art antipollution equipment. tive aimed at bringing carbon black in Louisiana, it must address sulfur The company also will be obliged manufacturers into compliance with dioxide (SO2) pollution by installing to spend $450,000 on energy sav- the antipollution legislation. The Lou- wet gas scrubbers as well as install- PremiumPremium ProcessProcess PumpsPumps ing and pollution reduction projects isiana Department of Environmental ing continuous monitoring. In addi- that will benefit the communities Quality, a co-plaintiff in the case, will tion, the Texas facility is required to forfor thethe OilOil andand GasGas IndustriesIndustries surrounding the facilities. receive $292,500 of the penalty. comply with a limit on the amount In its action against Cabot, the At all three plants, the settlement of sulfur in feedstock which is the agency alleged that between 2003 requires that the carbon black pro- lowest for any carbon black plant acc.acc. toto APIAPI 610610 andand APIAPI 685685 and 2009 the company made major ducer improve existing controls for in the United States. The EPA said modifications at its three produc- particulate matter or soot, operate the measures should reduce NOx tion facilities in Franklin and Ville an early warning detection system emissions by about 1,975 t/y, SO2 Platte, Louisiana, and Pampa, Texas, that will alert facility operators to emissions by around 12,380 t/y, and without obtaining pre-construction any particulate matter releases and “significantly improve” existing par- permits and without installing and comply with a plan to control “fu- ticulate matter controls. (dw) ▪

Two Bidders Believed Still in the Running for Kem One

France — Two bidders are believed French industrialist and former als to a recent meeting of the Kem to be still in the running to acquire Rhône-Poulenc executive, Alain de One Joint Consultative Committee, Type PRM acc. to API 685 insolvent PVC producer Kem One Krassny, who currently owns Aus- which includes employee repre- from its current owner, the Klesch trian chemical producer Donau sentatives. The future owner of the group. Reports from France suggest Chemie, is said to be still in the PVC producer, which entered in- that U.S. private equity company race, while a bidding consortium solvency proceedings at the end of OpenGate Capital has the inside of French trade unions under the this year’s first quarter, is expected track and is already in talks with leadership of Confédération Géné- to be announced at a hearing of the the PVC producer’s current ethylene rale du Travail (CGT) is not given Commercial Court of Lyon on Dec. supplier Total about deliveries. much of a chance, and a second 12. Only the polymerization activi- OpenGate, which has acknowl- private equity firm, Sun European ties are up for grabs. The separately edged that it plans to exit the former Partners may have dropped out of held downstream processing busi- Arkema business as soon as feasible, the bidding. ness will be retained by Klesch. (dw) is said to have pledged €70 million, The latter two bidders had de- including a €50 million loan, to get the clared themselves not yet ready to company back on a secure footing. present their turnaround propos- ▪

Germany’s Merck Adds Israeli R&D Partners

Germany/Israel — Merck KGaA significant therapeutic targets for in the Nofar program of Israel’s Min- has added two new partners, the treatment of multiple sclerosis (MS). istry of Industry and Trade. newly created Metabomed and the Strategic investments in external The company’s biopharmaceu- start-up ChanBio, to its €10 million innovation are key elements of Mer- ticals arm, Swiss-based Merck Se- Merck Serono Israel Bioincubator ck’s strategy, said Stefan Oschmann, rono, earlier this month signed a Type NCR acc. to API 610 research partnership focused on managing board member responsi- memorandum of understanding to pre-seed and seed opportunities ble for pharmaceuticals. “Our MS cooperate with Israeli biotech firm arising in Israel. Ventures fund demonstrates our Kadimastern, which develops hu- Metabomed, established by sci- commitment to creating long-term man pluripotent stem-cell related Where innovation is at home… entists at Tel Aviv University and relationships with and tapping into products. The aim is to find new the Technion Israel Institute of the innovative entrepreneurial spirit compounds as remyelinating agents Technology, specializes in cancer of biotech companies,” he added. for MS and possibly to expand the Dickow Pumpen KG metabolism and computational bi- Merck recently increased its stake collaboration into treatments for Siemensstraße 22, D-84478 Waldkraiburg ology. ChanBio plans to concentrate in Jerusalem-based Qlight Nanotech amyotrophic lateral sclerosis (ALS), Phone 08638/602-0, Fax 08638/602-200 on discovery of antibodies selective and said it may apply with “selected popularly known as Lou Gehrig’s E-Mail: [email protected] · [email protected] for ion channels considered to be Israeli partners” for research grants disease. ▪ Internet: http://www.dickow.de

chemanager-online.com/en Page 8 MARKETS & COMPANIES CHEManager Europe 11-12/2013

Accelerate Competency Assurance Tips for Faster Qualification, Expertise and Innovation

Speed = Advantage – Abun- combinations of games, project- and problem-based learning, structured dance of natural gas in the U.S., an ag- coaching and mentoring, communi- ing workforce, increased globalization ties of practice, and self-study. and tighter regulations have created Saidas Ranade Retain More Knowledge and Innovate Faster new competitive pressures on the Eu- Director, GP Strategies ropean chemicals industry. Compared with qualification and ex- Rethink Competency Mapping pertise attainment, the processes for expertise transfer and for develop- Skills development, knowledge re- Innovation, knowledge retention ing innovation capability are more tention and innovation have been and skills development have been chaotic. Their success depends on identified as solutions. All three identified as possible solutions to competency assurance and other require a deeper understanding address competitive challenges, op- systemwide factors like organiza- of existing and missing workforce portunities and uncertainties. Each tional design, policies and culture. competencies. This article shows of these proposed solutions requires Here are a few recommendations how to get better at mapping a deeper understanding of exist- specific to the training and devel- competencies and implementing ing and required future workforce opment part of the solution: successful competency assurance competencies. The process for com- programs. petency mapping and assurance is ▪▪ Coaching and mentoring are ef- well established. fective modes for transferring im- Current Competitive Landscape ▪▪ Define existing and future job plicit knowledge. Do not assume that roles coaching and mentoring will happen In the mid- to late ’90s the European ▪▪ Perform job task analyses naturally and effectively without chemicals industry began respond- ▪▪ Define a list of competencies for support. Define coach and mentor as ing to a rising product demand each job role two separate job roles, and develop in Asia, decreasing margins and ▪▪ Define performance, knowledge competency standards and training mounting environmental pressures and skills standards for each for those roles just as you would for by restructuring, divesting and mov- competency a plant. The disciplines are different, Fix The Foundation business transactions, workforce other technical jobs. ing commodity petrochemical oper- ▪▪ Assess workers to discover com- but the function is the same. competency data do not change ▪▪ Future innovations needed are ations to the Middle East and Asia. petency gaps While this article uses the word Mapping and developing compe- every minute and can be transferred likely to be distributed rather than As a result, the European chemicals ▪▪ Bridge gaps with appropriate competency, the preferred term in tencies takes time. Executive com- in a batch fashion. centralized, multidisciplinary, op- industry retains the more knowl- training interventions Europe is competence. Competence mitment is important to this phase. portunistic and in nontechnical ar- edge-intensive parts of the chemi- is a stage in the development of a Subject matter expert (SME) time is Accelerate Qualification and eas. Include knowledge of cognitive cal value chain, making it even more Competitive advantage lies not worker from a novice to an expert. important in the design phase. Do Expertise Attainment sciences, social psychology, crowd- susceptible to the loss of know-how in “what needs to be done” but in Competency is knowledge, skills and not expect the SMEs to support the sourcing, ethics, IP protection, fi- from the impending exodus of retir- “how to do it?” The following tips other attributes (KSOA) required to project in their “spare” time. Set up A fine or a detailed approach to nance, contracting, supply chain, ing baby boomers. will help organizations avoid com- execute actions in a job context that program sustainability measures mapping competencies thrives on legal and customer relationship The promise of shale gas, biofu- mon mistakes and navigate swiftly meet certain defined standards. The right at the start. precision but takes time. In some management in the underpinning els and biotechnology has not yet past critical decision points. “other attributes” part of KSOA in- In addition, human resources and cases, a detailed approach can knowledge standards. Include sys- blossomed in Europe. Therefore, cludes all the deeper or hidden di- operations need to be in sync. Of- quickly reach a point of diminish- tems, statistical, creative and critical recent investments in new large- Get The Semantics Right mensions of competency, such as at- ten HR lacks the credibility around ing returns. A coarse or a big-pic- thinking in the list of skills require- scale ethane crackers across the titude, values, traits, self-image and technical competencies. On the oth- ture strategy may work faster but ments for leaders and innovation pond have the potential to tip the Many competency-related projects self-regulation. er hand, operations teams tend to also has the risk of being too broad team members. cost advantage back to the U.S. have failed because of cognitive A standard includes judging cri- undervalue the importance of the or too general. The trick is to know ▪▪ Incorporate some levels of lead- and further catalyze brain drain barriers. The domain of competen- teria, measures, targets and indica- psychosocial competencies. It is im- how and when to use the two ap- ership and innovation functions in from Europe. Nonetheless, Eu- cy mapping is complex, but it does tors. There is confusion about the portant to bridge the divide. Using proaches. For compliance-man- all job definitions. Meta competen- rope continues to be the center not have to be complicated. Clarity, use of these terms. Google any of a single extensible model for hiring, dated situations and for tasks that cies and other attributes play a sig- for chemicals know-how and has consistency and accuracy in labeling these terms and the next phrase you training and development and one involve high business risks, deploy nificant role in the development of a large installed base for cracking are important. are most likely to search is “rem- that works for all job types helps in the detail-oriented approach. For leaders and innovators. Meta com- naphtha, which gives higher yields A job role combines disciplines, edies for headache.” Criteria include bridging the chasm. worker retention, planning and ex- petencies are best developed in au- of C3s and C4s. It has land connec- functions and assets and typically elements such as safety, speed and A common question about any pertise development, the big-picture thentic learning environments. Cre- tions to major markets, a reliable has multiple levels. For example, a accuracy. Measures include vari- new system is, “Does it work with approach works better. Here a set of ate multiple multidisciplinary inno- infrastructure and higher levels mechanical engineer may support ables like number of accidents or an existing ERP (enterprise resource competencies is mapped to a range vation teams and ask them to work of public education. Geopolitical plant operations or may do research near misses. Targets define what planning) system?” Competency as- of activities performed at each job on new problems and opportunities. events and export levels of lique- in R&D. The discipline is the same, needs to be achieved to meet the surance programs facilitate the level, rather than at each task or fied natural gas (LNG) and coal but the functions are different. Al- different standards. Indicators can workforce planning process and sit step level of each activity. By following the advice presented from the U.S. are the unknowns in ternatively, a technician, an operator be quantitative or more behavior- on top of the learning management Be creative in defining job roles. here, the European chemicals indus- this dynamic landscape. and a process engineer may support based. systems. The integration between It is important to define existing as try can leverage the power of com- the systems is important, but, unlike well as future job roles. Strive to de- petency mapping and assurance to pict job roles visually rather than in accelerate workforce qualification words to make them easy to under- and expertise attainment processes, stand and explain. retain more knowledge and improve Information and communications its capability to innovate. technology (ICT) has given us more options and efficiencies in developing and presenting content. Recent dis- Dr. Saidas M. Ranade, Director, coveries in cognitive sciences, neu- GP Strategies rosciences and psychology have pro- vided new insights on learning. Yet, even today, the chemical industry 22 Contact: relies mainly on classroom training Dr. Saidas M. Ranade and unstructured on-the-job training GP Strategies (OJT) for workers. This is a problem. Houston, Texas, USA To make training more effective Tel.: +1 800 727 6677 for the qualification step, use a com- [email protected] bination of the following methods: www.gpstrategies.com lectures, reading, demonstrations, group discussions, shadowing, case- based reasoning and simulators. For developing expertise, shift the em- bit.ly/competitiveness Fig. 1. A Unified Competency Model Fig. 2. A Visual Job Representation phasis from training to learning. Use

Bayer Preparing a Bid for Norwegian First Shanghai Carbon Permits Trade Drug Partner Algeta as China Moves on Emissions

Germany/Norway — Bayer has in the U.S market. The drug is de- China — The first carbon per- sions per unit of GDP to 40-45 per- 26 yuan, and 500 for 2015 changed confirmed that it is preparing a bid signed to target bone metastases mits in Shanghai traded at 27 yuan cent below 2005 levels by 2020. hands at 25 yuan. to acquire Algeta, the sales partner from prostate cancer that cannot ($4.43) recently as the financial hub Bin Hui, vice director at the Shanghai’s scheme caps carbon for its prostate cancer treatment be treated by standard hormone launched China’s second such trad- Shanghai Environment and Energy dioxide emissions from 191 big en- Xofigo. therapy. ing scheme in a bid to cut its fast- Exchange, told reporters that state- ergy users in the financial centre, The pharmaceuticals, agrochemi- Marijn Dekkers Xofigo, which according to Bayer growing greenhouse gas emissions. owned power company Huaneng spanning electricity generation, CEO, Bayer cals and plastics group initially could become a blockbuster product Three trades for a total of 9,500 was one of the companies involved manufacturing, airlines, harbours offered 306 Norwegian crowns with annual sales of least €1 billion, permits for 2013 compliance, known in the Tuesday deals, but gave no and commercial buildings. ($49.90) per share for the company. has some properties of calcium. That as Shanghai Emissions Allowances further details. Participants get free permits from This is a nearly 16% premium to Al- lowing a German newspaper report makes it cling to cancerous bone (SHEAs), went through in the first The opening price matched the the government to cover most of geta’s closing price of 264.60 crowns on Bayer’s bid, the share price shot cells and then destroy them via al- half-hour after the market opened. first trades that went through when their expected emissions. If they ex- on Nov. 25 and values the Norwe- up by more than 30%. pha rays, which is said to be more A third carbon market will open in the Shenzhen emissions market ceed those levels they must buy per- gian company at 13.4 billion crowns, Algeta and Bayer Healthcare, which targeted than the shotgun approach Beijing on Thursday. opened in June, but prices there mits in the market from companies or roughly €1.63 billion. According have cooperated since 2009, are co- of conventional radiotherapy. (dw) China is the world’s biggest emit- have since risen to around 60 yuan. that have a surplus, or from offset to reports, it also is nearly 30 times promoting Xofigo, with the active ter of greenhouse gas emissions, but A batch of 4,000 permits for use projects elsewhere in China regu- the company’s 2012 EBITDA. Fol- ingredient Radium-223 dichloride, ▪ it has pledged to reduced its emis- in 2014 also traded in Shanghai at lated by the central government. ▪

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www.twitter.com/ CHEManager_EU CHEManager Europe 11-12/2013 IT-Solu tions Page 9 Next Generation Manufacturing Holistic Business Approach Supports ‘Industry 4.0’ Principles

Survival of the Most Adapt- ing instruction on a tablet PC to exchange a valve of a machine. The able – “It is not the strongest that worker receives step-by-step 3-D survives, nor the most intelligent. It is visual instructions to follow un- the one that is the most adaptable to til the new valve is installed. After that, the worker confirms that the change.” Charles Darwin’s statement repair is done and this information from the 19th century is still valid to- is instantly available to manage- ment. This saves time and cost and day and applies to industry as well as increases transparency. nature. Idea to Performance is a holistic approach; nevertheless, customers Companies that foresee trends and might want to implement it step- adapt their business accordingly will by-step. They should revise their be successful. They need a holistic processes and solutions in use and business approach that covers all decide in which of the four scenarios steps from the idea to the manufac- they would profit most from fully in- turing of a product and then beyond tegrated processes. As a conclusion, to services. let us keep it with Thomas A. Edison: Adaptability is more important “Vision without execution is hallu- than ever as we are entering a cination.” fourth industrial revolution. The first three industrial revolutions Scott Bolick, Head of Idea came about as a result of mecha- to Performance, SAP nization, electricity and IT. Now, the introduction of the Internet of 22 Contact: Things and Big Data coupled with Scott Bolick a transition to service revenues is SAP ushering in a fourth industrial rev- San Francisco, CA, USA olution, also known in Germany as [email protected] “Industry 4.0.” In the “smart facto- www.sap.com ries” that are already beginning to in communication with customers, status during the development is only possible with big data capabil- Another area that bears big po- appear, smart machines, storage employees and business partners process. What used to take hours ities, as offered by SAP HANA; 80% of tential is mobility: When mobile systems and production facilities and to new business models. As an can now be done in a few minutes. decision-makers think access to the access is provided to employees, autonomously exchange informa- example, companies may ask their This accelerates time-to-market right information at the right time is this brings about up to 40% higher tion, trigger actions and control customers about their opinion on a for new products and safeguards critical to their business. employee productivity. Imagine a bit.ly/it each other. new product, even before they start compliance if new regulations come maintenance worker gets a work- The embedded manufacturing the development process, and they into effect. Responsive manufactur- systems are vertically networked will leverage sentiment analysis to ing aims at supporting companies with business processes within fac- gain insight to rapidly modify their to reduce their order fulfillment tories and enterprises and horizon- products to keep pace with changing cycle times and cost, while at the tally connected to disperse value requirements. same time increasing agility. The networks that can be managed in solutions enable companies to run Smart and Connected real time — from the moment an Turning Challenges Into Opportunities variant processes for much more order is placed right through to out- variant products. As an example, bound logistics. This leads to a com- SAP is adapting Industry 4.0 prin- steel manufacturer Joris Ide prof- Short Interview with Dr. Marko Lange, SAP, IBU Chemicals pletely new approach to production, ciples through the development of its from 15% faster production lead one that not only enables manufac- “Idea to Performance,” a holistic times and 50% fewer stock correc- turers to meet changing customer business approach and a solution tions. CHEManager Europe: How will analyzed. This is possible with demands, but also addresses global bundle to increase product and “The latest implementation has the trends and challenges de- a new database concept called challenges, such as resource scar- service performance. The approach boosted manufacturing efficiency scribed by the term “Industry SAP HANA, where the database city and demographic shifts. enables full management of a prod- and integrated all of our SAP sys- 4.0” affect the chemical industry is running in-memory and where uct’s entire life cycle from design to tems,” said Bernard Bossuyt, ICT in particular? the organization of data is done Trends Driving Change service within distinct scenarios. manager, Joris Ide Group. “With along rows and columns. This al- Box 1: Idea to Performance Inte- SAP BusinessObjects solutions in- Marko Lange: In order to understand lows significant data compression A variety of market trends are lead- grated Solutions stalled on top of SAP ERP and SAP what “Industry 4.0” means for the and gives the opportunity to read ing to changes in the business envi- Idea to Performance enables fully MII (Manufacturing Integration and chemical industry, it is helpful to millions of data sets out of a data- ronment: Companies are pressured integrated processes. The offering is Intelligence), top management has reduce this broad term to its es- base within seconds, or even less more than ever to reduce time-to- a solution bundle of: immediate insight into manufactur- sentials. And these are mainly two than a second. market and increasingly must do so ▪▪ R&D/engineering ing key performance indicators.” things, in my opinion: Firstly, all on custom orders — giving rise to ▪▪ Manufacturing (e.g., manufactur- • Operational excellence aims elements of a chemical company From your point of view, will sus- the concept of the “batch of one.” ing integration and intelligence, to support companies to efficiently become smarter, and secondly tainability management become ▪▪ Service-driven models are taking manufacturing execution sys- manage their assets. The solutions they become connected — be it even more important in the fu- off as companies not only sell a tems) enable the view on the machines assets, employees, products, busi- ture? How will companies profit product but also services around ▪▪ Sustainability (e.g., environmen- and help to keep them up and run- ness partners or end customers. from a holistic approach that it. Leading companies are going tal health and safety manage- ning, so to speak. This is done by not Here are some examples: Assets covers engineering, production so far as to sell outcomes. ment) solutions only combining machine data, but will be equipped with SIM cards and sustainable operations? ▪▪ Global regulations need to be ▪▪ Enterprise asset management also by combining data from envi- so that they can provide informa- Dr. Marko Lange, Solution manager, fulfilled, and sustainability chal- ronmental health and safety, quality tion about their condition. Mainte- IBU Chemicals, SAP Marko Lange: Challenges like global lenges need to be considered, The focus is on ensuring that the and energy data (IT-OT integration). nance workers get mobile devices, warming and limited resources of even before starting to produce systems are smarter, faster and sim- As an example, Nova Chemicals im- which inform them about new manufacturing, R&D, regulatory raw materials and energy in spite a product. pler. Smarter via insights provided proved maintenance scheduling work orders, including working affairs, maintenance and logistics. of a growing population, obviously by SAP HANA on converged opera- compliance by 22% and time spent instructions. Products get tagged Combining analytics with produc- proof that sustainability will gain Technology is helping the industry tional and enterprise data. Faster by on reactive, emergency work by 47% with unified identifiers, which al- tion planning helps to reduce asset importance. These findings are address these new challenges and embedding this insight into integrat- with SAP Enterprise Asset Manage- low tracking and tracing them downtimes and increase productiv- not new for the chemical indus- opportunities in an unprecedented ed applications from idea to service. ment. and knowing their history. Busi- ity. This is because analytics allow try that has been running the way: In the future, machines, prod- Simpler through 3-D visualization ▪▪ Aftermarket service solutions en- ness partners can exchange infor- understanding when an asset will Responsible Care initiative for ucts and materials are becoming delivered on mobile devices. able new business models and ser- mation in social networks to drive have a breakdown, for example, many years now. However, the use “smart” through sensor technology. The offering extends existing so- vice scenarios for customers. They open innovation or to exchange since it is based on sensor data from cases described can help to turn Sensors can automate tasks, report lutions with innovations. It aims to support contract management and material data declarations to en- technical equipment that is smart product into service business and performance levels, flag anomalies support companies to add value on billing, complaint, returns and depot sure product compliance. And last and connected. Tracking and trac- to increase energy and material and generate alerts. Companies get four dimensions: Sustainable inno- repair, field service and service con- but not least, end customers can ing of goods shipments allow reduc- productivity tremendously. I think insight into their business processes, vation, responsive manufacturing, tract management as well as multi- check eco-friendliness of products tion of inventory, reducing working that this is the real fourth indus- measure performance, and run pre- operational excellence and after- channel customer service. via mobile devices. capital needed. At the same time trial revolution — the outstanding dictive analytics to forecast future market service. you can avoid product counterfeit- increase of material and energy outcome (“connected planet”). ▪▪ Sustainable innovation means Big Data, 3-D and Mobility SAP’s holistic business approach ing and increase your service level efficiency enabled by connecting Sensor-driven data coupled with supporting companies to have com- was designed to support compa- at reduced cost. And last but not different elements that become enterprise data will lead to a data plete transparency on their portfo- Looking at those four dimensions, nies to tackle these challenges. least, helping ensure that products smarter. explosion. According to market lio, invest in their most profitable one thing is becoming clear: The only Could you please describe in are safe, compliant and trustworthy analyst firm IDC, the “digital uni- areas, and then speed up time to way businesses can succeed is by lev- what areas chemical companies mitigates product compliance risks verse” will grow from 2005 to 2020 market for their products. As an ex- eraging big data. Data from enter- might profit most? while increasing customer satisfac- by a factor of 300. This is driving ample, Givaudan, a global leader in prise business applications is being tion. This is even more imperative 22 Contact: the need for faster database tech- the fragrance and flavor industry, coupled with operational data. The Marko Lange: The given examples for innovative products that are Dr. Marko Lange nology to manage and analyze big uses SAP EHS Management for its amount of data is growing exponen- show that we do not talk about sustainably made and tailored to IBU Chemicals, Industry Business Solutions data. compliance checks. With the big tially. Companies also want to con- manufacturing alone. We have customer needs. SAP AG The frequent use of social me- data capabilities of SAP HANA, a nect with their suppliers, partners to break down the barriers be- Behind all that, huge amounts Walldorf, Germany dia and innovation networks is an- fragrance designer can now au- and customers and to analyze and tween the business functions like of data have to be managed and [email protected] other trend. This leads to a change tomatically check the compliance simulate production processes. This

chemanager-online.com/en Page 10 IT-SOLUTIONS CHEManager Europe 11-12/2013

Saving Time And Money Increased Automation of Drawings Pays Off Even in Smaller Projects

Speed And Accuracy – As pro- Regardless of project size and rently the only solution available scope, it’s universally understood in the low-end plant design market ject schedules and budgets continue that process plant design is a spa- today to offer OrthoGen. to get shorter and tighter, automation tial task that is best addressed by Millions of drawings for extreme- will continue to be a key driver in an or- working in three, rather than two, ly large and complex plant designs dimensions. Why is this? A typical across all disciplines — petrochemi- ganization’s ability to increase produc- plant is an intricate, complex web cal, pulp and paper, pharmaceutical, tivity, avoid errors and lower costs. As a of interconnecting piping, structure, power, offshore, mining and miner- equipment, instrumentation, elec- als, and shipbuilding projects — are significant proportion of the execution trical and HVAC. Hence executing using highly developed automated time of a small project is dedicated to plant design projects in 2D alone 3D design tools to accelerate the deliverables creation, this is one focus is extremely time consuming, error project process. The same automa- prone and hugely difficult. tion levels and productivity boost area that design companies are expect- Furthermore, because of the can now be achieved by smaller ing software vendors to improve. manual nature of the 2D design companies and projects — and now process, which is predominantly for AutoCAD-based plant design drafting biased, even the smallest projects. A plant design project usually re- projects executed entirely using 2D quires two primary and essential CAD can be challenging. Even when Low Cost, User Friendly drawing deliverables to be pro- taking the utmost care and paying duced — 2D layouts or general ar- close attention to detail, the project Drawings can be created in a frac- rangements, and piping isometrics. will often suffer schedule delays and tion of the time they would take to Whereas layouts and general ar- cost increases due to mistakes and produce manually, even if the pro- rangement drawings will ordinarily omissions caused by human error. cess is semi-automated in some show all disciplines in the plant, iso- Unfortunately, many of these prob- way. For example, industry users metrics on the other hand will only lems don’t come to light until late involved in drawing production ac- document individual pipelines. in the project, when they are both tivities in major international engi- Therefore, for smaller projects difficult and costly to rectify. neering firms have reported spend- that are typically fast-track and ing 40 to 60 hours per complicated low-margin in nature, any 3D plant 3D Modeling For All piping drawing using semi-automat- design solution that can automate ic methods. Taking into account the the production of both types of de- To support the needs of large, multi- time needed to add other required liverable from a 3D model will be discipline design groups, working details — such as hatching, notes highly valuable and attractive to on large-scale or even mega-sized and detailed dimensions — these companies who are struggling to joint venture projects, often based same firms report it taking 2 to 4 cost-effectively produce the deliv- in different geographical locations hours per drawing supported by Or- erables their projects need. around the globe, many software thoGen automation. A considerable Why is drawing automation at- companies in the market have in- time saving! © olly - Fotolia.com tractive? Because automatic draw- vested heavily in developing high The time savings reported have ings generated from 3D models can levels of drawing and reporting mainly to do with the higher accura- be created in a fraction of the time automation as part of their 3D smaller segment of projects and AutoCAD or MicroStation. In those This would enable them to increase cy and consistency of the drawings, of any other means, but more im- design solutions. Using these solu- companies with well-developed Au- systems, the production of delivera- their productivity and reduce errors. which require less double-checking portantly, they always accurately tions, high-quality deliverables can toCAD-based plant design products. bles is usually highly manual, with However, so far, attaining complete and report fewer errors. Addition- and consistently reflect model con- be generated automatically from Appropriate for any sized organiza- responsibility for general arrange- deliverables automation continues ally, when changes to the design ditions, almost eliminating the need the 3D design model at the click of tion, but more so, perfectly suited to ment drawing production delegated to be the accomplishment of just the occur, updates to the drawings are to check them. a button, without manual interven- smaller design contractors, particu- entirely to the user. However, some high-end systems. also made automatically when the The design, fabrication and con- tion or any need for further editing larly those who are looking to make systems do offer basic automation For many years, users of high- drawing has been re-run, saving struction of capital projects — such or touch-up. the transition from 2D drafting to to make the drawing creation task end design solutions such as Inter- even more time and effort. as major industrial facilities includ- But what if you need a solution 3D plant design for the first time, easier — such as the ability to add graph’s PDS have benefitted from Easy configurable options make ing process plants, power stations or that is suitable for smaller-scale one of those tools in the market is dimensions and labels, and per- the use of OrthoGen — developed by these tools available to engineers offshore platforms — would not be projects, or don’t have the budget Intergraph’s CADWorx Plant Profes- form hidden line removal on scaled 3DS Net Inc. for the automatic pro- without the burden of expensive possible without engineering draw- to invest in any of the high-end so- sional. The tool has a user-friendly views in paper space, or extract duction of 2D layouts and general training, and drawings meet the ings. Documenting the design of lutions that are available, for that interface, and in a few days, person- bills of material reports from the arrangement drawings. Low-end most demanding customer require- these facilities will typically result in matter? Well, the good news is that nel who are already familiar with 3D model. It is possible to produce system vendors on the other hand ments. Through the application of literally thousands of drawings be- a wide range of solutions addresses AutoCAD can be taught to leverage good quality deliverables in this way, have not taken advantage of Ortho- standards and use of templates, ing produced throughout the course the needs of engineers, designers their existing 2D skills to quickly and it is certainly much easier and Gen, and therefore provide only half these design tools enable smaller of a project. Crucial for project suc- and the broad spectrum of small, become proficient and productive less time consuming than drafting of the drawing automation capabil- companies to be completely in con- cess therefore is having the ability to medium, large and mega-sized pro- in AutoCAD-based 3D plant design. deliverables by traditional means in ity that design contractors expect to trol of the deliverables produced for create drawings and reports quickly jects executed in the process, power Some vendors focus on the low- 2D CAD. But most companies who be offered in 3D plant design solu- projects. Users can select from a set and accurately, and to be able to up- and marine industries. er end of the plant design market choose to invest in low-end solutions tions today. Now Intergraph’s CAD- of predefined drawing types and are date them easily when the design is The major players in 2D and with their 3D plant design tools that really want fully automated draw- Worx Plant Professional is the first able to see a preview of the output, revised. 3D modeling are looking after the are built on 2D CAD platforms like ing production from the 3D model. to break that impasse and is cur- as well as descriptions and tips on the options used for each drawing type. Complete drawing automation is a key differentiator when choosing a plant design system to ensure pro- jects are delivered with high quality, on time and within budget. Smaller companies have been postponing the decision to join the fully auto- mated drawing generation because of constraints in price or technical accessibility of the tools available in the market. There is no reason to stay out of the game any longer. Whether you’re in the market for a 2D/3D plant design solution for the first time, looking for an alternative or a complementary solution for smaller projects, or looking to move from a low-end to a high-end system, draw- ing automation is now available to all.

Paul Martin, Business Develop- ment Manager, Intergraph CAD- Worx & Analysis Solutions, Europe

22 Contact: Cristina Gonzalez Intergraph Hoofddorp, Netherlands Tel.: +31 23 5666 551 F [email protected] www.intergraph.com

bit.ly/Plant-Design

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CHEManager Europe 11-12/2013 Chemi cals Page 11 Evaluation Regulation Production An update on the What the U.S. can WeylChem PPC’s switch ECHA Board of Appeal learn from REACH from mercury to membrane and the appeals process. regulations. technology.

Page 12 Page 13 Page 14

REACH and Chemical Distributors Brenntag on Implications for the Industry

Every Player Counts – By now, Matthias Raduner: First of all custom- ers can expect Brenntag to act in everyone in the chemical industry is compliance with effective regula- aware of REACH and in the best-case tions. While in terms of our pro- scenarios, every player knows what is cesses we are in compliance with Merck KGaA to Build New Pharma Plant in China the obligations stipulated in REACH, German chemicals and pharmaceuticals producer Merck KGaA plans to expected of them under the law. But a general confirmation on REACH invest €80 million in a new pharmaceutical plant in the Nantong Economi- it’s not just manufacturers of chemicals compliance for the products sup- cal Technological Development Area of Greater Shanghai. The Darmstadt- plied, often requested by custom- who are obligated to follow the regis- based company said production will focus on its leading brands refer- ers, has no value since the compliant enced in China’s essential drug list and serve the country’s expanding tration guidelines; chemical distribu- use is always in the responsibility of healthcare needs in the areas of diabetes, cardiovascular diseases and tors also have their role to play under the downstream user. For instance thyroid disorders. The new facility, the second largest site worldwide for a registration alone does not imply biopharmaceuticals arm Merck Serono, will concentrate on bulk pro- the law. Brandi Schuster spoke with the downstream user’s compliance duction and packaging of the drugs Glucophage, Concor and Euthyrox Marianne Lyngsaae, Quality System when his use is not covered by the for treatment of diabetes, cardiovascular diseases and thyroid disorders registration. Manager and REACH Adviser, Brenntag respectively. Construction is scheduled to begin in 2014, with commercial What our customers may expect production to start in 2017. Merck said maximum resource efficiency Nordic and Matthias Raduner, REACH is the swift and professional re- and minimized waste generation during the manufacturing process will & European Projects Analyst, Brenntag sponse to questions around REACH be targeted. Marianne Lyngsaae, Quality System Manager Matthias Raduner, REACH & European Projects generally and regarding uncovered In Shanghai, Merck Millipore recently opened a biopharmaceutical Europe, about what REACH means for and REACH Adviser, Brenntag Nordic Analyst, Brenntag Europe uses particularly. In many cases technical and training center in China and will shortly start up a liquid their company. customers are overwhelmed by the Crystals manufacturing facility there. (dw) complexity and technical terms of an exposure scenario and can be Formosa Plastics Plans $2 Billion Ethane Cracker in Texas CHEManager Europe: How many been the task to comply with com- Typically the chemical distribu- satisfied by advice how to interpret One of Asia’s largest chemicals and plastics producers, Taiwan-based REACH inspections within Brenn- munication obligations related to use tor does not only buy, store and dis- the content of the document. In case Formosa Plastics, is seeking to cash in on the U.S. shale gas boom with its tag have been carried out to date? identification. On top of that, distribu- tribute chemicals but operates as a use is not covered a profession- own $2 billion ethane cracker in Texas. In 2012, Formosa announced that tors where challenged in dealing with re-packer, re-filler and even offers al, smooth communication up and it would spend $1.7 billion on an integrated 800,000 t/y gas-fed cracker Marianne Lyngsaae: The inspections requests from their customers to pro- value-added services like mixing down the supply chain with the aim and a 300,000 t/y LDPE plant at Port Comfort, along with a 600,000 t/y have often been carried out as com- vide information on or even a “guar- and blending. By these activities, the of adapting extended SDS is key. dehydrogenation (PDH) plant to start up in 2016. Formosa Vice Chair- bined REACH/CLP inspections, and antee” regarding “REACH Compli- distributor becomes a downstream man Susan Wang did not elaborate on what the additional $300,000 the weight of these two elements ance” of their products supplied. Now, user and has to take over obligations How has REACH affected your expenditure would cover. Separately, press reports from Vietnam and (or other elements) differs. There- after the first and second registration upon receipt of the extended SDS. A business and the businesses of Taiwan say that Formosa is planning to build a 200,000 t/y production fore, it’s not easy to come up with deadlines, the main activity when downstream user using dangerous your customers? facility for polystyrene in Vietnam’s Nhon Trach industrial park, where an exact overall figure at European dealing with dangerous substances substances or preparations, has to it already produces manmade fibers, polyester and biaxially oriented level. Some countries already had or preparations consists of forward- comply with the provisions set out Matthias Raduner/Marianne Lyngsaae: The polypropylene film (BOPP). (dw) five REACH inspections, some oth- ing extended SDS to customers and to in the exposure scenarios attached regulation, with its impacts on all ers only three and some also none. act as a communication link between to the main body of the extended dimensions of Brenntag’s business Glaxo SmithKline to Invest In Scottish Plant Expansion customer and supplier when it comes SDS which describe how to use a processes, forces us to continuously Glaxo SmithKline (GSK) has announced plans to invest £25 million in Do you feel like the inspections to uses not covered or to conditions substance/preparation safely. Any dedicate resources on subsidiary expanding its active ingredient formulating plant at Montrose, Scotland. were thorough enough to meet the of use outside the description in the use outside conditions or a use not level as well as centrally. One of the The UK drug maker said it would locate production of four unspecified goals set out by REACH? exposure scenario. covered in the Exposure Scenario most perceptible impacts of REACH new entities at the site, where it is receiving more than £3 million in A distributor importing substanc- entails measures to be taken to cor- has been increase of communication financial support from the local government of Angus and the business Marianne Lyngsaae: REACH is a highly es or preparations must either make rect the situation. between Brenntag and our business development agency Scottish Enterprise. complex piece of legislation, and sure it has registered or pre-regis- All in all, the communication up partners and the related documen- The company’s latest investment in Scotland is in addition to the £100 the learning curve is steep. This is tered the chemicals by itself or rely and down the supply chain has sig- tation. Also, our environmental, million it previously announced it was spending at Montrose and at Irvine, the case for inspectors as well as on the non-EU supplier’s appoint- nificantly increased due to REACH health & safety management system Scotland, where it produces antibiotics. The two investments together will for the inspected Brenntag enti- ment of an Only Representative (OR) as has the need to keep records of had to be adapted to cope with the bring GSK’s headcount in Scotland to around 750.(dw) ties. By experience, the focus of the to do the (pre-) registration. While this communication. As the common additional requirements imposed by inspections is changing along with the first option often is a question business model of the distributors is the regulation. SABIC To Start Up Yanbu PET Plant in January the REACH timeline from pre-regis- of strategy and cost, the second op- the sourcing from a variety of sup- EACH induced Brenntag’s com- After construction delays foiled plans to start up its new 420,000 t/ PET tration to registration and from SDS tion is challenging in terms of trust pliers and servicing a high number mercial departments to get increas- plant at Yanbu, Saudi Arabia, in Q 4 2013, SABIC has rescheduled the to extended SDS. In areas where in the non-EU supplier’s registration of typically small and medium sized ingly involved with inquiries around start for January 2014, news reports say. inspectors are very familiar — like strategy and the professionalism of enterprises, the communication regulatory provisions requiring in- The Saudi petrochemical giant is believed to be expanding feedstock classification and labeling — REACH its OR. As some non-EU suppliers do obligation and record keeping rep- ternal trainings to provide a solid capacity at the site, where it also operates a 330,000 t/y PET plant. Capac- compliance of the SDS and registra- still lack knowledge with regards to resents a challenging and resource- basic knowledge on REACH which is ity for paraxylene (PX) will be doubled to 400,000 t/y and PTA capability tion status of substances inspections the regulatory provisions concerning binding task. today key when offering profession- widened to 600,000 t/y, according to the reports. have been very thorough. In other imports, it often is a challenge for the al service as a chemical distributor. The start-up of the new PET facility comes at a time when worldwide areas, inspectors could benefit from importers to prove and document What do your customers expect REACH compliant purchases markets for the packaging resin are already glutted, observers say. (dw) learning more about company pro- REACH compliance of individual from you when it comes to regula- from outside the EU require the con- cedures and business practices that transactions when relying on an OR. tions like REACH? tinuous control of import volumes Dickow Delivers Pumps for Sadara Chemical Complex are beneficial for making thorough as well as the ongoing monitoring German pump manufactur- inspections and helps to facilitate the of Only Representatives. To ensure er Dickow Pumpen has been dialog with the inspected company. compliance of own operations is awarded several orders covering another dimension of REACH re- 164 magnetic coupled pumps for What challenges do chemical dis- lated tasks that has to be organized the Sadara Chemical Complex. tributors face when it comes to in the daily work. The compilation Sadara is a joint venture of Dow regulatory issues such as REACH? of Brenntag proprietary extended Chemical and Saudi Aramco lo- SDS is an additional effort demand- cated in Jubail Industrial City, Matthias Raduner: REACH has its im- ing challenge requiring high levels Saudi Arabia. Once completed it pact on every actor in the chemicals of skill and professional accuracy. will represent the largest petrochemical facility ever built in a single phase. supply chain. Not only manufactur- The fully integrated complex will consist of 26 chemical manufacturing units ers and importers, but also any com- producing a variety of chemicals, such as amines, propylene glycol, polyu- pany or professional person using Bottom line: The requirements of rethanes, low density polyethylene, elastomers, glycol ethers and propylene chemicals as well as the distributors REACH have increased the com- oxide. Due to the sheer size of the complex multiple EPC (engineering, have their legal obligations under plexity in every dimension of busi- procurement and construction) contractors are involved in the realization this regulation. ness processes for all participants of this huge project. Dickow pumps are part of several pump packages for The majority of chemical dis- in the chemicals supply chain, but different production units, including orders from Daelim (South Korea), tributors are confronted in dealing six years after entering into force, Fluor (USA), Jacobs/Alfa Laval (Denmark) and lately Tecnicas Reunidas with several aspects of the regula- REACH has become integral part of (Spain). 100 pumps are already shipped or almost completed. tion, depending on their role in the business practice. Beside the pumps, the scope of supply includes electric motors, cou- supply chain as defined by REACH, plings, instrumentation, polymer concrete base plates, intensive tests and be it distributor, importer and/or inspections, and special conservation of the pumps. All equipment has downstream user. to follow strict specification requirements specially generated for this In the beginning of the REACH era, complex and demanding project. the most challenging activity in terms bit.ly/REACH of effort for distributors has certainly

chemanager-online.com/en Page 12 CHEMICALS CHEManager Europe 11-12/2013

Interpreting REACH Work of the ECHA Board of Appeal and the Appeals Process

Little-Known Step – More than tive director. Second, the members bound by the reasoning in the BoA of the BoA may not perform any oth- decision; or annul the contested de- six years after the REACH regulation er duties in the agency. Third, while cision and substitute the contested went into force, perhaps the least- there are benefits to the BoA from decision with another as directed in known part of the regulation is the being co-located with ECHA in terms the BoA decision. of understanding the processes fol- It should be borne in mind that Board of Appeal (BoA) of the European lowed, both the BoA and ECHA are the review performed by the BoA Chemicals Agency (ECHA) and the ap- extremely vigilant in ensuring that is a legality review, which implies the members of the BoA are never that the appeals process should not peals process. exposed to case-specific material or be regarded as a second chance for discussions that might be perceived registrants but as a means to correct In one way this is easy to under- to potentially influence the BoA’s decisions that are legally incorrect. stand, as the number of appeals has decision-making. Members of the If a company is considering utiliz- been less than anticipated by the BoA also attend stakeholder events ing the appeals system, it is advised European Commission, ECHA and to help ensure that they are in touch to read carefully the relevant legis- the Board of Appeal itself. However, with the wider stakeholder environ- lation as well as the guidance and each BoA decision could have a sig- ment, and they actively encourage supporting material prepared by nificant effect on the interpretation invitations to attend events outside the BoA. and implementation of REACH, the ECHA. And fourth, perhaps most im- Over time the BoA’s decisions Biocidal Products Regulation (BPR) portantly, all BoA final decisions and will help to clarify certain grey ar- that took effect Sept. 1, and the most of its procedural decisions are eas in REACH and the BPR. They working practices of ECHA gener- published. also will help to ensure that ECHA’s ally. As mentioned above, only certain processes are fully in line with the The BoA was established by ECHA decisions can be appealed to requirements in both of these regu- REACH (Registration, Evaluation, the BoA. In short, under REACH lations as well as with EU law more Authorization and Restriction of these are ECHA decisions related to generally. While most stakeholders Chemicals) to allow recipients of, two fundamental REACH processes: will not need to use the appeals sys- and those affected by, certain ECHA registration (rejection of registra- tem, the decisions made by the BoA decisions made under REACH to tions; certain conditions for prod- © Torbz - Fotolia.com may nevertheless be relevant to all have those decisions reviewed by uct and process orientated research stakeholders. an independent and impartial body. and development [PPORD] excep- While the appeals process and The BPR has now extended the tions; and data-sharing decisions) duration of the five-year tenure. missible, and these are specified in responding to specific questions the work of the Board of Appeal remit of the BoA to also consider and evaluation (dossier evaluation, Three BoA members consider each the Rules of Procedure of the BoA from the BoA or requests for infor- may not be the best-known aspect appeals against certain ECHA deci- testing proposals and compliance appeal. These will usually be the (for example, proof that the appeal mation. Once the written procedure of REACH, it is nonetheless an inte- sions made under the BPR. One of checks, and substance evaluation). three full-time members, but AAMs fee has been paid, and the pleas in is closed, if either the appellant or gral part of the systems established the keys to the successful operation Under the BPR, appealable decisions may be used in certain circumstanc- law and the arguments of fact and ECHA requests an oral hearing then by REACH and the BPR. It plays a of the BoA is for it to be — and to are related to data-sharing, techni- es. Each full-time member has al- law being relied on by the appel- one shall be held; an oral hearing vital role in ensuring the smooth and be perceived as — independent and cal equivalence, and the rejection of ternates who may be appointed to lant). can also be held if required by the effective operation of these regula- impartial. applications because of nonpayment work on a case if there is a potential An announcement of each ap- BoA. Once the written procedure tions in the interests of all stake- To this end, a number of meas- of fees. conflict of interest or if a member of peal received will be published on and the oral hearing are completed, holders. ures have been taken. First, all the The BoA comprises three full- the BoA is not available. Additional the BoA section of the ECHA website the BoA will consider and prepare full-time members of the BoA, and time members, one technically qual- members may also be called to work so that interested parties are aware its decision, which, if necessary, will its external alternates and addition- ified and two legally qualified, ap- on particular cases for resource of the subject matter of appeals and be adopted by a vote of the BoA. All Andrew Fasey, technically quali- al members (AAMs), are appointed pointed for a term of five years per reasons, i.e., the number of cases is also so that potential interveners in final decisions and certain proce- fied member of the ECHA Board by the ECHA Management Board member. One of the legally qualified such that they can be processed at a a case have sufficient information dural decisions (e.g., decisions on of Appeal Mercedes Ortuño, chair- rather than by ECHA and its execu- members serves as chairman for the reasonable rate only by calling upon on which to base an application to applications to intervene and re- man of the ECHA Board of Appeal additional resources. intervene. Again, the BoA Rules of quests for confidentiality) are pub- Note: The appeals process itself is in Procedure lay down the require- lished, minus any information ac- principle quite straightforward. But ments for an application to inter- cepted as being confidential by the 22 Contact: The views expressed in this article are those of the authors alone and do not necessari- while lawyers do not need to be in- vene, and the BoA will make a deci- chair of the BoA. Andrew Fasey ly represent the views of the European Chemicals Agency or its Board of Appeal. Fur- volved in an appeal, the appellant sion on whether such applications The BoA can, in broad terms, European Chemicals Agency thermore, this article has been written in a relatively informal style to make it accessib- should be aware that the appeals shall be accepted. take any decision that would have Helsinki, Finland le to as wide an audience as possible. This article should therefore not be used as the process bears certain similarities The decision-making process for been open to ECHA when they made Tel.: +358 9 686180 basis for either preparing an appeal or during the appeals procedure itself. The REACH to judicial proceedings. The appel- the BoA includes a written proce- the initial decision. In practice, most [email protected] regulation, BoA’s Rules of Procedure, BoA’s Practice Directions, the Biocidal Products lant makes an appeal by submitting dure and, in some cases, an oral BoA decisions are likely to be to: re- www.echa.europa.eu Regulation, and other resources made available on the Board of Appeal’s section of a notice of appeal (NoA) within three hearing. The written procedure in- ject the appeal and uphold the con- the ECHA website should be carefully consulted by anyone who needs to understand months of the date of notification of volves ECHA providing a defense of tested decision; annul the contested the legal provisions concerning the Board of Appeal and the appeals process the decision being contested. Certain its decision, in response to the NoA, decision and remit the contested bit.ly/REACH (http://echa.europa.eu/regulations/appeals). mandatory elements of a NoA must and potentially further submissions decision back to ECHA for further be supplied for the appeal to be ad- from the appellant and ECHA and consideration with ECHA being

Celanese Aims to Close Two European Acetyls Plants ECHA Review Finds No Need to Tighten TDI Restrictions

SHUTDOWN U.S. Group Looks to Implement New Strategy Finland — The European Chemi- ECHA’s evaluation of TDI and EO may cause allergic skin reac- cals Agency (ECHA) has concluded three other substances, ethylene ox- tions. Celanese is consulting with employees t/y acetic acid plant at Rousillon/ Citing cheap imports, Swiss- that there is no need for farther- ide (EO), TDI starting material tolu- Finland, which evaluated toluene, France, both non-integrated, were based Ineos in early October said reaching restrictions on the use of ene and tributyl phosphate, began in said it agreed with the EU’s Risk As- about closing two acetyl intermediates not a good fit with its new strategy it would close its 300,000 t/y VAM polyurethane chemical TDI in Euro- 2012. For all four, it said, the evalu- sessment Report rom 2002, which facilities in France and Spain after failing of concentrating output at sites with plant at Hull, UK, where 18 people pean work places if current occupa- ating member states did not ask for recommended 20 ppm as a more ap- to find a buyer that would continue pro- “critical economies of scale.” are employed. “Regrettably, our cost tional exposure limits are respected, further information, and there was propriate long-term exposure level In the six months the units were on per ton remains significantly higher and good control is practiced. The therefore no draft decision. than the current 50 ppm. duction and retain the 100 employees. the sale block, Celanese said it had no than the international competition agency responsible for administer- In its evaluation of EO, Austria, In its review of tributyl phos- offers. Observers attributed the lack and as a consequence we have lost ing the REACH program based its said a community level agreement phate, Hungary said it saw no need Spain/France — In May, the U.S. of interest in the VAM plant to low- a number of contracts,” said Ashley recommendations on an evaluation is needed to determine an accept- for any additional risk management group had said the 210,000 t/y vi- cost competition from U.S. and Mid- Reed, CEO of the group’s UK arm, by member state Poland, which did able risk level for workers and the measures, stating that “the current nyl acetate monomer (VAM) plant dle East producers that were making Ineos Enterprises. (dw) not ask for further information on general population with regard to CLP classification for the human at Tarragona/Spain and the 34,000 European production unsustainable. ▪ the chemical suspected of causing the carcinogenic potential of this health endpoints is appropriate.” isocyanate-related asthma. and other substances. It noted that (dw) ▪

BASF to Sell PVC Modifiers Business to Kaneka Saudi Chemical Producers Sign MoU on Merger

Germany/Belgium — BASF has al, includes comprises intangible under the Vinuran trademark, are Saudi Arabia — Saudi Inter- pany would be worth $5 million, A non-binding agreement expires at said it will sell its acrylate-based assets and inventory but not pro- not a core business. The divestment national Petrochemical Company with Sipchem taking on the role of the end of January. PVC modifiers business to Kaneka duction facilities at Ludwigshafen, will allow it to focus on growing its (Sipchem) and Sahara Petrochemi- corporate parent to Sahara. Sahara focuses on olefins eth- Belgium, European arm of Japan’s Germany. acrylate-based dispersions portfolio. cal have signed a memorandum of In early November, the chemical ylene and propylene as well as Kaneka Corporation for an undis- The world’s largest chemical With the acquisition, Kaneka will understanding on a potential asset producers which have a common polyethylene and polypropylene. closed sum. The deal, set to close in producer said the modifiers, used be able to expand its services to the merger, bringing the deal, which shareholder, Zami Holding Company Sipchem produces methanol, bu- Q1 2014 pending antitrust approv- in the construction sector, and sold PVC processing industry. (dw) ▪ would take the form of a share Group, had said they were still “pro- tanediol, tetrahydrofuran, carbon swap, one step closer to fruition. gressing detailed studies and nego- monoxide and a number of acetyls Sipchem said a closing could tiations in relation to the potential products such as acetic acid, acetic European Commission Probes Belgium’s Aid to Innovation come in the first half of 2014. Ac- merger,” following a five-month eco- anhydride and vinyl acetae mono- cording to reports, the merged com- nomic and technical feasibility study. mer (VAM). (dw) ▪ Belgium — The European Commis- mission suggested that some compa- sion when they tacitly renewed the sion (EC) has launched an investiga- nies may have been exempted from scheme after its expiry in July 2011 tion into Belgium’s system of support paying payroll taxes on remuneration and increased the level of tax re- Two Contract Workers Killed in Total Refinery Blast for innovative companies, seeking in of scientific R&D staff without the re- lief.” particular to determine whether the quired legal framework. This may To qualify as a young innovative Belgium — Two employees of an tion units, occurred during routine added that the steam cracker op- country awarded tax breaks to young have given the companies an unjus- company under the EU scheme, a independent contractor were killed maintenance on a steam generation erated by subsidiary Fina Antwerp innovative companies for seven years tified competitive advantage, it said, company must be small, have exist- in an explosion at French petro- system in a gasoline production unit. Olefins, with nameplate capacity for before it transposed the relevant EU adding that Belgium has not provided ed for less than 10 years and spend chemical producer Total’s refinery Total said fire did not break out, 1.5 million t of ethylene and 900,000 directive from 2006 into national law. sufficient information to dispel doubts. 15% of its total costs on R&D. (dw) at Antwerp, Belgium, on Nov. 19. The no hydrocarbons were released and t/y of propylene, was unaffected. Based on the results of a screening The EC said Belgian authorities blast, which forced the shutdown the situation was quickly brought (dw) exercise it started in 2011, the Com- also “failed to notify the Commis- ▪ of some – unspecified – produc- under control. The French group ▪

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Transparency is the Golden Ticket REACH Offers Lessons for U.S. Chemicals Regulation

Borrowing From EU Ap- ulators, there are signs of global seeking a workable consensus on convergence toward approaches regulatory approaches, providing all proaches – The EU’s REACH regula- that give due regard to both hazard stakeholders with clear regulatory tion (EC 1907/2006) enacted a compre- and risk. For example, REACH’s goals, enforcement expectations and hensive approach to chemicals, sweep- phased approach to compliance access to information is paramount. uses import volume thresholds as a All global jurisdictions require ing away four decades of legislation in proxy for exposure. This prioritizes some level of transparency in prod- 2007. All 31 European Economic Area higher-volume (hence higher-risk) uct feature representations, to allow chemicals for accelerated timelines consumers an informed choice in (EEA) countries enforce this require- and for increased regulation. Crit- purchasing decisions. Similarly, pub- ment. Beyond those jurisdictions, inter- ics of previously hazard-centric EU licly traded companies are required connected global manufacturing sup- approaches perceive this as a step to furnish financial information in forward. a transparent manner to provide ply chains ensure all companies world- In a corresponding movement all investors with an opportunity wide are affected, at least indirectly. toward convergence on a global to evaluate company performance regulatory approach, the state of and prospects for future earnings Transparency is a critical principle for California’s draft Safer Consumer growth. future chemicals regulation in the U.S. Products (SCP) regulation borrows Increasingly it is also becoming a extensively from REACH concepts. fundamental obligation for compa- Transparency in Regulatory Goals: California’s SCP requirement, as nies to disclose the environmental Hazard vs. Risk currently composed, requires alter- hazards and risks their products natives assessments, an approach present. Why not likewise consider The EU’s regulatory climate is in- that can often rely on inherent it a corresponding right for compa- © jun.SU. - Fotolia.com formed by the Precautionary Prin- chemical hazards for alternatives nies to be themselves provided with ciple, a concept that assumes that selection criteria. The trend toward streamlined, consistent, predict- if an action carries a suspected risk U.S. “green chemistry” legislation harmonized enforcement corral, the registrations. This mandate has regulators are studying SIEF ar- able, transparent regulations that of harm to the public or to the en- borrows from EU approaches, such U.S. would benefit by observing the placed competitors in an arena in rangements to conduct cost-bene- allow them to do long-term plan- vironment, in the absence of scien- as the REACH authorization re- EU’s measures to facilitate informa- which they discuss sensitive infor- fit analyses and glean the lessons ning? They can then compete and tific consensus that it is harmful, the quirement, which regulates harmful tion exchange among member state mation and build a comprehensive learned from these collaborative innovate freely on a globally level burden of proof that it is not harm- chemicals by confronting hazards competent authorities — measures dataset for proper evaluation of endeavors. SIEF-type arrangements playing field where the only price of ful falls on the actor. The principle at the design stage, rather than by that include joint training sessions, chemical hazards and exposure hold the promise of providing a com- admission is transparency. implies a social responsibility to placing products on the market and coordination of sanctions and infor- scenarios. There are concerns mon transparent dataset for indus- protect the public when scientific in- managing the risks after Pandora’s mation exchange. about running afoul of EU antitrust trial stakeholders and can create a Arnold J. Guikema, Tetra Tech vestigation suggests a plausible risk. box has already sprung open. With 31 countries involved (in- provisions or compromising trade more level playing field for attaining In the EU this principle is instanti- If a global consensus on regula- cluding the three EEA states), initial secrets, so third-party trustees fa- compliance for small enterprises. 22 Contact: ated in various statutory require- tory goals can indeed emerge, there REACH enforcement has been pre- cilitate SIEFs to protect production Arnold J. Guikema ments, including REACH (Registra- will be more predictability for ex- dictably uneven, with some notable information, supply chains and pro- Importance of Transparency for Tetra Tech Inc. tion, Evaluation, Authorization and ecutives who are managing compli- disagreements potentially requiring prietary formulations. All Stakeholders Ann Arbor, Michigan, U.S. Restriction of Chemicals), in which ance in a marketplace that abhors adjudication at the European Court REACH was intended to prod Tel.: +1 734 213 4095 the principle guides enforcement. uncertainty and punishes uncertain of Justice. But the consistency is re- industry stakeholders into these The EU’s six-year-old grand experi- Fax: +1 734 213 3003 A perceived historical difference decision-makers. markable given the vast differences resource-sharing arrangements and ment in comprehensive chemicals [email protected] between the U.S. and EU regulatory in languages, cultures, economies task them with the data-generation regulation has highlighted the im- www.tetratech.com approaches is that the U.S. has often Transparency In Harmonized Enforcement and histories. process. Despite the tensions inher- portance of transparency for all prioritized regulatory goals by risk The challenges faced by this un- ent in forced collaboration among stakeholders: consumers, voters, rather than by inherent hazards. The EU recognized that its 1960s- ion of sovereign member states mir- competitors, these groups leverage regulators, executives, employees Critics have seen the EU’s in- era regulatory enforcement patch- ror the balancing act that the U.S. opportunities for resource-sharing and investors. All these parties have bit.ly/REACH terpretation of the Precautionary work was antiquated in a globalized faces in its own precarious equipoise and avoid duplication of effort. U.S. decisions to make and if we are truly Principle as irrationally conserva- 21st-century economy. Global com- between federalism and a centrally tive and stifling marketplace innova- merce now involves far-flung sup- coordinated approach to interstate tion by eliminating useful chemicals ply chains sprawling across multiple regulation of commerce. But surely from commerce, some of which im- regulatory jurisdictions, and dispa- the U.S. faces lower barriers for prove human health and the envi- rate enforcement approaches were regulatory cooperation among its ronment, but which are presumed constructing a regulatory Tower of states compared with the EU; and guilty until proven innocent. These Babel for companies seeking a co- harmonized U.S. enforcement has voices are countered by those who herent global compliance policy. fairly strong industry support be- see the U.S.’s approach to prioritiza- The U.S. has developed a notori- cause of the burdens of the current tion by risk as resembling a giant ous patchwork of regulations — any patchwork. laboratory test tube, dosing 300 mil- presentation on U.S. chemicals re- lion citizens with 100,000 chemicals quirements includes the obligatory Transparency In Industry Collaboration Use RxnFinder and waiting on evidence of harm be- color-coded map to attempt an ex- fore taking action. planation of the regulatory land- REACH requires companies to join However, thanks to increasing scape. As the EU struggles to herd Substance Information Exchange to find chemistry information exchange among reg- sovereign member states into a Fora (SIEFs) to complete substance that works. Ineos Unveils Plans for Grangemouth Ethane Terminal RxnFinder makes it easy to search the chemistry literature for Under Construction UK, Scotland Promise Investment Aid reactions that work. Most reaction databases catalog every reaction. RxnFinder is a curated reaction After winning promises of investment have a new 40-meter high storage the closure of other facilities at database. Our editorial team selects tank capable of holding 33,000 t of Grangemouth, noting that three aid from the UK and Scottish govern- the most important reactions from the liquefied ethane produced from U.S. older plants “have reached the end top 100 chemistry journals. This means ments, Ineos has ripped detailed plans shale gas. of their useful life.” A benzene unit you don’t waste your time with reactions Docking facilities will be built on is due to close at an unspecified time for its proposed £300 million ethane that might only work on paper. the banks of the nearby river Forth in 2014, the G4 naphtha cracker and terminal at Grangemouth off the draw- for two ships specially commissioned butadiene plant in 2015. ing board and presented a blueprint to by the company to transport the gas The trade union Unite, which from the U.S. to Scotland, and the only agreed to accept manage- British authorities. site’s ethylene cracker is to be re- ment’s survival plan for the loss- vamped and expanded. When the making site after Chairman Jim Reactions at a glance naRRow yoUR seaRch ResUlts UK — Unsurprisingly, the plans upgrades are finished, Grangemouth Ratcliffe threatened to liquidate all When you search for an individual transformation, by aPPlying FilteRs you can see all the chemistry in a result in a bear a distinct similarity to the could have capability to process assets, urged the Swiss-based com- In addition to yield, RxnFinder results include single, easy-to-use summary. Get the context facility the company is building at around 400 t of U.S. ethane – that is, if pany to “come clean over job losses, stereochemistry and enantiomeric excess, so you of the reaction without having to look up the don’t always have to look up the original paper to Rafnes, Norway, due to be fully op- opponents of gas exports in Congress the timescales involved and provide original paper. decide if the chemistry applies to your reaction. erational in early 2015. The new do not thwart the ambitious plan. assurances to the workforce this And, you can filter by yield, year published, catalyst, Scottish terminal, for which start-up Ineos has warned that the new Christmas.” (dw) environmental friendliness, and more. has been pencilled in for 2016, will projects will go hand in hand with ▪ PRodUct FeatURes • The cleanest reaction • 70,000 new reactions contact Us today FoR database, with 1.7 added every year a 30-day FRee tRial. million organic reactions • Search by structure, selected from the top substructure, reaction no downloads. Consumer Health Division of Merck KGaA in Turnaround 100 journals by our in- type no software to install. house team of chemists • Search by experimental no credit card required. Germany — The Consumer Health of resources in key markets. For particularly in emerging markets, • RxnFinder is updated conditions: reagent, Register now and for 30 days you’ll have full division of Merck KGaA has made the first nine months of 2013, on where its “strong brands” have sig- fast, with new reactions solvent, yield access to all the features of RxnFinder, including added within weeks of the complete database of 1.7 million curated “substantial progress” in raising the back of organic sales growth of nificant potential, said Stefan Os- • Search by bibliographic publication, instead of data: author, journal, reactions. Don’t waste your time with reactions profitability levels to those of other 14.6%, EBITDA pre one-time items chmann, member of the managing months publication year that only work on paper. Try RxnFinder today, global over-the-counter drug com- rose 22% year-on-year to €58 mil- board with responsibility for Con- • Only modern chemistry • More than 40,000 failed and start finding chemistry that works. petitors, the company said. The im- lion, and the Darmstadt, Germany sumer Health and ethical phama- covered, with reactions reactions (yield: 0%) are Email our RxnFinder Sales Specialist Marion from 1990 to the provement in profit margins pre-one- chemicals and pharmaceuticals ceuticals arm Merck Serono. indexed, helping you spot Schumacher at [email protected] present potential dead ends. for your free trial and to schedule a demo. time items as a percentage of sales group said it is lifting its earnings Oschmann said the company’s was 18.4% in Q3 2013, well up on the forecast for the full year to €73-77 strategy is to develop at least three 14.2% margin of September 2011. million. strong brands generating a 3% total Driver of the turnaround was Given this “impressive perfor- share per key market in 20 strategic said to be the strong focus on stra- mance,” Merck can now look at how investment markets. (dw) tegic brands and better allocation to further support organic growth, ▪

chemanager-online.com/en Page 14 CHEMICALS CHEManager Europe 11-12/2013

Phasing Out Mercury How WeylChem PPC Made the Switch to Membrane Technology

Phase Out – Mercury contamina- tion continues to be an environmental and public health concern. The World Lejla Skaljic Marketing Communica- Health Organization considers mercury tions Manager, as one of the top 10 chemicals posing a WeylChem threat to public health. This is certainly the ground in raindrops, in dust, or one of the main reasons why in Europe, simply due to gravity. After the mer- chlor-alkali producers using mercury cury falls, it can end up in streams, technology are committed to phase- lakes, or estuaries, where it can be transformed to methylmercury out by the year 2020. through microbial activity. Meth- ylmercury accumulates in fish at European producers have about levels that may harm the fish and 7,600 tons of liquid mercury used by the other animals that eat them. 34 electrolysis plants in 15 countries. For the environment, this means a These units account today for 31 % of threat to the entire food chain, thus European chlorine capacity. The ob- to the health of humans and wildlife. jective set for the end of 2010 was to A significant example of how harm- have less than 35% of mercury based ful and hazardous the discharge of production in total. As a result, the mercury occurred in the Japanese gradual shift away from the mercury village of Minamata. A nearby fac- cell technology continued, account- tory discharged waste contaminated ing for 30.6% of the total installed ca- with mercury over several decades. pacity in 2011. The Industry achieved It is estimated that more than 50,000 the target set, even more than was people were affected in one way or © g0b - Fotolia.com previously anticipated. The more en- another, resulting in severe cases of ergy-efficient membrane technology brain damage and paralysis, among ronmental pollution. Besides lower million. Bank financing has been the supply of chlorine to neighboring accounted for 51% of 2011 European other possible side effects. operating costs and ease of handling secured from Commerzbank, while companies. Although supply exceeds chlorine capacity and operation, one other significant the equity portion of the financing demand, the industry is dependent Membrane vs. Mercury advantage is that the product purity will be provided by International on the major players, such as PPC. Why Ban Mercury? is higher. What does this mean for the Chemical Investor’s Group (ICIG). “This project is a major milestone The advantages of membrane tech- industry? Offering a range of mer- Chemieanlagenbau Chemnitz (CAC) in PPC’s life. We are giving PPC all Mercury in the air may settle into nology vs. mercury are that energy cury-free raw materials to the mar- has been selected to build the new the means to secure its future and to water bodies and affect water qual- consumption is 30% lower, and mer- ket will bring more environmentally membrane electrolysis plant and the operate with the best available tech- ity. This airborne mercury can fall to cury emission is zero, thus no envi- friendly products to the end users. bromine recovery plant, having ex- nology,” says Philippe Robin, PPC’s tensive experience in the segment of CEO. “In addition, our project has Secured Future erection, re-vamping and expanding received a strong support from lo- GMP goes Asia electrolysis plants. The works should cal authorities will sustain the whole WeylChem PPC, one of the major be completed by September 2015. product portfolio.” producers of chlorine, bromine “This investment is proof of ICIG’s derivatives and potassium deriva- long term commitment to a sustain- Lejla Skaljic, Marketing Communi- GMP-Compliant tives, is one of the first to announce able presence in the market of po- cations Manager, WeylChem the full production switch to mem- tassium and chlorine chemicals and Projects brane technology. Potasse et Pro- underlines the importance of Wey- 22 Contact: duits Chimiques (PPC), located in lChem PPC as a key player in this Lejla Skaljic We bridge the gap with Thann, France, has started with the field,” says Tomas Hainich, president WeylChem International GmbH conversion of its production unit of of the WeylChem Group. Frankfurt, Germany our German GMP-Expert chlorine and potassium derivatives The site in Thann, founded in Tel.: + 49 69 3800 2448 gempex and our Chinese via a mercury-based electrolysis to 1808, is the oldest chemical site in Fax: +49 69 3800 2445 local offices gemro membrane technology. In parallel, France. For the stakeholders in the www.weylchem.com PPC is to carry out an upgrade and region, it means a safer future in [email protected] extension of the current bromine terms of environmental protection. www.gemro-services.com recovery capabilities on site which It also means that PPC is one of the www.gempex.de should lead to significant cost sav- chlor-alkali production sites that ings for bromine. The total invest- will remain in Europe after the year bit.ly/WeylChem ment for both projects will be€ 53 2020, securing jobs on site but also

Whitepaper Medicine for the Pharmaceutical Industry: Cutting Costs in Infrastructure Processes BASF Files Legal Challenge in EU’s Fipronil Restrictions Cost-cutting pressures affect many sectors. However, in few industries do they impact innovativeness and long-term competitiveness LEGAL German Chemical Maker to Challenge Moratorium as immediately as in pharmaceutical manufacturing. To stay competitive, pharmaceutical companies have to explore every cost-cutting opportunity. They have already made some progress BASF has taken the European Com- Bayer and Switzerland‘s Syngenta, Announcing the challenge filed by outsourcing research & development, contract manufacturing and administrative non-core business processes to established partners. including the active ingredients in the General Court of the Euro- Infrastructure processes offer additional opportunities for optimization, but they rarely receive the attention they deserve. This will have mission (EC) to court over plans to in- clothianidin, imidacloprid and thia- pean Union, BASF said it remains to change soon. Several pharmaceutical companies have already begun to follow in the footsteps of the chemical and manufacturing clude the German group‘s insecticide methoxam. It applies to all crops convinced that the decline of the bee sectors and are steering their corporate ships into more cost-efficient waters. fipronil in a two-year moratorium on except winter cereals and plants population is caused by multiple and As they embark on this new venture, pharmaceutical companies should minimize their interfaces with service providers. After all, the not attractive to bees, such as sugar complex factors and that the ban of potential for cost-cutting correlates closely with the extent of transferred responsibility. products suspected of playing a role in beet. Fipronil, used in treatment of fipronil uses will not contribute to However, partnerships in infrastructure processes can be just as successful, as illustrated by Industriepark Höchst. At this deeply integ- the bee disease Colony Collapse Disor- maize and sunflower seeds, was in- protecting bees. It labeled the EC rated industrial estate, Infraserv Höchst, the site operator, has been providing services such as pharmaceutical-grade utilities, phar- cluded later following a recommen- move a “disproportionate applica- der (CCD). maceutical production logistics and clean room services for Sanofi, Sandoz and other partners for a long time. dation by the European Food Safety tion of the precautionary principle. This is an established model that transfers readily to other pharmaceutical sites and companies. Infraserv Höchst is already sharing their Agency, EFSA. Prior to the decision, we reached experience and portfolio with UCB in Monheim and Novartis Vaccines in Marburg. A new whitepaper published on CHEManager.com Germany — The moratorium After a two-year trial, the EC has out to the Commission, but unfor- explains how pharmaceutical companies can cut costs by up to 20% if they devote their attention to their core processes and rigorous- that took effect on Dec. 1 targets said it will “consider the newest sci- tunately our valid scientific studies ly outsource non-core processes. mainly the neonicotinoid class of entific information” and review the and evidence were not properly tak- insecticides produced by Germany‘s restrictions. en into account,” said Jürgen Old- eweme, senior vice president global We hope you find this whitepaper to be informative. product safety and regulatory af- fairs in the group‘s Crop Protection division. “This is why we have taken this step. Fipronil is an important technology in modern agriculture that growers count on.” BASF said the Commission had not considered all the scientific evidence available and also had breached EU pesticide legislation. The world‘s largest chemical group said it supports research pro- jects investigating the causes related © Scanrail - Fotolia.com to the decline of bee health and also is developing new products to control bee pests, pathogens and diseases. In this respect, it plans to market a prod- uct that controls the Varroa destruc- tor mite. Bayer recently announced it would focus research on the mite as a primary culprit in CCD. (dw) ▪

chemanager-online.com/en CHEManager Europe 11-12/2013 PEOPLE · PUBLICATIONS · EVENTS Page 15

Advanced Distillation Technologies

Distillation has his- Advanced Distillation torically been the main Technologies gives a method for separating deep and broad insight mixtures in the chemi- into integrated separa- cal process industry. tions using non-conven- However, despite the tional arrangements, in- flexibility and wide- cluding both current and spread use of distilla- upcoming process inten- tion processes, they still sification technologies. remain extremely ener- Containing abundant gy inefficient. Increased examples and indus- Stephan Sielaff has been named chief operating officer of optimization and novel trial case studies, this is Informex, January 21 – 24, 2014, Miami Archroma, a global leader in color and specialty chemi- distillation concepts can a unique resource that Informex will celebrate its 30th edition at the Miami Beach Convention cals, and the former textile, paper and emulsions busi- deliver substantial ben- tackles the most ad- Center with 400+ exhibitors and 3,500+ attendees. The convention offers nesses of Clariant, based in Reinach, Switzerland. Sielaff efits, not just in terms of significantly vanced distillation technologies – all an unparalleled opportunity to make business connections with leaders will oversee the business’ global production, manufac- lower energy use, but also in reduc- the way from the conceptual design across the fine & performance chemical markets including agrochemi- turing and integrated supply chain activities. Sielaff has ing capital investment and improving to practical implementation. cals, pharmaceuticals, biotechnology, construction, electronics, paints & significant materials and process industry expertise. He eco-efficiency. While likely to remain coatings or plastics. The event brings together an international mix of Stephan Sielaff has spent the past 8 years with Symrise, most recently the separation technology of choice motivated buyers, manufacturers, distributors and sellers of high value as the senior vice president Global Operations of the for the next few decades, there is 22 Advanced Distillation Technologies chemistry for 4 days of sourcing, education & networking. Flavor & Nutrition business. Previously, he held various no doubt that distillation technolo- Anton A. Kiss 22 www.informex.com roles in supply chain, innovation and engineering, as well as market- gies need to make radical changes John Wiley & Sons ing at Unilever. He holds a MS, chemical engineering from the Technical in order to meet the demands of the Price: €122.90 University of Dortmund, Germany. energy-conscious society. ISBN 13: 978-1119993612 4th Russia & CIS Executive Summit, February 20 – 21, 2014, Dubai Russia and the CIS (Commonwealth of Independent States) remains one Dr. Rolf Drewes has joined Songwon as vice president of the business of the regions with high potential in the oil and gas industry and at the sector Specialty Chemicals, effective Oct. 1. Drewes brings 25 years of Investment Banking same time one of the most challenging ones. Major companies are invest- industry experience and an international track record of leading techni- ing in new plants or modernizing existing facilities in order to improve cally challenging business units and building up new markets. Prior to In the constantly evolv- Wall Street. The Second operations, meet stringent quality standards requirements and increase joining Songwon, he held senior positions at Heraeus Precious Metal ing world of finance, a Edition includes both efficiency, profitability and competitiveness. The conference will gather and Ciba Specialty Chemicals. At Songwon, Drewes, who holds a PhD in solid technical foun- the technical valuation representatives of operating Oil & Gas Companies, Consultants, Financial chemistry from Ruhr University Bochum (Germany), will play a pivotal dation is an essential fundamentals as well & Legal Advisors, Ministry Officials, Licensors, and Contractors & Service role in developing and implementing a strategy to expand the global tool for success. Until as practical judgment Providers to discuss future strategies. Specialty Chemicals business with an emphasis on high value industries. the welcomed arrival skills and perspective to 22 www.europetro.com/en/summit_2014 of authors Josh Rosen- help guide the science. Dr. Greg Hughes has joined Codexis, a developer of engi- baum and Josh Pearl, This book focuses on the neered enzymes for pharmaceutical, biofuel and chemi- no one had taken the primary valuation meth- 4th Ubiquitin Research & Drug Discovery Conference, February 20 – 21, 2014, cal production as vice president, Strategic Alliance & time to properly codi- odologies currently used San Diego Product Development, effective Oct. 28.Prior to joining fy the lifeblood of the on Wall Street: compara- The conference is an intimate forum focused on the Ubiquitin Protea- Codexis, Hughes worked at Merck & Co. beginning in corporate financier’s ble companies analysis, some System and its potential for drug discovery. Session topics to be 2002 in a variety of roles, most recently as executive work-namely, valu- precedent transactions discussed include developing novel therapeutics targeting deubiquitinat- director, Enabling Technologies in the Process Chemis- ation, through all of the essential analysis, discounted cash flow anal- ing enzymes, ubiquitin-like modifiers, ubiquitin pathways in neurobiology, Greg Hughes try department with a primary focus in developing and lenses of an investment banker. ysis, and leveraged buyout analysis. and the proteasome structure and function. Speakers include experts implementing biocatalysis technology. Hughes holds a With the release of Investment from Genentech, Takeda, Celgene, CNRS - INSERM, Mayo Clinic, Harvard Ph.D. in organic chemistry from the University of To- Banking, Second Edition: Valuation, Medical School, Charité Berlin, Karolinska Institute or Scripps Research ronto and a B.S. in chemistry from the University of New Leveraged Buyouts, and Mergers & 22 Investment Banking Institute. Presentation slots are still available, abstracts can be submitted Brunswick. He completed his postdoctoral work at the Massachusetts Acquisitions, Rosenbaum and Pearl Joshua Rosenbaum, Joshua Pearl by January 20, 2014. Institute of Technology. once again have written the defini- John Wiley & Sons 22 www.gtcbio.com/conference tive book that they wish had existed Price: €83.90 Dr. Catherine Dick has been appointed to the new role of Aesica’s site when they were trying to break into ISBN 13: 978-1-118-65621-1 manufacturing manager at Cramlington, UK. Dick brings strong experi- PaintExpo, April 8 – 11, 2014, Karlsruhe ence and knowledge of operations at Cramlington to the task in hand, The international trade fair for industrial coating technology will present having joined the global contract development and manufacturing or- products and solutions for wet painting, powder coating and coil coating, ganization (CDMO) back in 2007 as the site’s Quality Manager. In 2010, Process Engineering for a Small Planet from pre-treating through paints, systems engineering and application she was promoted to head of quality for UK API, responsible for the technology right up to final inspection and packaging. In 2012, 410 ex- quality and regulatory compliance of all products manufactured across We live on a small planet with limit- save energy and reduce greenhouse hibitors from 24 countries welcomed over 8,000 visitors. These numbers both the Cramlington and the Queenborough sites. Dick holds a PhD in ed air, water, and mineral resources gas emissions, as well as invoking are expected to grow further in 2014. bioChemistry from Newcastle University and a degree in biochemistry and learn how to get other sound environ- 22 www.paintexpo.de and genetics from Durham. by with what we have. mental measures. Pro- Process engineers and cess Engineering for a Nadege Laborde has been appointed as president of No- operators do not need Small Plant offers viable Logichem Europe, May 20 – 22, 2014, Antwerp vasep’s Industrial Biotech business unit. This internal to look to exotic tech- global solutions to green LogiChem is Europe’s only strategic-level chemical supply chain and lo- promotion strengthens the business unit and is a key nology to make a con- technology. gistics event. The 2014 edition will again deliver top-line strategies from addition to the executive committee. Laborde joined tribution to combating leading chemical manufacturers. Key topics include the reduction in pro- Novasep in 2000 after qualifying as an engineer from the environmental is- cess, product and organizational complexity, growth from organizational Ecole Centrale, Paris. She started at Novasep as a pro- sues. This easy-to-fol- 2 Process Engineering strength and efficiency, people management - retention, exploring growth ject manager and expanded her responsibilities as an low handbook shows for a Small Planet potential for supply chain careers, optimizing supply chain processes, col- Nadege Laborde engineering manager in the US and Asia. Since 2009 how to operate and Norman P. Lieberman laboration along supply / value chains by applying state-of-the-art technolo- she has headed the system engineering and construc- retrofit process facili- John Wiley & Sons gies, and how to make supply chain a competitive advantage for a company. tion department and driven her multicultural team in ties to re-use existing Price: €73.90 22 www.logichemeurope.com France and China towards achieving both operational excellence and process equipment to ISBN 978-0-470-58794-2 customer satisfaction.

Tang Yong “TY” Ang has been appointed vice president of Dow Corning’s Compound Semiconductor Solutions, effective Oct. 1. In this newly cre- ated role, Ang will lead the company’s expanding business and report to the general manager of the Specialty Chemicals business. He joined Dow Corning from Lam Research where he held a number of key positions, NEW NAME including region vice president, Southeast Asia; vice president, Asia Pa- cific Region Operations. Prior to this, he worked 13 years at Chartered Semiconductor Manufacturing. Earlier, TY held positions of increasing EXTENDED RANGE responsibility at Texas Instruments and AT&T Consumer Products. He began his career in 1980 at Hitachi Electronics and holds a master’s in HIGH-LEVEL QUALITY business administration from the State University of New York/Singapore Institute of Management. CHEManager International is Dirk Frame has been appointed managing partner for Europe at T.A. Cook Consultants. A professional engineer the industry’s print and digital by trade with an MBA from Cranfield School of Manage- one-stop shop for business ment, Frame was previously managing partner for T.A. and market information. Cook North America. With over 25 years’ experience in providing expert strategic and operations advice to asset heavy businesses across the globe, he returns now to fur- Dirk Frame ther develop and grow the asset performance manage- ment consultancy’s core business in Europe. Comment- Das ist es! ing on his new role, Frame said, “Working for clients in entschieden von © beermedia - Fotolia.com the U.S. and Canada has allowed us to significantly widen Mike+Brandi 23.07.13 our experience base and helps us formulate better solutions for all clients. Ersteinsatz MD_14 I expect to use our knowledge to help accelerate growth of our European market over the coming years.”

Richard Segiel, Jr. has joined Almac as vice president of U.S. business de- velopment. He brings with him 23 years of experience in the contract http://bit.ly/ pharmaceutical development sector. Prior to joining Almac, Segiel held a CHEManager_International number of Business Development and Operational positions. Most recent- ly, he served as business development director of Intertek Pharmaceutical InternatI nal Services. Prior to that he worked with MDS Tricon, Celsis Analytical Ser- vices, and Pharmakon Research International. Segiel holds a bachelor’s www.chemanager.com degree in chemistry and business from the University of Scranton and an MBA in Marketing and Finance.

chemanager-online.com/en Page 16 AT A GLANCE CHEManager Europe 11-12/2013

European Health R&D Investments Stagnate for First Time in History Clinical Advance of the Year

A new report shows that European research and de- At the 9th annual Scrip Awards, the George D. Yancopoulos, M.D., Elias Zerhouni, MD, President Glob- velopment (R&D) investments in health have stagna- Phase 2a study of Dupilumab in Ph.D., President, Regeneron Labo- al R&D, Sanofi added: “On behalf of ted since 2010, and this is the first time after decades asthma was named “Clinical Advance ratories and Chief Scientific Officer, all of the men and women within our of annual increases. The report was commissioned of the Year” by Scrip Intelligence. said, “We appreciate the recognition organizations working diligently to de- by Janssen Pharmaceutica and the research was con- Dupilumab, a fully-human mono- that Dupilumab is one of the most velop this investigation treatment, we ducted by Deloitte Health Economics Group. clonal antibody that is in clinical de- exciting emerging clinical candi- are truly honored by this award. The velopment for treatment of asthma, dates in the industry. We also feel ultimate recognition for their innova- Healthcare Spending atopic dermatitis, and nasal polypo- that this award is additional valida- tive research, at the end of the day, is Healthcare spending in Europe has increased subs- sis is being developed by Regeneron tion of the overall depth and produc- when we are able to deliver improved tantially over the past three decades. A large part of Pharmaceuticals and Sanofi. tivity of our R&D team.” solutions to patients.” ▪ this increase can be attributed to the ability to pay. The total healthcare expenditure in the region amounts to €1.4 trillion, but the shares of the indivi-

Source: OECD 2012 dual countries are diverse. About 90% of the obser- ved cross-national variation in health spending across the OECD countries in 2001 can be explained simply by differences in GDP per capita. However, healthcare expenditure in European countries has risen faster than economic growth, gradually committing a far higher share of the countries‘ annual GDP to health- care (Fig. 1).

Future Healthcare Expenditure With an increasing demand for healthcare services due to population dynamics; supply of healthcare is growing as a result of technological advancements and technology conversions; and the potential for productivity gains is limited due to the nature of the healthcare sector. Unless societies will deny care to, for example, diabetes, dementia and cancer patients, all these factors point to rising healthcare budgets in the years to come (Fig. 2). With a wide range of new state-of-the-art technologies to anticipate, it appears that an increasing share of most countries’ economies Source: OECD will continue to be spent on healthcare services.

Clinical and Economic Burden Most of the burden of illness and mortality arises from non-communicable, often chronic, diseases Brazilian Way of Life – The official match ball of the 2014 FIFA World Cup in Brazil was unveiled on December 3th in Rio de Janeiro. (NCDs). Four examples were selected based on WHO The name “Brazuca” is an informal local term that describes national pride in the Brazilian lifestyle. The ball features a completely new prevalence data for Europe and disease-specific design with only six panels and a new surface. The most noticeable fact about the 2014 World Cup Ball made of high-performance healthcare spending in a number of countries. The chemicals and polymer materials is the flight speed, which seems to be much higher than with the current ball generation. Also, unlike increasing clinical burden of these diseases, for which the last Adidas World Cup balls, the Brazuca seems to flutter less, even if the shot is very fast. the incidence or prevalence is growing on average by 1% per year, will be reflected directly in healthcare

Volume 6 expenditure. In order to avoid a deterioration of care December 2013 to these patients, healthcare budgets have to incre- This issue of CHEManager Europe contains 1 ase by 1% per year just to cover the growth in patient the special supplement numbers (Fig. 3) and hence by 23% by 2030.

Healthcare R&D Investments The European Commission estimates that of all in- Source: Calculations based on sources mentioned in the report dustries, pharmaceuticals is the most R&D intensive Chemical Parks Life Science Clusters

Economic Perspectives

Europe – Americas – Asia (R&D investments as percentage of turnover) and the Investment Opportunities second largest R&D sector in Europe (Fig. 4). It is therefore one of the key contributors to a knowledge based economy operating in a global growing mar- ket. The total amount of health R&D in the European Union was €47 billion in 2011, of which 60% was in- vested by the pharmaceutical industry and 40% by Coming Up in the January/February issue of CHEManager International the member states and the European Commission. ▪▪ Interview with Celanese CEO Mark Rohr on the company´s strategy and vision This amount represents 3% of total healthcare expen- ▪▪ Green Chemistry Metrics in the Fine Chemical and Related Industries by Will Watson, Scientific Update diture in the region. The private investments have ▪▪ A Booming Business: The World Pharmaceutical Contract Research and Manufacturing Services Industry by Giuseppe Tamburini, stagnated for the first time, staying at €29 billion and CPA (Chemical Pharmaceutical Association) public investment decreased with 1% to €18 billion. ▪▪ API Manufacturing in the U.S. by Joshua Gilpatrick, Thomson Reuters Within Europe, the major investors in health R&D are ▪▪ Commoditization or the Aging of the Chemical Industry, Kai Pflug, Management Consulting – Chemicals Germany with a total of €9.4 billion, followed by ▪▪ Standardization Supports Faster Plant Planning Effective Planning Of Chemical Plants Through Optimized Engineering by France (€8.3 billion), the UK (€7.4 billion), Switzerland Ingo Kaiser, Siemens (€5.3 billion) and Italy (€2.4 billion). ▪▪ Find out all about our brand-new name! ▪▪ And much more! The full report is available for free on www.Janssen- HealthPolicyCentre.com Source: European Commission – EU R&D Scorecard 2012 Fresh from the press on Jan. 16 Adverting deadline is Jan. 7

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