3/2007 3/2007Aprilapril

3/2007 3/2007AprilApril

Markets & Companies Markets & Companies Cefic supports The N ewsPa P e r Study shows commitment to uncertainty surrounding emissions reduction for T he chemical aN d gas and oil prices Page 4 life scieN ces markeT s Page 5

Newsflow ‘Knowledgeable And Focused’ Market r eport UCB has sold all its shares held in Cytec Industries for E248 million, Analysis of Lost realising a capital gain of more than Azelis Is One of Europe’s Fastest-growing Distributors E20 million. UCB sold its surface spe- ince its formation in 2001, the Chemistry in the U.S. cialties business to Cytec at the begin- CHEManager Europe: Mr. Wenzel, Azelis has now grown to 32 com- ning of March. Consideration for the Azelis Group’s portfolio has The early years of this decade were some of the most difficult E panies operating across Europe. transaction was 1,190 million in cash for the business of chemistry in the U.S. High natural gas prices grown to 32 companies oper- Is there still room for expansion and 5,772,857 shares of Cytec. led to diminished competitiveness for domestic producers in cer- S here? In what other regions are ating in over 20 countries, making it tain segments, and combined with the downturn in the economy you looking to acquire busi- BASF said intends to reduce the size of in general and in manufacturing in particular they challenged one of the fastest growing chemical nesses? its supervisory board to 12 members the U.S. chemical industry. This combined with the after effects from 20 once it adopts the Societas distributors in Europe. The company’s of the Asian crisis, slow overseas economic activity, the strong U. Wenzel: We have built a suc- Europaea (SE) legal structure, the U.S. dollar and the movement of end-use customer industries strategy of growth through acquisi- cessful European distribution Financial Times Deutschland reported, overseas to negatively affect the trade balance in chemicals. group focusing on specialty citing a copy of the invitation to the tions reflects the ongoing trend in the The trade balance in chemicals (SITC 5), a surplus of US-$19.1 company‘s annual general meeting chemicals, polymers and related which it obtained. The report also industry: The number of M&A deals in services since 2001. Although said that Juergen Strube will remain we now have offices and staff U.S. Trade in Chemicals Figure 1 2006 totalled over €5 billion, a new (US-$ Billions) the head of the supervisory board in most European countries, until 2011. record for the distribution industry, there is still a need to establish $160 $25 ourselves in a few countries and $140 $20 Dupont said it was considering joint and there will be no slowing down also to expand the market range in some of our existing countries $120 $15 ventures and alliances with other in 2007. Azelis also switched private Indian firms for research and distri- by making “bolt on” acquisitions $100 $10 bution, The Economic Times reported, equity firms at the end of last year, that fit our criteria and complement our existing businesses. $80 $5 citing Dupont India chief executive from Cognetas to 3i, a move the com- Balwinder Singh Kalsi. Dupont has Examples of regions where we $60 $0 are actively considering acquisi- already entered into technical collabo- pany says reflects its determination $40 –$5 rations with GVK Biosciences and Bio- tions include Switzerland, Aus- for an international presence. Brandi con’s unit Syngene in the country. Last tria and the Netherlands. $20 –$10 month, the company had reported it Hertig Schuster asked Azelis CEO Udo $0 –$15 plans to invest more than US-$22.5 What criteria are considered 94 95 96 97 98 99 00 01 02 03 04 05 06 Wenzel about his company’s rapid when considering a company million to construct its first research Trade Balance (right axis) Exports (left axis) Imports (left axis) and development centre in India. for acquisition? growth, competition on the market Source: American Chemistry Council © GIT VERLAG Udo Wenzel Reichhold has named chemicals dis- and future plans for expansion. CEO of Azelis  Continues Page 18  Continues Page 3 tributor Univar as the company’s new distribution partner for polyester resins, gel coats, bonding paste and auxiliary products in the Benelux region. Univar has an extensive network of A Lanxess Growth Story distribution centres across Europe, the U.S. and Canada. Turnaround after Successful Portfolio Adjustment Nova Chemicals has signed a letter of he Ion Exchange Resins recent years. How did you M. Zobel: Apart from my doc- The second initiative is to go Germany – this is one of the key intent with Ineos to expand the two achieve this? torate degree in chemistry and for value. The important thing differentiating elements against Business Unit (ION) is companies‘ existing European joint an MBA, I have experience in a for our sales and marketing our competition. venture to include North American part of Lanxess’ Perform- M. Zobel: The years be- variety of areas such as corpo- organisation is to be truly sen- We have a unique syn- assets. The proposed expansion agree- T fore 2004 were difficult rate strategic planning, M & A, sitized that volume does not au- thesis chemistry pathway in ance Chemicals segment, account- ment would include Nova’s North for the ion exchange res- finance, restructuring, change tomatically mean adding value Leverkusen, Germany, which American styrene monomer and solid ing for roughly 10 % of the over- ins business because of management, marketing and to a business and that a pocket allows us to take a unique polystyrene assets, as well as the com- market conditions, com- research. This in general is my price/margin is of importance position, especially for specialty all turnover. The business unit is pany‘s interest in the European joint petition, cost structures source to contribute. and not the invoice price. For products – none of our competi- venture Nova Innovene. Ineos would a key contributor to the Lanxess and missing products for In particular, besides all the sales people this is often diffi- tors has this kind of chemistry contribute its North American sty- certain applications. We strategic redirection of the BU, cult to understand, particularly route. These two elements allow success story. Its international ori- rene and polystyrene assets, as well worked hard on a lot of I launched two initiatives which if they were punished in the past us to position ourselves very as its interest in Nova Innovene. The entation makes for a strong market issues regarding our cost mean a continuous change when losing volumes and if in- well in the global market. transaction was expected to generate structures and our prod- process and which are of very centive systems were primarily Also, we are one of only two presence being the number 1 ion revenues of approximately US-$3.5 uct portfolio. We have importance to our success: The based on volume. In that sense companies that are full-portfolio billion per year. exchange resins supplier in Europe, seen a successful product first one was to understand the we are working hard on a series providers for ion exchange res- portfolio adjustment sup- perceived value of our prod- of topics related to that “go for ins. Other competitors’ ranges number 2 in Asia, and number 3 ported by our innovation uct from a customer point of value” initiative. focus on certain elements of the in NAFTA, underlining an overall capabilities and we are view – not ours. This means market demand. now in a position to push listening to a customer, under- What are the core competences Furthermore, we are not number 2 position. Brandi Hertig powered BY our specialty products standing the customer’s value and key technologies of ION, selling a product itself – it’s Schuster spoke with Dr. Michael Dr. Michael Zobel, Head of the business unit Ion portfolio more in which chain and trying to match his what is your unique selling not enough just to put a sack Exchange Resins (ION) of Lanxess’ Performance we can offer truly unique individual needs with what our point? of granules on the table. Our Zobel about the custom-designed Chemicals segment solutions to our custom- products can do. Here is value customers simply cannot work ion exchange resins and the appli- ers. Furthermore, we extracted hidden for both – the customer M. Zobel: Regarding technology, with that; technical advisory more value out of the business by and us – so a true win/win situ- we are one of the global lead- competence is also necessary. cation areas, the current situation CHEManager Europe: Dr. Zobel, restructuring and focussing our ation. We are working hard on ers in the ion exchange resins We have recently conducted and future perspective of the busi- you took over as head of the Ion people on value not volume. that with our sales forces and business. We have the largest an anonymous survey where Exchange Resins Business Unit technicians, but our success and most modern plant with we were highly rated among ness unit, key market trends and the in 2005, and ION has success- What did you contribute person- proves that this is a worthwhile monodisperse technology in market environment. fully managed a turnaround in ally to this success? effort. the world located in Bitterfeld,  Continues Page 18

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[email protected] page Markets & coM panies CHEManager Europe 3/2007

Content

Front page You can Judge a Book by its cover �� 8 the Great challenge �� 14 Reliability and Compliance in Product Labeling Power Plant Business and Technology Today Market report �� 1, 3 Lothar Balling, Siemens Sebastian Goettel, Schema Electronic Documentation Solutions Analysis of Lost Chemistry in the U�S� Dr. Thomas Kevin Swift, American Chemistry Council agile systems and technology �� 8 industrial Locations 15 – 16 ‘knowledgeable and Focused’ �� 1, 18 Small and Mid-tier Pharmaceutical Manufacturing Azeli’s One of Europe’s Fastest-growing Distributors Bob Raffo, Pro2Tec Back on the Map �� 15 Interview with Udo Wenzel, Azelis ECSPP Wants to Bring More Chemical Investment to Europe Interview with Peter Anderton, ECSPP a Lanxess Growth story �� 1, 18 take a closer Look �� 9 Turnaround after Successful Portfolio Adjustment Insights from an Intra-industry Comparison singapore – asia’s chemicals Hub �� 16 Interview with Dr. Michael Zobel, Lanxess Thomas Friedli, Thomas Gronauer, Daniel Tykal, Opportunities Abound Amidst Asia’s Growing Need for Energy Li Ling Soon, Singapore Economic Development Board University of St. Gallen, Switzerland Markets & companies 1 – 6 the australia story �� 16 16 Years of Economic Growth portfolio �� 4 production 11 – 14 Gregor Rodhüser, Fleishman-Hillard Germany

eU energy action plan �� 4 Cefic Supports Commitment to Emissions Reduction Under construction �� 11 chemicals 17 – 18

Uncertainty surrounding Gas, oil prices �� 5 innovative Measurement technology �� 11 Uncertain start to 007 �� 17 Top Concern for Energy Executives in 2007 Cost-effective Level Measurement Can 2006 Be Repeated? Dr. Moncef Hadhri, Andrea Weigel, Cefic collaboration �� 6 Stefan Menschel, Endress+Hauser

Going With the times �� 1 Business partners 6 people · events · awards 19 Change of Engineering Tools from Process Industry’s Perspective

Dr. Ronald-Alexander Klein, BASF pharmaceuticals 7 – 10 at a Glance 0

the Digital petrochemical plant �� 13 Managing risk �� 7 index �� 0 Achieving FDA Compliance Using ISO 14971 What Will it Mean to You? Victoria Lander, Waters Corporation Stanley de Vries, Invensys Process Systems imprint�� 0

Bayer HealthCare Announces Job Cuts Chemcentral: Brenntag Overbids Univar

Bayer HealthCare has pub be a reduction of 3,150 jobs maceutical company with Two global chemical distrib which period Univar may de ment with Univar in favour lished concrete plans regard in Europe. In addition, 1,000 competitive cost structures,” utors are vying for privately cide, but is not required, to of a competing offer if it pays send your ing the previously announced jobs in the U.S., 750 jobs in said Werner Wenning, chair owned U.S. rival Chemcen negotiate with Chemcentral Univar a termination fee of synergy goals. The integration the Asia, Pacific and Japan man of the Bayer group man tral: After Univar made a bid to make adjustments in the US$22 million, the Dutch article ideas to of the activities of the former region as well as 1,200 jobs agement board and the super of US$600 million in cash, terms and conditions of their company said. visory board of Bayer Schering Brenntag followed suit days merger agreement,” Univar Privately held Chemcen Pharma. “We said right from later with a competing bid of said in a statement. The com tral, based near Chicago, had the cHeManager “We said right the start of the integration that US$700. pany also said that Brenntag’s US$1.4 billion in 2006 reve job cuts would be necessary “If the Chemcentral board nonbinding offer, which is nues and distributes specialty from the start of e urope team in order to achieve the syn of directors determines that a subject to due diligence and and commodity chemicals. the integration ergy targets. These essential competing proposal is superior other conditions, included a streamlining measures are to Univar’s, Chemcentral must reduced termination fee pay E www.univarcorp.com that job cuts to be fairly implemented in give Univar advance notice of able to Univar. Chemcentral www.chemcentral.com a socially acceptable process three business days, during may end the merger agree www.brenntag.com would be ne – balanced across the globe. Werner Wenning This includes the reduction Bayer’s board chairman cessary in order of the number of locations, Three Companies to Take Over Grupo Ipiranga in Latin America and Canada cutting down on structural to achieve the are affected. and personnel overcapacity, In one of the largest business Grupo Ipiranga, one of the shares of the families that Of the 6,100 jobs world the concentration of research transactions ever conducted in Brazil’s largest and most tra control Grupo Ipiranga. In the synergy targets.” wide there will be a reduction and development activities as Brazil, Petrobras, Grupo Ultra ditional groups, operates in second phase, Grupo Ultra of 1,400 in the global research well as the harmonization of and Braskem have come to an the industries of oil refinery, will make a public offering Brandi Hertig schuster Schering, Germany, with Bay and development functions structures and processes in understanding for the acqui petrochemical products and of the common shares held editor-in-chief er HealthCare’s pharma divi and 1,850 in production by marketing and administra sition of all Grupo Ipiranga’s fuel distribution. Last year, by Grupo Ipiranga’s minority tel.: +49 6151/8090-186 sion of shall result in annual 2009. Approximately 2,850 tion.” businesses, thus consolidating its net revenue amounted to shareholders. [email protected] savings of €700 million from positions from central admin Approximately 1,500 jobs and expanding the businesses R$30 billion, with an EBITDA 2009. Adjustments to per istration as well as local and will be shed in Germany. Ber of the petrochemical and fuel of R$1 billion and net profit sonnel requirements and the regional structures will be lin will remain the largest distribution industries.The of R$534 million. E www.braskem.com.br consolidation of processes reduced. Berlin employees of location and the headquarters transaction is worth nearly The first phase will be the E www2.petrobras.com.br and systems shall each con the former Schering reacted of Bayer Schering Pharma. US$4 billion. take over, by Grupo Ultra, of E www.ultra.com.br tribute about half to the tar with protests, and the union Key global functions and busi geted global synergy effects. threatened to delay Schering’s ness areas will be consistently Reducing the overlap between integration into the Bayer drawn together in Berlin. Elsevier Acquires Beilstein Database the two companies will result group. in approximately 6,100 job “We want to create an in Elsevier announced the ac or updated close to 5 million from 1771 to date. It contains cuts worldwide. There is to ternationally successful phar E www.bayerhealthcare.com quisition through its subsidi compounds to the database over 9.8 million compounds, ary MDL Information Systems, and has helped to build a 10 million reactions and 320 of the Beilstein Database, the strong and established cus million experimental data on Dr. roy Fox Lonza Grants UCB License world’s largest compilation of tomer base in both the cor chemical properties. It also editor chemical facts and the pre porate pharmaceutical and contains over 900,000 original tel.: +49 6151/8090-18 Lonza has granted UCB a non development purposes. An of which have not been dis mier database in the field of academic sectors. As a result author abstracts from 1980 exclusive, worldwide license option to obtain a license to closed. Over 80 biotechnology organic chemistry. Elsevier of the agreement announced present, as well as pharma [email protected] to their GS Gene Expression use the GS Gene Expression and pharmaceutical compa has been exclusively involved today, Elsevier will assume cological and ecotoxicological System (GS: glutamine syn System for commercial pur nies and over 70 academic in both the production and ownership and acquire the data describing the bioactivity thetase). The research evalu poses is included in the agree laboratories worldwide have marketing of the Beilstein rights to the Beilstein Data of organic chemicals. ation agreement covers the ment. Standard payments and successfully used the system. Database under a partner base. use of the GS Gene Expres License fees are within the E www.lonza.com ship agreement since 1998. The Beilstein Database E www.elsevier.com sion System for research and contract, the financial terms E www.ucb.com Since then, Elsevier has added covers organic chemistry E www.mdl.com

[email protected] CHEManager Europe 3/2007 MarketS & CoM panieS page

Market r eport Analysis of Lost Chemistry in the U.S.

E Continued page 1 been cited for this deterioration of from the U.S.’ net trade with China in and fixtures and fabricated metal trade in goods. Currency fluctua- downstream manufactured goods. products has also contributed to Change in Lost Chemistry in Selected Figure 3 billion in 1997, fell to a deficit in tions, the emergence of export-ori- The same I-O analysis performed higher lost chemistry. This analysis Industrial Categories in U.S. Trade with the World, 1997–2006 (US-$ Million) 2002 and has remained in negative ented manufacturing low-labour cost for US trade in goods with the world shows that China’s US-$14.4 billion Textiles & Fabrics territory since. centres in East Asia and weak global was also conducted for China. In this net change in lost chemistry accounts Other Mining These deficits were the first that demand for U.S. exports have been analysis, we include Hong Kong as for 42 % of the total US-$34.1 billion Printing & Publishing the industry has posted since at least the leading factors. The American part of greater China because Hong in cumulative lost chemistry since Agriculture the 1920s (the earliest for which consumer’s propensity for foreign Kong serves as an entrepot for the 1997. Wood Products there are consistent trade data), goods is another factor. mainland. In 2006, the chemistry Petroleum Products Paper and possibly the first since before More recently, the large U.S. content of net U.S. downstream Conclusion Fabricated Metal Products the Jamestown colony exported pot- deficit in trade and in the current industry trade with China was Oil and Gas ash to England. Figure 1 shows the account has resulted in a weaker dol- –US-$19.4 billion, equivalent to 38 % The U.S. chemical industry has lost Miscellaneous Manufacturing sharp decline in the trade balance in lar. This will serve to boost exports of the total US-$50.9 billion in lost chemistry with virtually all of its Electrical Equipment & Appliances chemicals over the past decade. and reduce imports, thus correcting chemistry for that year. This share major trading partners and in most Primary Metals Transportation Equipment some of this imbalance. To a certain has been rising. downstream end-use customer Plastics & Rubber Products Trade Deficit Centred in Pharma extent, this may be occurring in Between 1997 – 2006, there was industries. While cumulative lost Computers & Electronics some areas. A portion of the deficit, a US-$14.4 billion net change in lost chemistry of US-$34.1 billion since –$5,000 –$4,000 –$3,000 –$2,000 –$1,000 –$0 $1,000 Deteriorating trade performance however, reflects competitiveness chemistry for the period through 1997 is not trivial by any measure, Source: American Chemistry Council © GIT VERLAG abated in 2006, when a global issues and structural imbalances deteriorating goods trade balances this amount could be compared to economy growing at its fastest pace and, as a result, turning the deficit with China in downstream industries. industry shipments. If one were to in three decades, the effects of a around will be difficult. The chemistry content in computers layer this lost chemistry on top of the 9.5 % of industry shipments, both di- in their trade with the world, and lower dollar and renewed com- and electronics has experienced the US-$637.1 billion in U.S. chemical rectly (in chemicals trade) and indi- if their chemistry needs were sup- petitiveness (arising from a higher Quantifying Lost Chemistry largest change (–US-$2.8 billion) and industry shipments (NAICS 325) dur- rectly (chemistry content in the trade plied by U.S. production, then U.S. oil/natural gas price relationship) in is followed by textile mill products ing 2006, it would be the equivalent of downstream industries). chemical industry shipments would combination with tightening global Employing standard input-output (–US-$2.3 billion), plastics and rub- of 5.4 % of shipments. The direct loss In other words, the 2006 ship- be even higher. supply/demand balances in many (I-O) analysis, and the total require- ber products (–US-$1.9 billion), from the cumulative net change in ments of the U.S. chemical indus- segments caused growth in exports ments table from the Bureau of Eco- apparel (–US-$1.8 billion), leather the direct chemistry trade balance of try would be US-$698 billion if the and allied products (–US-$1.3 bil- $26.5 billion since 1997 is equivalent conditions of 1997 were to prevail, E Contact: lion), and electrical equipment and to 4.2 % of industry shipments. The with no loss of the chemical indus- Dr. Thomas Kevin Swift U.S. Trade in Goods Figure 2 appliances (–US-$1.0 billion). cumulative lost chemistry and the try’s trade surplus or the severe American Chemistry Council (US-$ Billions) Leather and allied products large- net change in the chemistry trade deterioration of trade balances in Arlington, Virginia, U.S. $2,000 $0 ly consists of footwear and miscel- combined amount to US-$60.6 bil- downstream customer industries. Tel.: +1 703 741 5932 $1,800 –$100 laneous manufacturing includes toys lion in lost business. Thus, in total, This examines just the cumulative Fax: +1 703 741 6085 $1,600 –$200 and sporting goods. The imbedded lost chemistry from deterioration of change in both. If downstream end- [email protected] $1,400 –$300 chemistry in net trade in furniture the U.S. trade in goods amounts to use industries maintained a balance www.americanchemistry.com $1,200 –$400 $1,000 –$500 $800 –$600 $600 $400 –$700 $200 –$800 $0 –$900 94 95 96 97 98 99 00 01 02 03 04 05 06

Trade Balance (right axis) Exports (left axis) Imports (left axis)

Source: American Chemistry Council © GIT VERLAG SIFLOW FC070

in chemicals to accelerate. Total nomic Analysis (BEA), it is possible Coriolis mass fl ow transmitter chemistry exports grew 13 % in 2006 to estimate the amount of chemis- reaching US-$135.0 billion, a record. try inputs into agricultural, mining As easy to install as playing a CD At the same time, imports grew at and manufactured goods that have a slower 11.3 % pace and the trade been impacted by the deterioration deficit shrank to US-$7.3 billion, the in trade. The lost chemistry content third highest on record. Since 1997, of the net trade position of customer the trade balance in chemistry has industries totalled to US-$50.9 bil- deteriorated a cumulative US-$26.5 lion in lost chemistry for 2006. That billion. That is a US-$26.5 billion is, the embedded chemistry or chem- swing from surplus to deficit. istry content of the net trade in these The trade deficit in chemicals is downstream industries amounted to primarily centred in pharmaceuti- US-$50.9 billion. cals. Excluding pharmaceuticals, the The deterioration in the trade bal- trade balance in chemicals is positive ance for plastic and rubber products although it weakened earlier in the in particular has been pronounced. decade for many of the reasons cited This involved a swing from a positive earlier. Other segments experienc- US-$271 million net export of chem- ing trade deficits include inorganic istry in the content of the industry’s chemicals, fine chemicals, and some trade balance in 1997 to a large defi- specialty chemical segments. cit or lost chemistry position of US- $3.3 billion in 2006. This industry in ‘Lost Chemistry’ particular is noteworthy as it is the largest direct purchaser of the goods Beyond the direct effects of negative and services of the chemical indus- trade on the potential output of the try, largely plastic resins, synthetic chemical industry, however, is the rubber, plasticizers, flame-retard- depressing effect on the trade per- ants, other plastic additives, carbon formance of its downstream cus- black and various rubber processing tomer industries. The products and chemicals. services of chemistry are converted In addition to the direct US-$26.5 into thousands of manufactured billion impact of declining chemicals consumer and industrial products. trade between 1997 and 2006, it is Many of these products have also possible to examine and quantify the experienced declining trade bal- change in the net chemistry content ances in recent years. To the extent during this period. The results of that there are changes in the trade such an examination suggest that the of the goods downstream that con- business of chemistry has accrued tain chemistry, the entire chemical an additional US-$34.1 billion in lost industry is affected. This is referred chemistry since 1997 (fig. 3). to as lost chemistry. Lost chemistry refers to the potential chemistry con- China And The U.S. tent of these goods that is lost when the production of those products During the past several years, much occurs outside the U.S. through loss has been said about China emerging of exports or replacement of domes- as the “factory floor” to the world. tic production via imports. Between 1997 and 2006, China’s E20001-F190-P730-X-7600 The health of the U.S. chemical overall industrial output increased industry is dependent on the health 12.9 % per year on average. In con- of the rest of manufacturing, the sifl ow trast, industrial output in the U.S. Capable of measuring all liquids and gases, SIFLOW FC070 masters the full repertoire primary customer industries for grew only 2.5 % per year during of fl ow applications and industries. chemicals. This analysis represents the same period. As manufacturers SIFLOW FC070 is an ultracompact, space-saving and versatile coriolis mass fl ow one means of examining the effects shift operations to China, the U.S.- of de-industrialisation in the U.S. In based chemistry that would be used transmitter with seamless integration ability: the self-confi guration and communication this analysis, our annual quantifi- to make those goods domestically is functionality for quick and total integration into all SIMATIC automation systems. cation of the lost chemistry in non- potentially lost. The chemistry may Install effortlessly, empowered by … chemical agricultural, mining and no longer occur in the U.S. Q Direct integration into SIMATIC S7 automation system s manufactured goods is updated. Unlike the rest of the manufactur- Q User interface standardized with SIMATIC Manager, PCS 7 and SIMATIC PDM ing sector, the U.S. chemical industry Q Compatibility with the entire range of SITRANS F C coriolis sensors Trends In Goods Trade has consistently maintained a trade Q Ultra-compact size: encapsulated in a 40-mm S7-300 housing surplus with China that has ranged … as easy as playing a CD. The U.S. trade deficit in goods bal- between US-$1.3 billion and US-$2.4 looned from US-$180.5 billion to billion between 1997 and 2006. Off- Lose Less. Keep More. US-$763.6 billion between 1997 and setting this surplus, however, is a www.siemens.com/fl ow • www.siemens.com/processinstrumentation 2006 (fig. 2). Several factors have very large lost chemistry content

[email protected] page Markets & CoM panies CHEManager Europe 3/2007 EU Energy Action Plan Cefic Supports Commitment to Emissions Reduction

efic said it endorses the move icy effects on the environment, competitiveness and society is needed. towards a more coordinated, cohe- Cefic supports the Energy Action sive and integrated energy policy Plan’s emphasis on the central role C of market mechanisms to achieve for Europe, a position that was reinforced cost-effective emission reductions. by the spring council’s adoption of the Euro- In its current form, the EU Emissions DSM Acquires Pamako Royal DSM has acquired acquisition of Pamako in Trading Scheme (ETS) leads to huge, pean Energy Action Plan. Cefic supports an Zurich from FMS Enterprises Migun. The acquisition includes Pamako’s tech- unjustified transfer of resources from nology for the production of UHMWPE (Ultra High Molecular Weight Polyeth- energy policy striving for further emission the energy consumers to the energy ylene) based products. DSM will further develop and improve this technology, producers – known as windfall profits reductions through energy savings, additional and incorporate it in its existing business for Dyneema fibre and Dyneema UD – without encouraging enough reduc-

(UniDirectional bullet resistant sheet). No financial information was given. increases in energy efficiency, increased use tion in CO2 emissions. As a member E www.dsm.com of the ETS review group set up by of renewable energy and better international the European Commission to advise Degussa Considers U.S. Alkoxides Production The RAG subsidiary Degus- cooperation. on a possible reform of the system for sa said is strengthening its commitment to producing alternative energy post 2012, Cefic said it will propose to sources from renewable raw materials. The specialty chemicals company The organisation said the Europe- carefully consider the allowance al- plans to construct a 60,000-mt facility at its North American Mobile, Ala- an chemical industry can make an location according to performance. bama (U.S.), site for production of alkoxides, which are used as catalysts important contribution in meeting “In addition, interim solutions need in biodiesel production. The investment volume lies in the low two-digit this ambitious challenge. Its products to be found now,” said Cefic Director million euro range. Degussa is currently meeting the increasing demand and research capabilities can play a General Alain Perroy. “The chemical for biodiesel through its site at Lülsdorf, Germany. “But an additional pro- decisive role in the fight against cli- industry cannot afford to wait until duction facility in North America is desirable in the interests of speed and mate change: for example, the chemi- 2013.” customer proximity,” said Dr. Thomas Haeberle, head of Degussa’s Building cal industry is essential to the manu- to emission reductions. Europe can- when considering further greenhouse The European chemical indus- Blocks Business Unit. not solve the global warming problem gas emission reduction measures and try also strongly backs the aim to E www.degussa.com alone. Furthermore, the overall con- mandatory use of renewable energy achieve functioning energy markets. “The chemical industry tribution of the chemical industry to sources. Therefore, a more differenti- Cefic calls for the urgent development Solutia to Sell Dequest Solutia announced that it will sell its water treat- society should be taken into account ated and in-depth assessment of pol- of concrete Commission proposals ment phosphonates business, Dequest, to Thermphos Trading for US- cannot afford to wait based on the Spring Council’s recom- $67 million in cash. The parties will also enter into a lease and operat- mendations. “The high energy prices ing agreement under which Solutia will continue to operate the Dequest until 2013.” What is the aim of emissions trading? – which result to a significant extent facility to produce Dequest products exclusively for Thermphos at Solutia’s from malfunctioning energy markets plant in Wales, U.K. The deal’s closing is subject to certain government and Alain Perroy, Cefic director general The Emission Trading Scheme (ETS) is a cornerstone in the fight against climate in combination with the ETS – pose an regulatory approvals and authorisation by the bankruptcy court overseeing change. It is the first international trading system for CO2 emissions in the world. It immediate threat to the global com- Solutia’s reorganisation. Solutia plans to seek bankruptcy court approval covers over 11,500 energy-intensive installations across the EU, which represent close petitiveness of the European chemical of the bidding procedures and other aspects of the auction process in facture of biofuels, lightweight high industry,” Perroy said. “This is why to half of Europe’s emissions of CO2. These installations include combustion plants, April. performance materials for transpor- oil refineries, coke ovens, iron and steel plants, and factories making cement, glass, transitional measures for energy- E www.solutia.com tation or enhanced housing insula- lime, brick, ceramics, pulp and paper. intensive sectors are needed until E www.thermphos.com tion. And the industry has already energy markets function properly.” The aim of the EU ETS is to help EU Member States achieve compliance with their contributed substantially to the de- commitments under the Kyoto Protocol. Emissions trading does not imply new Air Liquide Acquires Linde Gas UK Air Liquide has announced the pur- velopment of low carbon technologies environmental targets, but allows for cheaper compliance with existing targets under chase of Linde Gas UK. The transaction is based on an enterprise value of and increased energy efficiency in its E Contact: €105 million, and its completion is subject to approval by the Europe- own production processes. the Kyoto Protocol. Letting participating companies buy or sell emission allowances European Chemical Industry Council — Cefic an competition authorities. Linde Gas UK has total revenues of around The European chemical industry means that the targets can be achieved at least cost. If the Emissions Trading Scheme Brussels, Belgium €60 million derived from diversified industrial, medical and homecare cus- encourages Europe’s striving for lead- had not been adopted, other – more costly – measures would have had to be Tel.: +32 26 767211 tomer base throughout the UK. ership on climate change and strongly implemented. Fax: +32 26 767300 Air Liquide entered the UK market in 2004, following the acquisition of supports the Commission’s efforts to E ec.europa.eu/environment/climat/emission.htm [email protected] the local Messer operations. The company said the acquisition will help Air obtain an international commitment www.cefic.be Liquide to almost double its size in the UK. In addition, 30 % of the acquired activities are in the medical gases and the homecare services markets, a key Air Liquide growth driver and one in which the group is currently not present in the UK. Akzo Nobel Divests Business Hexion Reports Improved Results E www.airliquide.com E www.linde-gas.co.uk Akzo Nobel said it has Hexion Specialty forest product resins and formalde- divested its Akcros Chemicals improved hyde applications. BASF Coatings Takes Over R-M Sales Activities BASF Coatings Services is Chemicals PVC ad- “We have just one more both the fourth taking over major parts of Michel Deris in Sault-les-Rethel, France. BASF ditives business to quarter and fiscal Which factors hampered a better Coatings is acquiring Château-Arnoux Peinture in Château-Arnoux, France. UK-based private divestment to finalise year 2006 results. result? Michel DERIS’s and Château-Arnoux Peinture’s sales activities with regard investment firm GIL Full Year 2006 sales to automotive refinish paints and non-paint products will be integrated into Investments. Finan- before completing the were US-$5.2 billion, C. Morrison: Rapidly escalating raw BASF Coatings Services, France. The companies have not provided informa- cial details were not a 17 % increase over material costs continued to create a Leif Darner strategic realignment Craig O. tion on the purchase price. disclosed. Under the Morrison, chair- fiscal year 2005. Of negative lead-lag effect in the fourth E www.basf-coatings.de terms of the deal, the company’s man and CEO the 17 % increase, quarter 2006. However, we continued sites in Eccles, UK, and New Bruns- of our chemicals Hexion Specialty acquisitions account- to aggressively pursue pricing actions Lilly Announces Acquisition of Hypnion Eli Lilly and Hypnion. have signed a wick in the U.S. – along with all of Chemicals ed for 12 percentage for both contract and non-contract definitive merger agreement whereby Lilly will acquire Hypnion, a privately the approximately 160 employees at portfolio.” points when compared to 2005. Full customers to recapture raw mate- held neuroscience drug discovery company focused on sleep disorders. The these locations – will be transferred year operating income increased by rial price increases. We were gen- transaction has received the requisite approval of Hypnion stockholders and to the new owner. 38 % to US-$286 million, supported by erally pleased with our progress to is expected to close near the end of the first quarter of 2007, contingent An agreement has also been ness, which will continue to operate lower selling, general and administra- restore margins, although our efforts upon clearance under the Hart-Scott-Rodino Anti-Trust Improvements Act reached whereby Akzo Nobel will under its current name,” explained tive expenses, continued realization were hampered by the persistent rise and other customary closing conditions. Financial terms of the deal were continue to operate two smaller, Leif Darner, member of Akzo Nobel’s of synergies and lower transaction not disclosed. related production operations in board of management responsible for costs compared to the similar year E www.lilly.com Greiz, Germany, and Itupeva in Bra- chemicals. “This transaction means ago period. 2006 operating income “Key raw materials at E www.hypnion.com zil. Employees at these two locations – that we have just one more divest- was negatively impacted by increased who will provide toll production serv- ment to finalise before completing the integration costs when compared to historically high levels.” Rhodia Sells Nylstar Stake Rhodia will sell its 50 % stake in Nylstar for €1, to ices to the new owner – will therefore strategic realignment of our chemi- 2005, as well as the continued rise in a third party agent acting on behalf of a consortium of Nylstar’s credit banks. remain with Akzo Nobel. cals portfolio.” raw material costs and the delayed SNIA, Rhodia’s partner in this joint venture, has also signed an agreement “Transferring the bulk of the PVC timing in contractual pass through of in raw material costs that contin- to sell its 50 % stake. The sale of the stake in Nylstar will be effective once additives activities to a new owner E www.akzonobel.com certain raw material cost increases to ued longer than we had previously the necessary regulatory formalities have been completed. is the best way forward for the busi- E www.gilinvestments.com customers. In the fourth quarter of anticipated. This agreement forms part of the financial restructuring of Nylstar 2006 revenues were US-$1.31 billion through a debt/equity swap to give the company a restructured balance compared to US-$1.14 billion during How do you rate the chances for sheet and a significantly reduced level of debt. Nylstar will now be in a the prior year period, an increase of further improvements in 2007? better position to ensure its development. Rhodia will also remain a raw approx. 15 %. The operating income material supplier to Nylstar. Schering-Plough Buys Organon Sciences improved 34 % to US-$59 million. C. Morrison: Overall, our outlook for E www.rhodia.com Schering-Plough has Quarterly Segment EBITDA increased revenue and Segment EBITDA growth E www.nylstar.com announced that it will 11 % to US-$124 million in 2006. in 2007 remains positive and we are purchase Organon “We expect a smooth encouraged by the strength of Hexion’s Dow Polyurethanes to Acquire Hyperlast UK, Autothane Dow Polyurethanes, BioSciences (OBS), CHEManager Europe: What were diverse end markets and a more favo- a business unit of the Dow Chemical Company, said it plans to acquire a wholly owned and efficient transition.” the key growth drivers for Hexion in rable raw material environment. In ad- Hyperlast, a UK polyurethanes elastomers systems business, and Autothane, subsidiary of Akzo 2006? dition, Hexion’s Phase I synergy targets a manufacturer of advanced automotive suspension components, pending Nobel, for €11 billion continued to be achieved as planned, regulatory approval. Hyperlast UK and Autothane, subsidiaries of Brit- Fred Hassan, chair- in cash. The price is the animal health business, Intervet, C. Morrison: The diversity of our with US-$25 million in synergies re- ish Vita, specialise in the development of polyurethane elastomers for the man and CEO, well above the level with sales of approximately US-$1.5 portfolio of thermoset resins helped alized this quarter. We remain confi- marine, engineering resins, oil and gas pipeline, and automotive industries. Schering-Plough of up to €9 billion billion in 2006, is one of the top three to improve our fourth quarter 2006 dent in our ability to achieve the full No further details related to the transaction were disclosed. analysts had expect- animal health care companies glo- results as we experienced strong cus- balance of our US-$125 million Phase E www.dow.com/polyurethane ed Akzo to achieve in an initial public bally, with products treating a broad tomer demand for a number of our I synergies. We have also identified E www.britishvita.com offering. The transaction is expected array of animals and disease states products, including: epoxy resins and US-$50 million in Phase II synergies. to be completed in the second half “Given the complementary nature of intermediates, phenolic specialty res- Celanese Completes Sale of Oxo Products, Derivatives Businesses Celanese of the year, after consultation with our businesses and the track record ins, oilfield services and international E www.hexion.com Corporation said it completed the sale of its oxo products and derivatives social partners, and clearance from of Schering-Plough’s management businesses, including European Oxo (EOXO), a joint venture between Cela- regulatory bodies. Schering-Plough team in executing transformational nese and Degussa , to Advent International, for the purchase price of €480 said the purchase would boost earn- change, we expect a smooth and Süd-Chemie: Increased Sales for 2006 million. The transaction excludes limited business activity in Turkey, which ings and lead to annual synergies of efficient transition that will allow remains subject to customary regulatory review. The sale includes oxo and US-$500 million within three years. It us to unlock more value from the Süd-Chemie said it will significantly said sales are expected to reach just derivatives businesses at Celanese’s Oberhausen, Germany, and Bay City, will finance the deal through a mix of Organon BioSciences products and exceed its group targets previously over €1 billion and the EBIT around Texas, facilities as well as portions of its Bishop, Texas, facility. The sale cash, debt and equity. pipeline than would have been possi- forecast for the 2006 financial year of €83 million. This rise in earnings is also includes EOXO’s facilities within the Oberhausen and Marl, Germany, OBS provides Schering-Plough with ble on a stand-alone basis,” said Fred €950 million in the case of sales and due to performance in the process plants, and the 50 % interest in the EOXO joint venture previously owned a steadily growing base of products Hassan, chairman and chief executive an operating profit (EBIT) of some catalyst sector in the fourth quarter by Degussa. and businesses with top-line sales of officer, Schering-Plough. €73 million. Based on the preliminary of 2006, which far exceeded expecta- E www.celanese.com nearly US-$5 billion. The pharmaceu- consolidated financial statements for tions. E www.degussa.com tical business, Organon, had sales of E www.akzonobel.com 2006, which have not yet been cer- US-$3.4 billion in 2006. In addition, E www.schering-plough.com tified by the auditors, the company E www.sud-chemie.com

[email protected] CHEManager Europe 3/2007 Markets & CoM panies page Uncertainty Surrounding Gas, Oil Prices Top Concern for Energy Executives in 2007

ccording to Grant Thornton LLP environment of uncertain demand Survey Highlights and increasing geopolitical risk; and 2007 Survey of Upstream U.S. planning for the future, when faced J 65 % anticipate increases in domestic capital expenditures in 2007 (compared to Energy Companies, the top concern with highly volatile commodity prices. 89 % in 2006). A Our success will depend largely on among energy executives is the uncertainty of J More than half of those interviewed said they plan to focus on both natural gas how well we anticipate and respond natural gas and oil prices in the near future. and crude oil activities in 2007, not primarily natural gas as in 2006. to these challenges.” J As in 2006, the respondents said the Gulf of Mexico holds the greatest potential Survey respondent Matt Manning, More than 80 companies (40 % public for oil and gas discoveries, followed by the Rocky Mountains and Alaska. Controller of Lafayette-based Marlin and 60 % private) responded to the J 79 % expect a need for more capital in the next five years (compared to 89 % in Energy LLC, said, “Energy industry survey questionnaire distributed by 2006). leaders should be concerned about Grant Thornton’s Energy Practice. J Companies surveyed plan to add jobs in 2007, but executives surveyed expect con- replacing the rapidly aging work- Reed Wood, Grant Thornton’s part- tinued challenges in finding and keeping qualified industry professionals, especially force. In these times of record profits ner-in-charge of the firm’s energy geologists and engineers, even when offering top salaries. and employee compensation, jobs in practice, said, “The findings show an the energy industry should be attrac- J espondents also anticipate a rise in merger and acquisitions and restructurings in industry that is generally optimistic tive to young professionals.” the coming year. and strong, but somewhat appre- Many of the survey’s respondents hensive about projecting increases concluded that the growth of opera- in capital spending and drilling About 60 % believe there will be increased environmental legislation enacted in tions last year bodes well for local activities when the prices of natural the future to further protect the environment; consequently, almost half of those economies this year that are sup- gas and oil remain uncertain for the interviewed say their companies will spend more on environmental remediation or ported by energy and energy related most part.” studies compared to current levels. companies. “We are optimistic that According to 41 % of survey re- our market will continue to thrive, spondents, the average price of nat- and demand will remain high,” said ural gas for 2007 must be US-$8.43 Gene Miller, partner in Grant Thorn- per Mcf in order to justify an increase On the topic of crude oil, 93 % of Randall D. Stilley, CEO and Presi- ton’s Dallas office. in U.S. drilling activity of more than respondents said that the average dent of Houston-based Hercules Off- 20 %. More than half indicated that price per barrel of West Texas Inter- shore, indicated the issues for the natural gas production would be cur- mediate crude must be greater than sector this year are broad. E Contact: tailed if prices were less than US-$5 US-$60 to justify an increase in U.S. “For those of us in the oil and Grant Thornton LLP per Mcf in 2007. Yet, only 10 % expect drilling activity in 2007. Sixty percent gas service industry, we face three Chicago, U.S. natural gas prices to be high enough indicated that crude oil drilling would main challenges as we enter 2007 Tel.: +1 312 856 0200 to support an increase in drilling this be curtailed if prices dropped to – recruiting and retaining talented Fax: +1 312 602 8099 year. US-$40 or less per barrel. people; allocating resources in an www.grantthornton.com

Bayer: 2006 a Record Year The Bayer Group said it achieved a portfolio effects, group sales rose by record underlying operating result in 5.2 %. Earnings before interest, taxes, 2006. Sales rose in 2006 by 17.2 % depreciation and amortization (EBIT- to €28,956 million (2005: €24,701 DA) and before special items rose by million). The total for 2006 includes 21.3 % to the record level of €5,584 €3,082 million in revenues from the million (2005: €4,602 million), yield- Schering business in the period from ing an underlying EBITDA margin of 23 June 2006, while the divested 19.3 % in line with Bayer’s announced Diagnostics Division and the sub- target for 2006. The operating result sidiaries H.C. Starck and Wolff Wals- (EBIT) before special items climbed to rode, as discontinued operations, a record high of €3,479 million (2005: are omitted except that their net €3,047 million). earnings are included in Group net income. Adjusted for currency and E www.bayer.com

Linde Group: Improvement in 2006 In the fiscal year 2006, Linde said year (€1.705 billion). Special items successfully continued its earnings- must be taken into account in this oriented growth trend and saw a dou- development: a book profit from the ble-digit increase in sales and operat- sale of KION Group as well as one- ing profit. Sales increased by 30.8 % time expenses for acquisition and to €12.439 billion (2005: €9.511 bil- divestment processes. After adjust- lion). On a comparable basis that is ment for these special items, Linde adjusted for first-time consolidation has improved its EBITDA by 30 % to of the BOC Group sales rose by 10.6 % €2.216 billion. Without BOC, EBITDA to €10.516 billion. rose by 10 % to €1.876 billion. The operating profit amounted to €3.830 billion and is therefore more than double that of the previous E www.linde.com

Enel Buys Stake in Endesa Italian energy group Enel has ac- figure after which a public takeover quired 9.99 % of Spanish electricity offer would be necessary. The move company Endesa‘s shares, making came as E.on’s takeover proceed- German energy company E.on’s plan ings for Endesa were entering their to take over the Spanish company decisive phase. E.on formally made more difficult. Enel paid €39 per a takeover offer to Endesa share- share, totalling €4.1 billion. As soon holders of €38.75 or a total value of as Enel gets the approval of the Span- €41 billion in February. ish energy supervisory authority, the E www.eon.com Italians plan to increase their hold- E www.enel.it Growing one worry less. ing to 24.99 %, taking it to the limit E www.endesa.es The world’s oil reserves are depleting. This is why pressure is growing daily to ﬁ nd a new way to reduce our dependence on oil. Rhodia Returns to Net Profit Lurgi has achieved a milestone on this way. We have developed a technology Rhodia reported a to produce second-generation biofuels that do not interfere with the food chain. net profit of €62 mil- “We have lion for 2006, com- The technology is based on a bio-oil generated from straw that offers an pared to a net loss of energy intensity which is ten times higher than that of the biomass and is thus Visit us at the trade €616 million in 2005. demonstrated the comparable to that of petroleum. From this bio-oil we generate synthesis gas Recurring earnings fair Clean Moves before interest, tax, strength of our which is then converted into high-purity biofuels. And now the best news: these biofuels can be used at any ratio in any engine and contribute to sustainably Expo Hannover Jean-Pierre depreciation and am- Clamadieu ortisation (EBITDA) operating performance reduce the greenhouse effect because they are CO2-neutral. Hall 13, Stand E64. Rhodia CEO rose to €683 million from €513 million and are in a good in 2005. The company’s recurring EBITDA margin had risen to 14.2 % shape to continue on from 11.3 % in 2005. our route of profitable “2006 marks the successful Waste no more time and resources. delivery of Rhodia’s recovery plan,” said Chief Executive Jean-Pierre growth.” Call +49 (0) 69 58 08-40 00 for more information. Clamadieu. “We have demonstrated www.lurgi.com the strength of our operating per- the cash proceeds from the sale of its formance and are in a good shape to silicones business, down from €2.089 continue on our route of profitable billion in 2005, which resulted in a growth.” net debt recurring EBITDA ratio of Consolidated net debt fell to €1.657 2.4 times billion at the end of 2006, including E www.rhodia.com

[email protected] page Markets & CoM panies CHEManager Europe 3/2007

Beiersdorf to Increase Market Share Borealis: Restructuring Initiatives The Nivea manufac- of the owner-managed C-Bons at Borealis announces turer Beiersdorf said around €100 million. Quaas declined that it will reorgan- it plans to speed up to comment on the progress of the ise its manufacturing “We must continue to its growth abroad negotiations. Beiersdorf said it also operations in Bam- in 2007. The aim ble, Norway, within reduce complexity of board chairman the framework of and improve our Thomas Quaas is to “It’s about cooperation, lean manufacturing. thomas Quaas, increase Beiersdorf’s John taylor, The company said cost-competitiveness Beiersdorf’s global market share with a possible CEo Borealis the aim is to further board chairman in body care and cos- increase European to achieve our full metics from its cur- acquisition idea.” asset competitiveness and profitabil- rent 4.5 % to 5.5 % by 2010. He said ity of the plant. air liquide Wins 15-year Contract with shagang Air Liquide said it has won that China has top priority. At present, In addition, Borealis considers potential.” a 15-year contract to supply oxygen, nitrogen and argon to China’s lead- the Hamburg-based company is nego- phasing out its research and devel- ing private-sector steelmaker Jiangsu Shagang Group. No financial details tiating with Hong Kong’s C-Bons. “It’s sees growth potential in Russia, South opment activities in Norway, and to were provided. The group said it will invest some €90 million to set up two about cooperation, with a possible America and India. In Eastern Europe focus and speed up its innovation and effective implementation of the large air separation units, capable of producing 2,000 t of gaseous oxygen acquisition idea,” Quaas said. in 2006, turnover climbed by 18.8 % capability in Austria, Finland and company’s strategy. each per day. The company reported that the units will be ready by 2009 C-Bons holds a strong position to €427 million. Sweden, as well as at the planned “We are committed to our ‘Value and will provide 600 t of liquid nitrogen and oxygen per day. The group on the Chinese hair care market. Borouge innovation centre in Abu Creation through Innovation’ strat- also said it will supply other local industrial players, but gave no details on At present, Beiersdorf’s turnover in Dhabi, in the United Arab Emir- egy,” said John Taylor, CEO Borealis. potential clients. China is around €60 million. Market E www.beiersdorf.com ates. This supports the expansion of “At the same we develop innova- E www.airliquide.com researchers estimate the turnover E www.cbons.com Borealis’ business towards the Middle tive, value creating plastics solutions E www.sha-steel.com East and Asia. together with our customers, we must The company also intends to move continue to reduce complexity and Endura to market saltigo insect repellent Lanxess subsidiary Saltigo has its business management currently improve our cost-competitiveness to signed a contract with the Italian company Endura SpA Fine Chemicals Sulzer: Net Income Up by 73 % situated in Mechelen, Belgium, to its achieve our full potential.” under whose terms Endura will market Saltigo’s active ingredient Bayrepel Sulzer reported it continued to per- growth in sales and earnings can be head office in Vienna, Austria. The with immediate effect in Central and South America, Africa, the Middle East form well in 2006. The corporation expected for 2007. consolidation of management in one and India. To date, the world’s best known product based on Bayrepel is achieved strong growth and sub- The net income climbed to location will improve coordination E www.borealisgroup.com Autan, a registered trademark of S.C. Johnson & Son, (U.S.). In many coun- stantially higher results. Sales rose CHF221.4 million, up by 72.6 % from tries across the world, dangerous diseases such as malaria, yellow fever by 12.1 % to CHF2,801.7 million, CHF128.3 million in 2005. Earn- and the West Nile virus are transmitted by mosquitoes and other insects. while operating income (EBIT) was ings per share (EPS) equally rose by Bayrepel supports the fight against these diseases and is recommended by Oil, Gas Industry to Work with EPA increased by 77.2 % to CHF295.6 72.8 % to CHF62.27 (2005: CHF36.03). the World Health Organisation (WHO) as an active ingredient. million. The net income attributable The board of directors proposes an The oil and gas exploration and than 500,000 producing wells and E www.saltigo.com to Sulzer shareholders improved to increased dividend of CHF23 per refining industry has become the approximately 4,000 oil and natu- E www.endura.it CHF221.4 million. For the third con- share (previous year CHF14). 13th industry to join U.S. Environ- ral gas platforms operating in U.S. secutive year, the board of directors mental Protection Agency’s voluntary waters. The nation’s 144 refineries Clariant, Pantone Enter Partnership Clariant has announced a strategic proposes an increased dividend; this Sector Strategies Program that fos- process more than 17 million barrels partnership between its textile business and Pantone, a U.S. provider of year of CHF23 per share. Further E www.sulzer.com ters collaboration among business, of crude oil every day. Together, oil professional colour standards for the design industries, to advance colour government, and non-government and gas supply 65 % of U.S. energy. development for the textile industry. No financial details were given. The partnership will connect the vast number of users of the Pantone Fashion + Home colour system around the world with Clariant’s global network of Aker Kvaerner Optimises Operations technical specialists and state-of-the-art colorants technology, the Swiss Aker Kvaerner said it will optimise its  Process & Construction (P&C), speciality chemicals group said. It is thereby expected to improve the colour operations by transforming its exist- headed by EVP Jarle Tautra matching and approval cycle, potentially reducing colour development times ing six business areas into five glo- and the associated management costs by 50 % or more, it said. bal business areas. The company said The Executive Management Team E www.clariant.com that by combining those specialised will from 1 April consist of President E www.pantone.com units which work within the same & CEO Martinus Brandal and EVP & market segments better, the change CFO Bjorn Erik Naess, together with Eksigent: distribution agreement with serlabo technologies Eksigent an- results in increased capacity and a the five EVPs. nounced a new distribution agreement with France-based Serlabo Tech- stronger offer of services and solu- With effect for the first quarter of nologies. The exclusive agreement covers sales and service of Eksigent’s tions to all market segments. It will 2007, also Aker Kvaerner’s external NanoLC HPLC product line in France. Serlabo Technologies specialises in also enable more effective use of the financial reporting will be based on sales, application support and maintenance of chromatography, spectro- total resources. the new structure, presenting the organizations. Through this pro- Currently, more than 20 national scopy and other biotech instruments. With a staff of 27, the company offers In the new structure, the five glo- financial figures for the five business gram, EPA works with the diverse trade associations – representing 12 a comprehensive line of chromatography solutions. bal business areas will be: areas. Pro-forma historical numbers parties to improve the environmen- major divisions of the U.S. economy E www.eksigent.com  Field Development (FD), headed for the five business areas in the new tal impact of the major manufactur- – are working with the agency to im- E www.uvk-lab.fr by EVP Simen Lieungh structure will be published before the ing and service sectors of the U.S. prove their environmental perform-  Subsea, headed by EVP Raymond first quarter 2007 financial result is economy. ance with the least administrative diversa and Cargill Expand Collaboration agreement Diversa Corporation has Carlsen presented on 25 April. EPA’s primary contacts in the in- burden. The participating sectors rep- expanded its collaboration agreement with Cargill to discover and develop  Products & Technologies (P&T), dustry will be the American Petro- resent more than 780,000 facilities. novel enzymes for the cost-effective production of a proprietary food-related headed by EVP Mads Andersen leum Institute (API), the Domestic The 12 other participating sectors product designed to help global consumers pursuing healthy lifestyles. In  Maintenance, Modifications & Petroleum Council (DPC), and the include: agribusiness; cement manu- 2005, Cargill Health and Food Technologies and Diversa entered into an Operations (MMO), headed by EVP Independent Petroleum Association facturing; specialty-batch chemical agreement to develop an innovative, multi-step enzymatic process to assist in Torleif Gram E www.akerkvaerner.com of America (IPAA). Collectively, these manufacturing; colleges and univer- the creation of a new Cargill product. Based on the success of the initial phase organizations represent the full spec- sities; construction; forest products; of the project, the companies have expanded the scope of their collaboration trum of oil and gas operations – from iron and steel manufacturing; metal to develop additional enzymes to facilitate the next steps of production. exploration and production to refin- casting; metal finishing; paint and E www.diversa.com Don’t miss CHeManager europe 04/07 ing and distribution. coatings; ports; and shipbuilding and E www.cargill.com on 27 april The U.S. is the world’s third-larg- ship repair. est petroleum producer, with more E www.epa.gov/sectors/oilgas/index.html

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[email protected] CHEManager Europe 3/2007 PharmaFacilities · Processes · t echnologies Page 7

Pharmaceuticals Pharmaceuticals Production

Reliability and Insights from Cost-effective compliance in an intra-industry level product labeling comparison measurement Page 8 Page 9 Page 11 Managing Risk Achieving FDA Compliance Using ISO 14971

The regulators in the major These standards may also be with inherently safe design and a manufacturer might not avoid would be well advised to con- in implementing risk manage- current popular aphorism in world markets (the EU, North used for meeting requirements construction, where appropri- direct damages, one would hope form to ISO 14971. ment, particularly as part of the FDA regulated pharma- America, Canada and Japan) in other countries including the ate, take adequate protective that punitive damages might be their quality system. all strongly encourage the use U.S., Australia, the Far East and measures, including alarms if greatly reduced or eliminated if How to Apply ISO 14971 Although ISO 14971 does ceutical and biotech arenas A of risk management protocols. Canada. EN1441 applies to all necessary, in relation to risks risk management was ardently not require that a quality man- are the words, “risk management.” They may not unequivocally medical devices from tongue that cannot be eliminated, practiced. There are a few things manu- agement system be in place, express an explicit regulatory depressors to implanted insu- inform users of the residual risks Especially on the device side, facturers can do to help them- it is much easier to practice They are being used by regulated phar- requirement for risk manage- lin pumps and beyond. It covers due to any shortcomings of the inspectors are trained in risk selves conform to ISO 14971. risk management within the maceutical and biotech manufacturers ment or dictate exactly how to risk analysis procedures, which protection measures adopted. management, and ISO 14971 It is clear that manufacturers context of a quality manage- assess and manage risk, but the includes identifying hazards Although the above only relate forms an integral part of that must practice risk management system. In fact, numer- worldwide, as well as by standards outcome of an overall compre- and estimating risks, associ- to risk control, a risk analysis is training. Thus, it appears that ment and that they are driven ous informative references to developers and regulatory agencies hensive risk management proto- ated with the device. EN60601- always required for establish- practicing risk management to conform to the international a quality management system, col is encouraged by almost all 1-4 applies to Medical electri- ing conformity to the essential and conforming to ISO 14971 standard. and to how the various risk whose primary focus is on the safety regional laws and regulations cal equipment (EN60601-1) and requirements. Also, according would provide the inspector If the firm is not familiar with management documents may and efficacy of regulated products. for life science manufacturers. systems (EN60601-1-1). The to EU law, the manufacturer is with the information he or she this standard, there are several be included in the quality man- Risk analysis should be a workshops and seminars avail- agement system records, exist Although, perhaps ‘risk management’ living document throughout able, including some taught by in ISO 14971. is a new term for the drug makers as the design cycle of any product the developers of the standards and into and beyond its produc- themselves. These meetings can opposed to the medical device makers, tion. The generic steps of risk prove useful in acclimating staff E Contact: if you are, indeed, from the device side analysis are to: to a device risk management Victoria V. Lander  Identify the potential hazards approach and in applying the Waters Corporation of the regulated business, the term using cross functional teams standard to their business. In Milford, Massachusetts, U.S. stems from the ever-growing need that might include engineer- addition, the organisation might Tel.: +1 508 482 4174 ing, R&D, clinicians, market- consider hiring a risk manage- [email protected] to provide safer and more effective ing, users, regulatory, product ment consultant to help guide it www.waters.com devices to the marketplace. safety engineers, manufacturing, etc. Because of a growing regula-  Define the probability and risk tory need for a global stand- of each hazard using either a The complete logistics solution ard for risk management, the bottom-up Failure Mode and International Organisation for Effect Analysis or a top-down Standardisation (ISO) Technical Fault Tree Analysis. Committee (TC) 210 Working  Determine which hazards Group 4 was formed to create have risk levels that require a medical device risk manage- mitigation. Europe’s No.1 ment standard. Later, a joint  Mitigate the hazards. working group of the Interna-  Check to ensure no new haz- tional Electrotechnical Commis- ards are generated. plastic pallets sion (IEC) in combination with  Continue to mitigate hazards ISO was formed to ensure that until the risk level is low the new regulatory standard enough to be acceptable. standard includes hardware, also required to establish proce- needs which would ultimately met the needs of other standard software, firmware, and inter- dures to review post-production benefit the manufacturer. creators like the creators of IEC Specifically, in the U.S., the faces. EN60601-1-4 does follow information and apply protec- On the pre-market side, ISO 60601. The resulting joint IEC/ quality system regulation (QSR) some of EN1441 concepts so you tive action. The combination of 14971 is recognised by FDA and ISO working group expended states that “design validation won’t have to start from scratch these requirements, along with can be used to satisfy risk man- a great deal of effort between shall include software validation if you have done an EN1441 risk the requirement for balancing agement needs in submissions 1996 and 2000 to establish a and risk analysis, where appro- analysis. risks and benefits, suggests the to the agency. For example, in a complete risk management priate.” The FDA also points out So why are medical device need for a risk management special 510(k), the manufactur- standard focused on the medi- that the QSR’s preamble, which standards for risk manage- system. er must describe its risk analy- cal device industry. has the same force as the regu- ment necessary? They simply Lastly, in Japan, the regu- sis process and include it in the That standard is currently lation, also states the following: are the first comprehensive lators are much more direct FDA submission. If a manufac- ISO 14971:2000. It has become “Manufacturers are expected to standards for risk analysis and than in North America or the widely accepted by both regu- identify possible hazards asso- risk management to be written European Union. ISO 14971 is lators and standards develop- ciated with the design in both and globally accepted. They currently being translated into ers. ISO 14971 also received normal and fault conditions. can, of course, also be applied a Japanese Industrial Standard “Many of the a unanimous positive vote in The risks associated with the to non-medical device products and soon will be a standard for both the IEC and the ISO when hazards, including those result- such as drugs and dietary sup- satisfying the country’s essen- current FDA it was circulated as a Final ing from user error, should be plements. tial requirements for medical Draft International Standard. calculated in both normal and devices established under the guidance ISO 14971 additionally received fault conditions. If any risk is Additional International Risk new Pharmaceutical Affairs a unanimous positive vote in judged unacceptable, it should Management Directives Law – a mandatory requirement documents rely both the European Committee be reduced to acceptable levels for manufacturers who wish to for Standardisation (CEN) and by appropriate means”. Many of the current FDA guid- market there. heavily on risk the European Committee for In addition, the QSR requires ance documents also rely heav- ISO 14971 is also identified Booth No. 3130 Electrotechnical Standardisa- manufacturers to establish a ily on risk management. FDA in a number of other standards management.” tion (CENELEC). It is well recog- corrective and preventive action reviewers expect you to pro- as either a normative (“shall”) nized in the U.S., and will soon (CAPA) plan and to also analyze vide the results of risk manage- or informative (“should”) ref- become a Japanese Industrial and follow up on complaints. ment activities as part of your erence, particularly on the turer declares conformity to ISO Standard. Thus, ISO 14971 is Taken together, these man- pre-market submissions to the international scene. With all of 14971 for the risk analysis, the widely hailed by regulators as dates match up fairly well with Agency. A risk management the various laws and standards special 510(k) can be reduced to Long life, very economical Compatible with all pallet a truly global standard for risk the components of risk manage- plan is additionally aligned with around the world that deal with one or two pages since all that jacks and handling gear Optimizing logistics management. ment identified in ISO 14971. the total life cycle approach risk management, it is not sur- is needed is a short summary of processes with RFID 100% customer satisfaction currently favored by FDA sen- prising that harmonized global the results. Technology What Drives Risk Management? Why Medical Device Standards? ior staffers. standard on risk management In the EU, a firm’s conform- Conveyable with closed In Canada, Section 10 of the lead to the development of ISO ance to ISO 14971 is the evi- Top load capacity, runner bottoms highest durability There are many good reasons In the last few years, the devel- Canadian medical devices law 14971. dence that a regulatory entity Contact: Easy to clean for manufacturers to create and opment of new standards for states that manufacturers must; will look for to show that the Alexander Korell, maintain a risk management risk analysis and risk manage- identify risks, eliminate or Risk Management Beyond firm meet the risk manage- Universal use [email protected] system above and beyond the ment has mostly been for the reduce risks, protect and pro- Regulatory Requirements ment elements contained in or +49 (0) 5245/43-116 need for global firms to meet medical device arena. EN1441 vide information on remaining the directives. Although it is not international agency regula- (Medical devices – Risk analy- risks, and minimize potential A functioning risk management necessary for any manufactur- tions. The primary regulatory sis) and EN60601-1-4 (1996) failures. Canadian law also con- system may demonstrate to a er to conform to a harmonised mandate, no matter who the Medical electrical equipment tains requirements that manu- court of law that the manufac- standard, the use of a harmo- regulatory entity may be, is to Part1: General requirements facturers must correct defects turer had indeed used state-of- nized standard is evidence that ensure that safe pharmaceuti- for safety 4: Collateral Stand- found in the field for all of the the-art technology in providing an agency must recognise. cal and medical device products ard: Programmable electrical elements of a risk management safe devices. A manufacturer Finally, since ISO 14971 is are used within their jurisdic- medical systems) have been system. could mount a defense demon- going to be a Japanese Indus- tions. Agencies view risk man- harmonized under the Medical In the EU, although risk strating that appropriate care trial Standard, it means that it agement as a way to put safe Device Directive (MDD) and may analysis is not a specific re- and diligence was taken in will become a de facto require- products on the market and to apply if you are selling products quirement in any of the medical designing and testing the device, ment for the Japanese device ensure that any unsafe prod- in the EU. ISO 14971 (Applica- device directives, the essential in further assessing post-market market. Thus, manufactur- ucts that do reach the market tion of risk management to requirements state that manu- risks, and in promptly and effec- ers should conclude from the Paul Craemer GmbH • Germany • www.craemer.com are promptly identified and medical devices) is also slated to facturers must: eliminate or tively following up on “unavoid- regulatory requirements of the efficiently corrected. be harmonized under the MDD. reduce risks as far as possible able” device failures. Although major device markets that they

[email protected] Page Pharma CHEManager Europe 3/2007 You Can Judge a Book by Its Cover Reliability and Compliance in Product Labeling

tremendous potential for cost saving ing, as the same information often In pharmaceutical packaging, bar must be provided in different formats. codes (e.g. the Laetus Pharmacode) lies in the pharmaceutical industry’s For example, the most important in- play a central role. The use of these packaging production. The effort formation about the drug’s area of codes must be carefully documented A application and patient information and tracked to avoid duplication. By needed for layout generation, for example, are found on the box as well as on the creating a central information reposi- can be reduced by 50 % through system-sup- package insert. Likewise, as a rule the tory, all users work in parallel with the ingredients are printed directly onto same data sets. External team mem- ported production. In addition, the use of an all packaging, e.g. tubes and boxes. bers and vendors, such as authors, adequate system should allow companies graphic artists and media agencies Tracking Changes can be included via internet access, to easily conform to the Good Manufactur- so that data is available regardless of ing Practice (GMP) regulations for product For some time now, GMP has been the user’s location. At the same time, required for manufacturing phar- role-based permissions ensure that labeling. Modern editing and content man- maceutical and medical products. information modules are not edited agement systems help companies comply A GMP-compatible quality manage- simultaneously and unreleased data ment system ensures product quality stays protected. with legal requirements while offering a high and complies with health authority degree of reliability in product labeling. regulations. When creating informa- Conclusion tion for packaging, companies need Packaging comes in many different to exercise an equal level of care. Modern and specialised editing and forms, is expensive to produce and An appropriate system can generate content management systems allow contains important – and often man- an audit trail of the history of each data and information for packaging datory – product information. Initial information unit or document. It to be created and managed centrally information about the product’s prop- should also be able to reconstruct the in a single system. This makes the erties, area of application, and usage drug description of any given date. comprehensive representation of is found on its packaging. Coded age, delivery format, or language. delivery form, dosage, and product often has a print run of a million cop- Comparing documents and tracking processes for and changes to pack- data such as bar codes are printed Such updates, of course, affect an type, though the information itself ies, this is a decisive advantage. content changes offers the user addi- aging possible. It allows companies on boxes, tubes, and jars. The pack- enormous number of documents. The varies little, if at all. Modern editing tional possibilities for inspection and to document the necessary tracking age insert contains more detailed obligation of pharmaceutical compa- and content management systems XML: Separating Content and Layout control. Continuously documented and release steps in a legally secure information about the product. All nies to label their drugs and comply feature interfaces to layout programs processes make it possible to trace manner. All product and packaging of this information needs to be cur- with regulations regarding changes, such as Adobe Indesign, allowing the The use of an XML-based editing changes to product description and information is stored in a central rent and consistent. Legal require- tracking, or archiving make proc- graphic artist or media designer to and content management system information at any time. database. Apart from significant cost ments and security aspects of patient esses for information creation and automatically import information and can considerably simplify the manu- savings, a good editing and content information create additional require- management especially complex and text into the system and generate a facturing process for pharmaceutical Central Management of Product management system enables phar- ments for packaging. For example, if cost-intensive. layout. Errors can be avoided and packaging and thus reduce produc- Information and Master Copies maceutical companies to efficiently new side effects of an active ingre- manual text entry omitted; instead, tion time. Modern editing and con- implement GMP-requirements. dient emerge, the German Fed- Automatically Generating Layouts the graphic designer works on and tent management systems are based Creating a central data repository for eral Institute for Drugs and Medi- corrects only the final layout. on the concept of layout and content all product descriptions, information, cal Devices (BfArM) notifies the Packaging design is another consid- In addition, some editing and separation. Data, text, and images and master copies ensures a high E Contact: pharmaceutical industry. This new erable cost, especially for cosmet- content management systems, such are created and managed in these level of security and that texts, pic- Sebastian Goettel information must be included without ics and non-prescription drugs. For as Schema ST4, offer a finely tuned systems as standardized information tures, graphics or PDF files are up to Schema Electronic Documentation Solutions GmbH fail for all medicines containing the retail products, packaging frequently status control so that users can insert modules, which enables them to be date. Data from other systems, such Tel.: +49 911 586861 42 active ingredient. The relevant text creates the first impression for a con- late changes and newly released reused for new product descriptions. as those used to manage related texts Fax: +49 911 586861 70 must be updated for all drugs with sumer. Often several different layouts information right before printing. This approach is especially sensible (e.g. catalogues or additional product [email protected] the ingredient, no matter the dos- and master copies exist for each Considering that patient information for creating pharmaceutical packag- information), should also be storable. www.schema.de

Agile Systems And Technology Small and Mid-tier Pharmaceutical Manufacturing

he small and mid-tier pharmaceutical capacity would be used to continue making maintenance and access to quality lead is insisting that stand- that if there are bottle necks in the supportable. Even though the tech- to manufacture the products of XYZ parts very difficult. Furthermore ardising batch record documents business process; don’t solve it by nology you buy is capable of solving manufacturing segment includes niche, on a contract manufacturing basis operations is reacting to downtime and adding a validated document “customising” a software applica- more than one problem, focus on one specialty and generic manufacturers for five years. PhAST estimated that rather than managing downtime. management system will deliver tion to mask the pain. This band aid problem and solve it. This will deliver T B352 would increase market share  High waste: A lot of errors occur the greatest value because it will approach adds unnecessary complex- far more value in the long run. Then of prescription and over the counter products over the five year period and would due to the high pressure on pro- streamline the release process and ity and undermines stability, scal- start over at Step 1. with revenues ranging from US-$300 million to grow to absorb full pro- reduce audit risk. The ability and supportability. Take the Small to mid-tier companies like duction capacity at the technology lead wants time to understand the underlying PhAST often get trapped by divert- US-$3 billion. Typically companies in this plant. to reduce the number of problem. Identify how to solve the ing financial and human resources segment have developed discrete markets Shortly after the trans- stand alone applications problem and then make the neces- into custom application develop- action is completed, XYZ and off-system spread- sary changes. This sounds easier than ment, costly integrations or “home for their products or delivery technologies. begins to pressure PhAST sheets used to support it is and often may not require any grown” solutions and find that they However, global competition is forcing these to lower costs as XYZ is critical processes and changes to software, but changes to are deeply disappointed with the out- facing increasing price focus on an effective ERP business process. come. The PhAST CEO worked with companies to address complex supply chain pressure from global and MES solution. The Step 2: Learn to use the systems his management team and adopted management issues requiring increasingly competition. XYZ volume finance lead is focused already in place. Solving business the following key management phi- is decreasing and PhAST on pricing strategies, cost problems without adding more tech- losophies: processes define systems; complex systems. is deeply concerned that it structures and overhead nology is the ultimate objective. systems are the aggregation of proc- Success demands that these com- will not generate the cash expenses. Innovation is achieved by using the ess and technology; people use sys- panies achieve agility rather than flow it expected to fund The CEO gathers the tools you have more efficiently, not tems to make their jobs easier; and control. Agility is defined as stability, the scale up of B352. functional leads together by having more expert tools to use. consistency yields savings. scalability and supportability. Simply Some of the critical for a management meet- Invest in improving the expertise of How will this approach help PhAST put, stability means the systems are production issue PHAST ing. The stated objective the users with the tools they already address its problems? dependable; they are available every has identified are: is to determine a clear di- have. Develop expertise in support-  Long production lead time: Agility day. Scalability means that the sys-  Long production lead rection. As each functioning and configuring the technology allows PhAST to build quality into tems can respond to changing busi- time: 30 % of the batch al lead argues their per- already in place. the manufacturing process rather ness conditions and work well with documentation received spective, it becomes clear Step 3: Buy – don’t build. Going than testing for quality at the end other systems; insuring that the scale by QA is incomplete that the recurring issue is through steps 1 and 2 may result in of a process cycle. is not just vertical but horizontal as or with GMP remarks the lack of visibility man- a conclusion that a new system is  Low asset utilisation: Agility allows well. Supportability means that peo- that require investiga- agement has in the busi- required to solve a problem. Many PhAST to better plan production ple know how to use and leverage tion. The quality group ness process. The CEO small to mid-tier businesses believe and anticipate changes in produc- the system to achieve a differentiable often takes longer than is convinced that more they are saving money by implement- tion schedules to more effectively advantage. thirty days to resolve a effective planning will ing some custom developed applica- utilize capacity. deviation. Addition- result in more efficient tion that addresses a discrete prob-  Long change over times and low Case Study ally, release testing at manufacturing. The CEO lem. This is a terrible mistake. These flexibility of the lines: Agility allows the end of each process decides that PhAST needs programs may be stable or support- PhAST to connect shop floor equip- Let’s look at a fictitious small man- step is very time con- to overhaul its enterprise able but typically are not scalable. ment to production control systems ufacturer we will call PhAST (for suming. systems to gain control of The developer becomes the primary to reduce errors and lead time for Pharmaceutical Agile Systems and  Low asset utilisation: its supply chain. care giver and spends increasingly set up. Technology) PhAST Pharmaceutical OEE (Overall Equip- less effective time debugging, cus-  Resolve Maintenance problems: is an emerging generic manufacturer ment Effectiveness) is either not duction staff which often has to Enterprise Systems tomizing, supporting and sometimes Agility connects equipment main- of ethical drugs. They acquired the calculated or calculated manually. complete routine production dur- even using the application. This co- tenance to production schedules rights to a small molecule therapeu- Average values of about 32 % are ing overtime. Enterprise systems have no value dependency between the business reducing unscheduled downtime. tic compound called B352 and has obtained in the packaging area as unless they are used to create value. process and the application developer  High waste: Agility allows PhAST received positive results from Phase II compared with 65 % for well run The CEO believes that the only way This may sound a bit trite, but the makes the entire solution inflexible. to maximize resource utilization clinical trials. In anticipation of FDA manufacturers in other industries to truly address the issues at the subtlety is often lost on many small Step 4: Solve one problem at a including people and equipment. approval, PhAST determined that it and 85 % for best in class manu- plant level and the issues at the and mid-tier organizations. The sim- time. Creative problem solvers are needed to modernise its existing man- facturers. executive level is with a compre- ple truth is that systems must make – well – creative. They draw connec- Companies like PhAST must focus on ufacturing plant to insure that they  Long change over times and low hensive approach to manufactur- jobs easier by solving business prob- tions between problems and then agility to compete in a changing glo- could effectively scale up production flexibility of the lines: Most of the ing innovation. Each functional lems. Small to mid-tier companies design solutions that solve more bal marketplace. from small scale batches for clinical equipment is not integrated and lead is promoting projects that must be focused on agility. Therefore than one problem at a time. Overly trials to full scale production for com- must be started sequentially “one- they feel will provide the most value. the systems must be stable, scalable, complex solutions often suffer from E Contact: mercialization. Rather than building by-one.” Those that can store reci- The operations lead is promoting a and supportable. scope creep and usually exceed budg- Bob Raffo a new plant or outsourcing produc- pes have them stored locally. lean Six Sigma initiative to stream- PHAST adopted a four step et while only partially addressing Pro2Tec tion, they bought a solid dosage and  Resolve maintenance problems: line inefficient work streams. The en- approach to addressing its enterprise any one problem. Project teams take New Jersey, USA packaging facility from XYZ Pharma. Although the equipment is mechan- gineering lead is focused on process system project. shortcuts due to resource constraints Tel.: +1 908 998 1021 This facility would be the manufac- ically sound, some equipment is so design and automation to eliminate Step 1: Solve a problem, don’t and the result is an incomplete solu- [email protected] turing plant for B352 and the excess old that the OEM no longer exists; manual manufacturing activities. The address a symptom. This means tion that is not stable, scalable or www.pro2tec.com

[email protected] CHEManager Europe 3/2007 Pharma Page Take A Closer Look Insights from an Intra-industry Comparison

acking behind other industries ice-levels. Besides the more or crucial success factor. Based on less technical parts of the model in-depth analysis and the sur- with regard to Operational it was identified that the Man- vey’s key findings, each project Excellence the role of opera- agement System has to sup- participant is supported to L port all Operational Excellence develop and implement an in- tions for the success of pharmaceuti- activities. Only by coordinating dividual Integrated Production cal companies is becoming more and all these elements an API site System, which enables them to can reach top performance. achieve the revealed potential. more important. In 2005 the Univer- Operational Excellence will be sity of St. Gallen conducted a bench- Challenges in the API Industry a future crucial competitive advantage for western phar- marking study about the status quo The API Industry has been a maceutical companies. of Operational Excellence in galenic highly profitable market for several decades. Companies Authors: manufacturing which revealed vast and its investors became used Thomas Friedli, improvement opportunities. In order to double digit growth rates Figure 4: Saving potential in JIT Thomas Gronauer, and will for sure expect this Daniel Tykal to complete the picture of Operational Figure 3: Saving potential in QA/QC development to continue in the standing of operations in phar- with site leaders have shown, University of St. Gallen Excellence of pharmaceutical compa- future. In fact, there is tremen- petition from Asia” reaches its This fact was already observed maceuticals in several research that the implementation of sin- dous room for improvement peak in three to four years. API in prior studies and perfectly and industry projects. Current gle tools (like SixSigma, TPM) nies the manufacturing of Active Phar- in manufacturing techniques sites therefore feel the pressure reveals how crucial process and coming activities cover the has not achieved the predicted E Contact: maceutical Ingredients (API) was also which could boost the growth to face changes. understanding is for sustain- development and implementa- success or sustainable impact Thomas Gronauer rate even further. Recent obser- As illustrated below the sur- able improvements. QA/QC- tion of customized Integrated in most cases. This reveals University of St. Gallen benchmarked. vations draw a more negative vey confirmed the strong need costs are more than double as Productions Systems for phar- the high relevance of a deeper St. Gallen, Switzerland In order to implement the mod- picture of the situation. The for changes not only for re- high to total costs ratio for low maceutical plants. In the past understanding of Integrated Tel.: +41 71 224 7269 ern principles of operational ex- API industry is facing a major search driven pharmaceutical performing sites compares to experiences from other indus- Production Systems and of the Fax: +41 71 224 7311 cellence effectively a reference and tremendous change at the companies but also for generic high performing sites and are tries as well as discussions KPIs’ interdependencies as a www.techtem.ch model for benchmarking was moment. Increasing regulatory and contract manufacturers. unable to reach the outcomes used. This reference model was forces, the stronger bargain- The changes require more of high performing sites. The developed by analysing current ing power of the buyers and than just compliance with spec- study also shows that the total integrated production systems the decreasing switching costs ifications. Process understand- number of QA/QC-employees is ThermoNow Scientiﬁ sold as from the automotive industry, for substitutes are more and ing is the key to move from cor- not directly correlated with the and these were then adapted to more turning the API industry rective actions to more efficient result in quality assurance and the needs of the pharmaceuti- into a substitution market and continuous improvements. The quality control. Quality can not cal industry. The main objective as a result the rivalry among U.S. Food and Drug Administra- be inspected into a product. In c of the Total Productive Main- established firms is increasing tion has already taken the first contrast built-in quality, which tenance (TPM) System is the drastically. In this competitive step to reward process under- is a process improvement, leads efficient management of fixed landscape Frost & Sullivan has standing in the revision of their directly to lower scrap rates. assets while effectively using identified five main market re- Process Validation Policy. Consequently costs decrease new process technologies. In straints. The most important In our worldwide study, 21 and value is being added. contrast to that the main goal of restraint is “cost issues” closely API plants have been bench- the Total Quality Management followed by “difficult competi- marked using this model. The Just-in-Time (TQM) System is to significantly tive situation within Europe.” average site of the sample increase quality performance Both of them are said to have operates with 150 employees The third problem is the costs (e.g. reduce variability, scrap a high impact in the next seven and has costs of goods sold of of inventories. There is an rates, complaint rates etc.). years. “Delayed drug approvals €107.5 million. To get an im- alarming discrepancy between Based on that Just in Time and drug failures” and “reduced pression of how extend per- the three top and low perform- (JIT) production focuses on the drug pipeline” both have the formances of API sites differ, ing sites in average changeover .PSFUIBOZPVµWF reduction of working capital by highest impact in the next two the average of the three highest time. While there was a narrow simultaneously increasing serv- years whereas “Low-cost com- and lowest performing sites of performance gap among the top each category were compared. and low performing sites at the FWFSFYQFDUFE As a result three major saving rate of raw material turns in the potentials were identified. sample, the performance gap at finished good turns was sig- )Z$MPOFµT DPNQSFIFOTJWF QSPEVDU QPSUGPMJP PG TFSB NFEJB Total Productive Maintenance nificant. The study also showed QSPDFTTMJRVJETBOE#JP1SPDFTT$POUBJOFST5. #1$ TVQQPSUT that there is a lot of room for ZPV GSPN ESVH EJTDPWFSZ UISPVHI UIF DMJOJD BOE NBSLFU First of all API sites seem to improvements in volume flex- BVUIPSJ[BUJPOVOUJMSPVUJOFQSPEVDUJPO struggle in the fields of main- ibility for low performing sites. tenance and asset utilization. In contrast the service level is 0VS31%TDJFOUJTUTIFMQZPVJOEFWFMPQJOHZPVSDVTUPNJ[FEDFMM In low performing sites with excellent throughout the whole DVMUVSFNFEJVN)Z$MPOFµTTJOHMFVTF#1$TQSPWJEFUIFIJHIFTU smaller Overall Equipment Ef- sample. RVBMJUZ JO TUFSJMF IBOEMJOH BOE BMMPX GPS JOEJWJEVBM QBDLBHJOH fectiveness (OEE) an over pro- A further finding of the sur- DPO¾HVSBUJPO portional number of unplanned vey is that at several plants Key maintenance occurs. As a logical Performance Indicators (KPIs) 0VSMBUFTUEFWFMPQNFOUTJOTJOHMFVTFQSPDFTTJOH consequence, the maintenance are missing or not clearly de- 4JOHMF6TF#JPSFBDUPS´46#5.µBOE4JOHMF6TF 1BSJT cost per volume dependant fined. Only by implementing .JYFS´46.5.µIFMQZPVUPNBLFZPVS &VSPQFBO#JP1SPDFTT (v.d.) employees and the total Operational Excellence initia- Figure 1: Prioritization of Coming Topics for Improvement QSPEVDUJPODMFBOFSBOETBGFS *OUFSOBUJPOBM number of maintenance em- tives and by consequently con- 4UBOE ployees rises significantly if the trolling them through KPIs the &NBJMQFSCJPFVSPNBSLFUJOH!UIFSNP¾TIFSDPNUP °"QSJM API site struggles in unplanned API sites are prepared for the SFDFJWFZPVS$BQBCJMJUJFTBOE4FSWJDFTDBUBMPHVFGPSGSFF maintenance and in OEE. The coming challenges in their in- 'PSZPVSJORVJSJFT QMFBTFDBMM1FSCJP4DJFODFPO discussions with benchmarking dustry. But, if the culture and partners revealed that a strong the management does not sup- #JP1SPDFTT$POUBJOFST $FMM$VMUVSF.FEJB 4FSB 1SPDFTT-JRVJET OEE-focus can be due to high- port the improvement activi- 1#"% tech equipment. Besides that ties, even the best initiatives 1FSCJP4DJFODF#7#" 5FM the product mix (mono vs. mul- will fail. *OEVTUSJF[POF****OEVTUSJFMBBO 'BY tipurpose production) seems to Beside the benchmarking #&&SFNCPEFHFN QFSCJPFVSPNBSLFUJOH!UIFSNP¾TIFSDPN be directly linked to the OEE. studies for the pharmaceuti- XXXUIFSNPDPN The second saving poten- cal and API industry, it was XXXIZDMPOFDPN tial has been discovered in the possible to improve our under- field of quality assurance and quality control. API sites are facing a trade-off between low customer complaint rates and Figure 2: Saving potential in TPM low rates of rejected batches.

ReachCentrum, PWC Join Forces Exclusive Manufacturing Solutions ReachCentrum, a new organisation and related service unit established business implications of . cGMP Advanced Intermediates,Active Pharmaceutical Ingredients and as a subsidiary of the Eu- the Reach legislation. The High Potency Active Ingredients ropean Chemical Industry whole process starts with . From few kilograms up to multi tens of tons Council, Cefic and Price- a self-assessment ques- waterhouseCoopers (PwC) tionnaire and interviews . Complex multi-step reactions under cGMP have agreed to cooperate resulting in a proposed in a joint initiative called review scheme. . High Containment Suites, classified areas “Reach Readiness Re- The review itself will . Ultra low temperature chemistry view.” The companies said then be made by a multi- ReachCentrum’s exper- disciplinary team of spe- . Handling of special reagents at industrial scale tise on the Reach regula- cialists and advisors with (Dimethly Sulphate, CH3Br, H2S, SOCI2, NH3, NaBH4,...) tion complements PwC’s sector knowledge, Reach . Large volume Friedel-Crafts, Wittig,……… excellence in business risk expertise and performance management, perfecting improvement excellence. compliance with laws and Judith Hackitt, Market- visit us at regulations. Both companies The tool is to help prepare ing Director of ReachCentrum CPhl Japan, Tokyo, 18-20 April 2007, Booth #J-01 keep their independence and companies for Reach in func- commented: “Businesses sim- will continue to offer their own tion of their status and by defin- ply cannot afford to wait. They specific services. However, on a ing actions for the current and must already start preparing For further information: e-mail: [email protected] case by case basis either Reach- upcoming Reach implementa- for Reach now, wherever they manufacturing.helsinn.com Chemistry with Pharma Touch ph. + 41 (0)91 8730110 - fax + 41 (0)91 8730111 Centrum or PwC may propose tion phases. This involves a sit in the supply chain.” to combine services through the complete review of the compa- E www.reachcentrum.org Reach Readiness Review. ny’s product portfolio, internal E www.pwc.com

[email protected] Page 10 Pharma CHEManager Europe 3/2007

Lonza, Bristol-Myers Squibb Extend Agreement Interphex: Technology Solutions and Networking Lonza has extended its existing tol-Myers Squibb for the treat- launched in the U.S. in February Thousands of pharmaceutical supply agreement with Bris- ment of rheumatoid arthritis. 2006, is the first in a new class industry professionals gather Show hours Conference hours tol-Myers Squibb Company to The extension will provide Bris- of biologic drugs. It is a selective annually at the Interphex to produce in its Portsmouth, New tol-Myers Squibb with additional modulator of a co-stimulatory meet one-on-one with techni- Tuesday, 24 April: Tuesday, 24 April: Hampshire (U.S.) facility until the production capacity in support of signal required for full T-cell cal experts, see the newest 10:00am – 5:00pm 9:00am – 4:00pm end of 2013 the active pharma- future sales of the Orencia. activation, for the treatment of products and equipment, view Wednesday, 25 April: Wednesday, 25 April: ceutical ingredient for Orencia Orencia, approved by the rheumatoid arthritis. live demonstrations, network, 10:00am – 5:00pm 9:00am – 4:00pm (abatacept), a biologic agent dis- U.S. Food and Drug Adminis- E www.lonza.com get expert advice to specific covered and developed by Bris- tration in December 2005 and E www.bms.com challenges, find resources and Thursday, 26 April: Thursday, 26 April: source new products, learn 10:00am – 3:00pm 9:00am – 3:00pm about emerging or changing Avantium Doubles R&D Capacity trends, and to stay on top of development through delivery key focus areas will feature every issue surrounding phar- to market. The show is com- new solutions and sources for: Avantium Technologies has maceutical manufacturing. This prised of four major segments: automation; packaging; RFID; announced the expansion of its year’s event takes place 24 – 26 facilities; outsourcing and contamination control; and R&D facilities in Amsterdam April in New York City. contract services; information biotech. to accommodate the strong This year’s event will feature cation for every aspect of drug technology; and manufactur- growth of its high-throughput technology solutions and edu- manufacturing from process ing/processing. In addition, E www.interphex.com R&D business. The expansion involves that Avantium will double its capacity with the addition of 2,500 m2 of labora- Amgen, J&J Drugs to Carry Warning tory and office space. Avantium The U.S. Food and Drug Admin- failure, and in cancer patients of mortality, serious cardiovas- committed to providing timely anticipates it will start using the istration (FDA) has requested a with anemia caused by chemo- cular events, thromboembolic and appropriate communica- new facilities by the first quar- black box warning for the class therapy. However, a series of events, and tumor progression tions to physicians and patients ter of 2008. of drugs known as erythro- recent studies have cast doubt when used in off-label dose reg- whenever we become aware of Tom van Aken, Chief Execu- poiesis-stimulating agents, in- on the safety of these medicines, imens or populations,” accord- new safety information that tive Officer of Avantium said: cluding Amgen’s blockbusters prompting the FDA to demand ing to the FDA. Physicians are could affect clinical practice,” “Avantium has made excellent Aranesp and Epogen. Johnson the strongest type of warning advised in the boxed warning said Roger Perlmutter, execu- progress over the past years, business in the coming years. base. In addition Amsterdam & Johnson will also have to for a prescription drug, a black to use the lowest dose of ESAs tive vice president of R&D at with our revenues increasing by Our site in Amsterdam is an is a good area to attract highly update the safety information box warning. that will avoid the need for red Amgen. over 40 % per year. The expan- attractive location because of educated scientists and creative on its erythropoiesis-stimulating Updated information for blood cell transfusions, and not The FDA is planning to re- sion will provide us with suffi- its close proximity to Schiphol people, which we need to fur- agent (ESA) drug Procrit. ESAs patients in the revised label to exceed 12 g/dL. view the safety and efficacy of cient capacity to accommodate Airport, which makes it easy to ther strengthen our team.” are approved to treat anemia notes that “patients should be “Patient safety is unquestion- ESAs at an upcoming meeting. the anticipated growth of our reach for our global customer E www.avantium.com in patients with chronic kidney informed of the increased risks ably our top priority. Amgen is E www.fda.gov

Evotec, Boehringer Ingelheim Enter Collaboration FDA Delays New Approval of Astellas Drug

Evotec has announced a multi- etary and well validated dis- The contract also includes The U.S. Food and Drug Admin- liver and heart transplant re- plantation, said that the one ences in survival rates among year collaboration with Boehring- ease models to identify novel an option for Evotec to support istration (FDA) has raised con- cipients in the U.S. The FDA year survival rate for kidney patients receiving the combina- er Ingelheim to jointly identify AD targets. Based on these Boehringer Ingelheim (BI) in cerns over the combination of sent Japanese company Astel- transplant patients on Prograf/ tion of CellCept with Prograf or novel targets as potential points models, Boehringer Ingelheim the target validation process. If Astellas Pharma’s Prograf and las an approvable letter over CellCept was 95.7 %, 97.6 % in anti-rejection drug cyclosporine of intervention in the treatment will select and further validate BI exercises this option, Evotec Roche’s CellCept as an adjunct concerns that the combination the cyclosporine modified and with Prograf. Astellas said that of Alzheimer’s disease (AD). The target candidates for its in-house is eligible for milestone pay- therapy to prevent organ rejec- of the two drugs may lead to an CellCept arm, and 98.6 % in the it would work with the FDA to collaboration will also involve the drug discovery programme with ments of up to €20 million plus tion in kidney, liver and heart increase in deaths from infec- extended release Prograf/Cell- resolve the differences in inter- Research Institute of Molecular the goal of developing innovative royalties. transplant recipients in the tion, based on the review of a Cept arm. pretation of the data and pur- Pathology in Vienna (IMP). Evo- novel therapeutics. Financial de- U.S. clinical study. However, Astellas said that sue approval of its supplemen- tec scientists together with the tails of this collaboration are not E www.evotec.com Prograf is currently approved The study, published in the peer-reviewed literature has tal new drug application. IMP will apply their propri- disclosed. E www.boehringer-ingelheim.com for the prevention of kidney, American Journal of Trans- not shown any significant differ- E www.astellas.com

Ranbaxy: Green Light on Zolpidem Tartrate Ranbaxy Laboratories Limited be bioequivalent and to have Total annual market sales for (RLL), said it has received ten- the same therapeutic effect as zolpidem tartrate tablets were Gear up tative approval from the U.S. that of the reference listed drug US-$2.12 billion. Zolpidem Food and Drug Administration Ambien tablets 5mg and 10mg tartrate tablets are indicated to manufacture and market of Sanofi Aventis. The products for the short-term treatment for ChemSpec Europe zolpidem tartrate tablets, 5mg will be manufactured at the of insomnia and related disor- and 10mg. The Office of Generic company’s Ohm Laboratories ders. Drugs, FDA, has determined Inc. facility, based in North with the Ranbaxy formulations to Brunswick, New Jersey (U.S.). E www.ranbaxy.com

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CHEManager Europe 3/2007 ProductionFacilities · Processes · t echnologies Page 11

Production Production Industrial Locations

What will the Power plant business ECSPP wants to bring digital petrochemical and technology more chemical investment mean to you? today to Europe Page 13 Page 12 Page 15 Innovative Measurement Technology Cost-effective Level Measurement

ithin a very short period ed radar level measurement These include its cost, the ab- with Levelflex M guarantees sence of a self-cleaning effect Background to methods of time, Endress+Hauser safe measurement in bulk sol- as in the case of ultrasound, Micropilot has upgraded its com- ids even where there is heavy and restrictions regarding its J Application: Free space radar level measurement is the safe solution W buildup of dust. It even provides installation when compared to plete range of level measuring devices for liquids in extreme process conditions (pressure, temperature) and shaw contract for huntsman Plant reliable measurements in the guided radar. These are impor- to state-of-the-art standards and event of turbulence and foam. tant arguments at a time when for outgassing (also aggressive) media. Advancements made with The Shaw Group announced that its Shaw Constructors, Inc. This is thanks to the use of two everything revolves around the regard to this measuring principle mean that it can also be used in adapted it to the needs of the market. business unit has been awarded a construction management redundant methods of measure- catchwords process optimisa- bulk solids, regardless of dust and filling noise. and services contract by Huntsman Corporation to construct a The manufacturer has made improvement (end-of-probe detection) tion, life cycle costs, total cost J Functional principle: The Micropilot uses high-frequency radar pulses new 100 million pound/year maleic anhydride plant at Geismar, in the one device for liquids. of ownership and return on which are emitted by an antenna and reflected by the surface of the ments to almost all of the 13 different Louisiana. Shaw’s services include overall construction man- The sensor is precalibrated and investment. What is important medium. The travel time (t0) of the reflected radar pulse is directly agement, site work preparation, structural steel supply and measurement methods: guided radar; is therefore particularly easy to to today’s users is that they only proportional to the distance covered (d) and the velocity of light (c) erection, and the installation of mechanical equipment, piping commission. Automatic probe buy what they really need. free space radar; ultrasonic; micro- according to the equation d = c- (to/2). The measurement frequencies systems, electrical components and instrumentation. The new monitoring ensures a high de- of the frequency spectra used by the radar devices are approx. 6 and plant will be constructed within an existing operating area of wave barrier; radiometric; vibronic; gree of availability. Ultrasonic 26 GHz. Huntsman’s Geismar location and is expected to come on line paddle switch; electromechanical/level Benefits: Non-contact, non-wearing measurement, even in extreme in the fourth quarter of 2008. The value of Shaw’s contract was Free Space Radar “With over 35 years of expe- J not disclosed. system; capacitive; conductive; hydro- rience in ultrasonic measure- process conditions, measurement not affected by outgassing or dusty E www.shawgrp.com “The performance of radar ment technology, the new gen- media, safe measurement even if different products are used. static; differential pressure; and float technology increases from year eration of Prosonic S devices switch. to year. In Autumn 2006, we highlights Endress+Hauser’s Levelflex M arkema increases capacity were again able to increase capacity for innovation,” said J Application: Level measurement using guided radar pulses is suit- For continuous level meas- significantly the dynamics of Hans-Peter Maier, product able for bulk solids (rope probes) and also for liquids (rod and coaxial Arkema said it will be launching major expansion plan at its urement in liquids and solids, our Micropilot free space radar manager for level measurement probes). The reflected waves are guided safely which means that the Jarrie facility (France) in 2007. Overall investments of some customers can measuring devices using newly at Endress+Hauser. “Consisting surface of the medium is of secondary importance. The different angles €7 million will help enhance the plants’ reliability and increase now avail of the developed high-frequency mod- of repose or outlet funnels, which occur in the case of bulk solids, do commercial grade hydrogen peroxide production capacity by enhanced Time- ules”, said Carsten Schulz, prod- not affect measurement. Measurements taken in the event of turbulent 10 % to 115,000 mt/y, therefore consolidating the site’s long- of-Flight power uct manager for level measure- liquid surfaces or where there is foam are guaranteed to be reliable. term competitive position. The project is part of a global plan trio – made up ment at Endress+Hauser. to consolidate the Jarrie facility’s hydrogen peroxide activity by of the Micro- But what does this mean in J Functional principle: The Levelflex M uses high-frequency radar improving its competitiveness and reliability, while also reducing pilot, Levelflex practice? In bulk solids, levels pulses which are guided along a probe. When the pulses reach the its energy consumption and global impact on the environment. and Prosonic up to 70 m can be measured surface of the medium, the characteristic impedance changes, and a Arkema’s global hydrogen peroxide production capacity will – to meet the safely. In the case of liquids, portion of the pulse is reflected. The length of time between pulse reach 400,000 mt/y by mid-2008. demands of the the range of application has transmission and reception of the reflected pulse is measured and E www.arkema.com most difficult ap- widened considerably, i.e. high evaluated by the device and is used to calculate the distance between plications even reliability even in the event of the sensor and the medium surface. more efficiently. low dk values and turbulent or J Benefits: Safe measurement in bulk solids even where there is heavy Time-of-Flight lightly foaming surfaces. Since lanxess invests in new chinese site buildup of dust, reliable measurement in liquids even in the event of measuring de- January, Endress+Hauser also turbulence or foam, easy commissioning thanks to a precalibrated The Lanxess chemicals group said it is building a new plant for vices (guided has the only 26 GHz pulse radar sensor, high availability due to automatic probe monitoring. the manufacture of lubricant additives in Qingdao, China. The radar, free space device with a precision level of production facility, which belongs to Lanxess’s subsidiary Rhein radar and ul- +/– 1 mm for custody transfer. Chemie, will go on stream at the latest in the fourth quarter of trasonic) can be Prosonic 2008 and will initially employ 50 people. It is estimated that used in applica- Top Performer of the Future? J Application: Ultrasound is a proven and cost-effective solution for the amount in euros to be invested will be a single-digit million tions with tem- level measurement in liquids and bulk solids. The devices in this series value. At the new facility Rhein Chemie will focus on the manu- peratures rang- In recent years, the technical are available as compact devices or as separately instrumented ver- facture of customised additive formulations for lubricants. ing from – 200 °C advances made in the area of sions. Easy planning and installation, quick and safe commissioning, a With an annual volume of around 4.4 million mt, the market to +400 °C and radar devices have been stag- long operating life and reduced maintenance effort are the distinguish- for lubricants in China is about four times as big as in Germany. pressures rang- gering. Furthermore, there has ing features of this measuring principle. Typical areas of application are Annual growth is estimated to be 8 %. The industrial lubricants ing from –1 bar to fortunately been a very posi- Micropilot abrasive and aggressive media, even in tough ambient conditions. segment, which is of particular interest to Rhein Chemie, is likely 400 bar. For even tive downward price tendency. J Functional principle: The Prosonic family uses ultrasonic pulses to double by 2012 with an even higher growth rate at the current more extreme These non-contact measure- of a transmitter and sensor, this which are reflected by the medium surface through the change in time of one million t/y. conditions, ra- ment methods seem to offer at- separately instrumented device density between air and the medium. The length of time between E www.lanxess.com diometric meas- tractive advantages and, with- offers key advantages, particu- E www.lanxess-goes-asia.com urement technol- out doubt, the technology is larly in tough, impracticable pulse transmission and reception of the reflected pulse is measured ogy can be used. already being put to use today and hazardous environments. and evaluated by the device and is used to calculate the distance Therefore, there in some applications for which These advantages become between the sensor membrane and the surface of the medium. are virtually no there were virtually no solutions apparent even during installa- Product properties, such as dielectric constant, density or sinopec, syntroleum announce Jt Plan Levelflex M J Benefits: application lim- available previously. However, tion and commissioning.” moisture, have no effect, quick and easy commissioning using prede- China Petroleum & Chemical Corporation (Sinopec) and Syntro- its as far as pres- is free space radar the top per- The user can choose be- fined application parameters, calibration without filling or emptying. leum have announced their intention to cooperate. The two par- sure and temperature are con- former of the future? No. tween a DIN rail housing for ties have signed a non-binding memorandum of understanding cerned. According to the experts at space-saving installation in a (MOU). This establishes a joint technology development effort to Endress+Hauser, this method control cabinet or a robust, advance natural gas-to-liquids (GTL) and coal-to-liquids (CTL) Guided Radar of measurement will replace weatherproof field housing for and safe commissioning and ning process, you can choose technologies, cooperation in verifying Syntroleum GTL technolo- one method or another in the mounting on a wall outdoors. can be optimally adapted to the suitable products and solutions gies on an industrial scale, construction of a 700,000 t/y (17,000 “Guided radar level meas- long run. However, there are The Prosonic S/M/T ultrasonic requirements of the measure- by entering specific application barrel per day) GTL plant and a 3,000 t/y (100 barrel per day) urement with Levelflex M is several reasons why free space product family is characterised ment task in question. Typical parameters. Different tools are CTL pilot plant in China using Syntroleum’s technologies, and characterised by its extremely areas of application are abra- available to support you in your jointly marketing SSTC technology (Sinopec Syntroleum technol- reliable measurements,” said sive and aggressive media, even choice of product, and each tool ogy) in China through the most effective means. The MOU calls Norbert Thomann, product in tough ambient conditions. In can be used independently. With on Syntroleum to provide Sinopec with access to its complete manager for level measure- addition, product properties, detailed drawings, diagrams, set of proprietary GTL technologies including catalyst technol- ment at Endress+Hauser. “This such as dielectric constant, den- comparisons of measuring ogy and Fischer-Tropsch technologies related to CTL for use in is explained by the fact that in sity or moisture, have no impact principles and products, the China on an exclusive basis during the period of cooperation. the case of demanding applica- on the measurement. Applicator provides you with a After signing a formal cooperation agreement, Sinopec agrees to tions, two redundant measure- helpful overview of the chosen provide Syntroleum with US-$20 million per year over the next ment methods run in parallel Custom-made Solutions products or solutions. five years to support development of the technology. within the one device.” E english.sinopec.com The product range is partic- Usually, there are two or three Author: E www.syntroleum.com ularly suitable for installation different measurement methods Stefan Menschel, in a bypass. These measuring which are clearly suited to each Endress+Hauser points, which can be supplied as application. Endress+Hauser ineos nitriles to expand acrylonitrile capacity complete solutions, play a key helps its customers to make the role particularly in the chemi- right choice and provides sim- Ineos Nitriles announced plans for a major capacity expansion at cal and petrochemical indus- ple aids to help with planning its acrylonitrile complex in Green Lake, Texas (U.S.). This project tries and in power plants. The and decisions. Custom-made includes the installation of a fourth reactor train and additional new liquid devices measure up solutions are provided either E Contact: investment in associated equipment at Green Lake. According to to 400 °C and 400 bar. Guided by the expert field sales force Daniela Storrer the company, upon completion and start up in the third quarter radar enjoys a high level of ac- or the Applicator. The Applica- Endress+Hauser Messtechnik GmbH+Co. KG Prosonic S of 2008, Green Lake will become the largest acrylonitrile pro- ceptance and is also advocated tor is a package of easy-to-use Weil am Rhein, Germany duction facility in the world with 544 kt of total capacity or 1.2 by experts in large companies. software tools for defining, se- Tel.: +49 7621 975 399 billion pounds. In fact, the number of units in radar will not become the sin- by its design, functionality and lecting and designing the right Fax: +49 7621 975 20399 E www.ineos.com production has increased stead- gle, universal level measure- price. The devices allow for easy product for the measurement [email protected] ily in the last five years. Guid- ment technology of the future: planning and installation, quick task in question. In the plan- www.endress.com

[email protected] Page 12 Production CHEManager Europe 3/2007 Going With The Times Change of Engineering Tools from Process Industry’s Perspective

he entire European process  IT- platforms were expensive separately grown-up different  Minimisation of cost for important point to achieve this mainframe machines or indi- systems (fig. 2) development, operation and is a common understanding industry has been subject vidual workstations with high Parallel, synchronised work maintenance. Cost benefit of the inter-disciplinary work to radical change in the last cost for development, opera- with engineering tools and ratios and efficiencies are processes, which must be sup- T tion and maintenance. Own- ERP systems is a great chal- permanently scrutinized. ported on work- and on man- years. This change was driven by er/operator companies did lenge for each engineering unit  As far as reasonable direct agement level. The productive emerging new markets and aggressive not scrutinize cost – benefit in planning and maintenance. system accesses for all genu- use (i.e. not only for pilot or ratios or efficiencies, either In the process industry owner/ ine end-users, systems not other special projects) of inter- global competitors, by the necessity to  No direct system accesses operator companies all the IT- only operated by specialists. disciplinary interfaces in day- buy external services in large scale, by for genuine end-users, sys- networks, IT- standards and  New In-/Output for end- to-day business is another great tems were only operated by especially the ERP systems are users: Data files, in addi- challenge for each engineering global constraints to technical stand- specialists. tailor-made for the necessities tion to paper. Large-scale unit. ardisation as far as possible and by of producing companies. Inter- usage of Internet/Intranet. During the last 30 – 40 years, Real output for end-users were faces to main ERP systems are > Many end-users are directly engineering tools in process penetration of IT-tools into almost all vast amounts of paper print- totally dominated by the needs influenced in their daily work industry have thus lived through industry areas. Engineering tools used outs, which were rather identi- of the producing companies, processes and sequences, very fundamental change with many cal to the time before. There- putting the wishes and require- often severe change manage- aspects: in process industry have also been fore no adaptation or change ments of engineering tool users ment problems occur.  Change from slide rules and heavily influenced by this change, management problems existed on the back burner. Therefore  In low-cost countries the ac- drawing boards to high-per- with the end-users. But in the a minimum basic knowledge on tual situation of engineering formance simulation tools because once they were developed best case these very individual work procedures/sequences of tools is typically comparable and IT-based 3D-models. and introduced under totally differ- engineering tools only managed ERP-systems is required from to that in the first years in  Change from tools for special- to optimise a single engineering the engineering tools’ end- Europe. But in countries with ists only to tools for all peo- ent circumstances. discipline in one specific com- users. In daily work very often high labour cost pressure to ple involved in planning and pany (fig. 1). many problems are created by continuous improvements maintenance. In the 1970s and ‘80s, compu- These typical characteris- this requirement (e.g. by only of efficiency (conservation  Change from specific tools ter based CAD-drawing systems tics of the first IT-supported sporadic users, frequent chang- of competitiveness) does not for individual companies in came up as the first engineer- engineering tools reflected the es in ERP systems). decrease. Europe to standard tools for ing tools in process industry. overall business environment of At the turn of the millenni-  Minor or medium efficiency worldwide usage. These systems quickly enjoyed producing companies in those um great structural upheavals enhancements are still pos-  Change from island-struc- great popularity due to simple years: occurred in the overall business sible by continuous improve- tured tools within companies reuse of drawing copies and  European/German companies environment of process indus- ments of engineering tools to tools with inter-discipli- to easy drawing modification mainly focused on markets try. Now the market has focused and of the work processes nary work processes and functionalities that saved time in Europe. Therefore their on the whole world, capital within single engineering constraints. and money. At the same time, engineering tools were almost investments in Europe/Germa- disciplines.  Change from “showpiece the first engineering tools with exclusively used for planning ny were deeply declining. All  Potential for major efficiency luxury” tools to day-to-day databases (DB) emerged in and maintenance of process important economic framework enhancements is in standard- tools with permanent cost process simulation, in electri- plants in Europe. conditions of process industry ised data transfer between pressure and constraint to cal and instrumentation (E&I)  There was no noticeable have changed: different engineering disci- efficient work. and piping engineering. These competition by low-cost sup-  Global utilisation of engineer- plines. systems allowed the execution pliers. ing tools combined with high In this field of tension, today’s of complex simulation calcu-  Very limited commercial offers functionality was required. The IT-market now offers the engineering tools must keep on lations and/or the processing on the IT- market created real >Demand for interna- first standardised interfaces proving their worth; respective- of mass data in piping isometric constraints for process compa- tional system suppli- between different engineering ly they have to be continuously programs including parts nies to work with own staff. ers with global support. disciplines including revision improved. The ruling funda- list, in programs for instrumen-  Most companies were totally > Implementation of uniform, management, automatic docu- mental framework conditions tation wiring diagrams, etc. Cer- convinced of the absolute mostly company independ- mentation, etc. These standard offer no alternative. tainly many company decisions correctness of their compa- ent Engineering standards. interfaces are more or less to introduce such systems were ny’s engineering discipline > User constraints to agree matured and certainly require also heavily driven by an “overall specific philosophies, proce- on corporation wide, global more improvements (fig. 3). IT-enthusiasm” in these days. dures, standards, etc. master data. But usage of interfaces E Contact: Typical characteristics of  Strong competition in the mar- between different engineer- Dr. Ronald-Alexander Klein such systems in these first years In this environment, no incen- ket by low-cost suppliers. ing disciplines is primarily an BASF were: tives existed for fairly uniform  Big commercial suppliers organisational task. The objec- Ludwigshafen, Germany  Great bandwidth of engineer- or even standardised engineer- agitate in the IT-market, con- tive is an overall optimum for Tel.: +49 621 60-71205 ing content in used systems: ing tools. But in the end, real- straints to fix-cost reduction the engineering unit in plan- [email protected] Plant specific, project specif- ity showed a striking similarity by minimization of work with ning and/or maintenance. Most www.basf.com ic, company specific, depart- concerning the as-built plants vidual master data systems to networks were built up with internal staff. ment specific, engineering of many different, independent individual engineering tools acceptable bandwidths. More  Cost pressure (by globalisa- discipline specific, personal companies. were created, e.g. from a sin- and more end-users worked tion and shareholder-value) BASF Begins Two New Plants specific… At the end of the 1980s and gle database for piping master directly with engineering tools. forces to general standardi-  Implementation of specific beginning of the 1990s, demand data (pipe classes, valve data, In owner/operator compa- sation in hardware and soft- BASF broke ground for two capacity of 30,000 mt/y, while work standards of individual appeared in process, piping and etc.) to a single piping 3D- engi- nies, modern enterprise re- ware. These changed frame- new plants in Pudong, near the plant for specialty chemi- companies: Almost no pure E&I engineering for project/ neering tools. These interfaces source planning (ERP) systems work conditions have direct, Shanghai in China, which will cals for leather tanning will national technical standards plant independent, reusable only worked within specific for procurement of techni- radical consequences for the manufacture polyacrylate pol- have a minimum annual capac- were implemented without master data (physical proper- engineering disciplines. In this cal goods created demand for engineering tools and the way ymers and specialty chemicals ity of 12,000 mt of products in noticeable modifications or ties, pipe classes, seal data, time the first noticeable resist- efficient mass data transfers to work with them: for leather tanning. The plants liquid or powder form. A spray enhancements; no interna- equipment data, etc.) inside ances of end-users came up from far-developed engineer-  IT-platforms are market- will provide customers in the dryer with a capacity of 10,000 tional aspects were taken into the engineering tools. Out of the triggered by integrated master ing tools to those ERP systems. standard PC (typically with growing Chinese market with mt/y is part of the investment. account. past, an abundance of master data, because IT now forced the Besides the pure IT- aspects of additional main memory, a reliable supply of high-qual- The new plants will be located  Market offered only few com- data already existed on paper, end-users to use those master those point-to-point interfaces, high-performance graphi- ity chemicals. The two facilities next to BASF’s existing facilities mercial systems; typically but integration and mainte- data and to follow certain regu- the necessary synchronisation cal cards) based on market- are expected to be completed for polyacrylate polymers and systems of all kinds were in nance of these master data in lations/procedures. of master data in engineer- standard operation systems. in the first quarter of 2008. In- leather chemicals in Pudong. use self- developed or devel- engineering tools turned out to During the 1990s, the proc- ing tools and in ERP systems  Seamless integration in the vestment details were not dis- oped per order. In fact, only be very expensive. ess industry was penetrated had top priority. In most cas- predefined IT-environment of closed. island-structured systems Typically, proprietary point- with workstations and later on es, a data overlap with many producing works / companies The polyacrylate polymers without interfaces existed. to-point interfaces from indi- with PCs. Company-wide IT- inconsistencies existed in those is required. plant will have a minimum E www.basf.com

Alternative Solutions in the European Alkoxylates Market Needed Scrutiny of alkylphenol ethoxy- 2003/53/EC and the est in other alkoxy- manufacturers and end-user in- It’s shopping season: lates (APEs), which are highly Detergent Directive late-based solutions. dustries are unwilling to accept efficient but hazardous, has 648/2004, which fo- However, excluding a the price rise. Given this situ- Used machines at forced participants to explore cus on the marketing few, most of the prod- ation, well integrated partici- new alternatives to existing and biodegradability ucts are in the devel- pants are better positioned to RESALE! solutions within the European respectively, of prod- opment stage. compete in the market, even as alkoxylates market. Although uct varieties. While At present, in- other manufacturers are striv- alcohol ethoxylates (AEs) exist APE-free solutions creasing raw mate- ing to sustain their business as a possible substitute, the are available from rial and energy costs, profitably. need for improved and safer most participants, fierce competition, Strong customer relation- alternatives remains. there are certain the existing situation ships in this low product differ- Frost & Sullivan finds that areas where their of oversupply and entiation market, coupled with the European Alkoxylates Mar- effectiveness falters. the enforcement of vertical integration can help ket earned revenues of €1,105.1 Consequently, the regulations are the minimise the negative impact million in 2006 and estimates demand for alco- key factors affecting of various external factors. this to reach €1,443.5 million hol ethoxylates and the business sustain- Customer-oriented product and in 2013. The biodegradability other alkoxylates is ability of alkoxylate service offerings can also be of alkoxylates is the key factor witnessing a signifi- manufacturers. Rising considered as a long-term strat- driving growth in the European cant increase, while crude oil prices are egy for active manufacturers to alkoxylates market, notes Frost simultaneously new resulting in increased sustain business while consoli- & Sullivan Research Analyst alternatives continue costs of ethoxylation, dating their market position. Mahesh Kumar. The adoption of to be explored. thereby leading to un- Innovative and strong cus- directives that mandate a speci- Moreover, with due pressure on prod- tomer-based services, as well fied level of biodegradability of awareness of ingre- uct price margins. as continuous product devel- 13th International Trade products is encouraging the dient formulations Large alkoxylate opment can help to overcome Fair for Used Machinery shift from existing solutions to increasing among production capacities market aberrations. This and Equipment the exploration of safer prod- environment-con- with limited ethoxyla- requires long-term vision and ucts. scious consumers, tion capacity are im- an investment strategy to build Karlsruhe · Germany Alkoxylates based on APEs, the demand for pacting product pric- on infrastructure which will 18 to 20 April 2007 which are considered to be biodegradable so- APEs are important to a number of industrial processes, including es, explained Kumar. help to consolidate market Registration and information: the most effective products, lutions is growing. pulp and paper, textiles, coatings, agricultural pesticides, lube oils The increase in crude position. Tel. +49(0)7244/70 75-0 · www.resale-germany.com have come under heavy scru- Major participants and fuels, metals and plastics. Industrial applications comprise oil prices has further www.resale-germany.com tiny with directives such as the have evinced inter- 55 % of the total APE market. burdened alkoxylate E www.frost.com

[email protected] CHEManager Europe 3/2007 Production Page13 The Digital Petrochemical Plant What Will it Mean to You?

he advent of the digital petrochemical these installations have evolved into vides a uniform governance of diverse  management of access and privacy; separate architectures for operations standards and connections within the  change management – guiding plant has been driven by the recent and maintenance. As a result, they do intentionally separate process control teams to trust the information, change in focus from plant optimisa- not help to manage the tensions. and office information domains. The trust themselves and trust others; T A better approach is to evolve ECS technology exploits the latest Mi-  and information ethics and law tion to business optimisation. It is a strategy the software architecture to coordi- crosoft .NET and Office technology, – adapting the strategy to organi- that focuses on managing the performance nate the information requirements which means that desktop applica- sations and host governments who of both operations and maintenance tions can be integrated in a way that have policies that may restrict the of a group of sites or plants. Currently, – for assets both large and small. In is secure, private and robust. access to information. petrochemical plants are responding to the this three-level approach, the Plant Business Control provides focus The Implications For You But the advantages of the digital pet- business optimisation trend by considering at the business level, while Plant rochemical plant far outweigh the key challenges and managing a set of key Operational Control provides focus Digital petrochemical plant introduc- challenges. One major U.S. ethylene around equipment or sets or groups, es increased performance, but also producer incurred 96 nuisance trips initiatives. Many have discovered that their and Asset Management is the focus requires increased governance. Its during a period of four years, mainly managers and workers spend 60 – 80 % of at the field devices/equipment level. benefits include: due to coordination challenges in In this arrangement, each level has  increased productivity by engaging responding to the increased speed their time looking backwards at historical a better organisation of information specialists only at the right time, of business. The company changed information. that describes requirements and approach than the common combi- time accounting function in the left wherever they are, and by engag- its response approach and over the capability, and provides actionable nation of office information systems side of the diagram. ing others with actionable informa- following four years saved US-$229 They have also discovered that real information. and plant control and information Existing plant information sys- tion, using the next step in visual million in improved protection from time information is overwhelming Since 1991, Invensys has devel- systems. tems (MES for manufacturing execu- management; process hazards and nuisance trip in quantity, but not actionable. As a oped, patented and implemented a Invensys has defined and intro- tion systems) are incorporated and  the flexibility of using other teams avoidance – with only one nuisance result, much time is spent reacting real time financial performance cal- duced the world’s first Enterprise augmented by the ECS MES, which within the company and external trip during a period of four years to problems instead of anticipating culation based on the results of in- Control System (ECS) with a set of drives the adaptive and proactive contractors; – a 96-fold improvement. There is them. This situation is a barrier to terviews with over 1,400 executives software products called InFusion. It access to information, and supports  a consistent improvement from re- no doubt that the benefits justify the both increased business speed and and managers. This has evolved into integrates and transforms information decisions by supervisors and special- acting with varying success to being challenges of change. productivity. a means of calculating an effective and its behaviour among the common ists. Business systems, where SAP is proactive and spending more time measure of performance that ad- control and information systems. most popular, are integrated with an on continual improvement. E Contact: Two Key Tensions dresses the tensions described above. In this arrangement, the enhance- Invensys application certified by SAP Stanley de Vries This calculation applies to all three ment of data quality and the conver- and which supports the standards of There are also challenges: Invensys Process Systems Invensys has studied plant operations levels of assets and is called the Asset sion into actionable information is ISA S95 and Open O&M.  operating with more visibility to London, UK for 15 years and has identified two Performance Vector (see diagram). highly automated. The asset perform- Additional sensing and integration stakeholders and peers, which Tel.: +1 301 529 6723 key tensions within organisational Although there are other key per- ance vectors for all types and groups of mobile onsite personnel is man- includes exposing performance [email protected] behaviour that must be well man- formance variables, availability and of assets are calculated by the Real- aged by ECS Automation, which pro- shortfalls; www.ips.invensys.com aged in order to achieve business utilisation interact closely and are optimisation. fundamental contributors to them. The first of these tensions is Each piece of equipment or asset between operators and mainte- exhibits different interactions and nance companies. Most maintenance therefore the shape of this curve will organisations are managed in a way be different for each. The important that maximises plant availability for a aspect of this calculation and its vis- reduced maintenance cost. However, ibility is that the “right” combination most operator teams are managed varies with the business situation. in a way that maximises utilisation, Maximising one of these sub-opti- for example throughput and yield. mises the other. In most cases, max- There is a natural tension between imising utilisation diminishes avail- these two. ability to the extent that the asset Stay cool when things get hot! The second point of tension comes must be overhauled more often and between the demands of plant floor is less reliable. However, maximising SITRANS T temperature measuring devices operations and those of the business. availability reduces the contribu- The business side, for example sup- tion of that asset, and as a result, its ply chain management and market- utilisation is unacceptably low. And ing, does not have sufficient insight short-term business situations often into the operations capability to make require a temporary preference of optimal decisions. At the same time, one over the other. In a petrochemi- the operations side does not have suf- cal plant, teams encounter a period ficient insight, or time, to consider the of time where maximum throughput Visit us at the near future. is required, followed by a period of Hannover Messe/Interkama+ minimum throughput/maximum ef- Attempted Solutions ficiency and variations in between. April 16–20, 2007 Hall 9, Booth A 72 Many petrochemical plants have Enabling the Digital Petrochemical Plant attempted to address these tensions www.siemens.com/hannover-messe www.siemens.com/interkama by installing software applications So how can the digital petrochemi- that automate key operations and cal plant achieve this? It requires a maintenance functions. But too often more comprehensive and a different

DIN Standards for Water Pressure Pipes

This structure gives improved pressure resistance particularly at elevated temperatures, offering more than a 50 % improvement in long- term strength at 70 °C over 50 years compared to standard PP-R materials. As a result, pipes based on this material can be produced with thinner walls thus with a larger internal pipe diameter, delivering a range of The German standards for poly- benefits to the plumbing industry and propylene (PP) pressure pipes were homeowners. revised in 2006. The designations A wider internal diameter gives PP-H100, PP-B80 and PP-R80 were pipes a higher hydraulic capacity, withdrawn as they did not reflect thus benefiting systems distribut- the required behaviour at elevated ing large volumes of water, such as

temperatures and were changed to in high-rise buildings. The capacity E20001-F130-P710-X-7600 PP-H, PP-B and PP-R. Also, pioneer- increase can also serve to overcome ing PP-RCT has now been officially the problem of low water pressure

recognised as a category under the from a supply network. P U BL IC I S new German standards DIN8077 and Environmental and cost-saving ad- DIN8078 for PP pressure pipes. The vantages can be generated for both creation of a new PP-RCT class means extruders and installers. Thinner that these solutions can now be tested wall pipes allow for higher extrusion according to a widely accepted qual- speed with reduced material usage, ity standard. while a higher percentage of smaller sitrans t According to EN ISO 1043 designa- pipes leads to smaller insulation, fit- tions, PP-RCT is a PP random copoly- tings and faster installation times. mer with special crystalline structure. E www.borealisgroup.com For many processes, continuous and precise temperature measurement is essential to guarantee- ing product quality and a fault-free process sequence. With the SITRANS T family, Siemens offers Lubrizol to Expand Presence in China a comprehensive range of sensors, transmitters and complete measuring points for any sector and different applications – they provide high precision and reliability and are intrinsically safe. The new The Lubrizol Corporation will expand company’s existing (thermoplastic SITRANS TH head-mounted transmitter series sets standards with regard to service friendliness: the its presence in China by investing ap- polyurethane plant in the Songjiang diagnostics LED shows at a glance the operating status of the device and thus offers fast and simple proximately US-$40 million to build industrial zone. The company expects diagnostics. And the test sockets enable fast, selective fault-ﬁ nding without interruption. a facility in Songjiang, just outside to begin construction in the third of Shanghai. The new facility will quarter 2007, and to complete it in SITRANS T – measurement ideas for any temperature! include manufacturing, commercial the fourth quarter 2008. Future plans For more information, fax to +49 911-978-3321 (Info service AD/Z 1308) and technical capabilities. It will be for the site could include adding other www.siemens.com/sitranst built on approximately 31,000 m2 re- laboratories and production lines. cently acquired land adjacent to the E corporate.lubrizol.com

[email protected] Page 14 Production CHEManager Europe 3/2007 The Great Challenge Power Plant Business and Technology Today

he requirements for fossil-fired pow- power generation. So as not to go be- tion, as high-priced market peaks can existing global coal reserves over the yond the given scope, this is restricted thus be better served and total plant long term. er plants have changed considerably here to concepts which: operation can be configured more

over the past 20 years. Where fos-  Use fossil fuels, profitably. Paths to the CO2-free Power Plant T  Cover base and intermediate Innovative solutions (e.g. FACY sil-fired power plants in the 1970s and ‘80s loads, from Siemens PG) were developed Of course, the long-term objective were characterised by steam power plants in  Permit large unit output levels for this purpose, enabling a signifi- is also to further increase efficiency (more than approx. 300 MW) and cant reduction in startup time from and environmental compatibility of base load operation with coal and oil fuels,  Are intended exclusively for night or weekend standstill for a 400 power plants. The developments initi- and gas turbines were used only infrequently electric power generation. MW combined-cycle plant. ated today are to no small extent also These measures have since been driven by the consequential costs of and then in peak load operation, the require- These concepts are coal-fired steam implemented in Siemens cycling- increased CO2 emissions and the set ments have now changed, with combined- power plants, natural-gas fired com- plants in Europe. Results in operation requirements for CO2 reduction (fig. bined-cycle power plants equipped confirm the preliminary estimate of a 3). Alternatives which are currently cycle power plants (gas turbines coupled with gas and steam turbines and reduction in startup time to consid- under investigation and which could with steam turbines) becoming established power plants with integrated gasifi- erably less than 40 minutes, or in- supplement the portfolio of power cation (IGCC). creased service life of the steam-path generation plants over the next internationally over the past 20 years. components (in plants with a Benson 10 – 20 years are as follows: Steam Power Plants boiler) with a corresponding commer-  Steam power plants with tempera- Scenario analyses indicate that fossil- cial advantage. tures of 700 °C, opening the door to fired power plants can be expected to A distinction must be drawn between All Electric E- LNG Concept an efficiency exceeding 50 % net. still make up the larger part of our steam power plants with sub critical  Combined cycle plants with in- power generation in 2020 based on and supercritical steam parameters, A new development derived out of CC- creased turbine inlet temperatures, further development of fuel prices this depending on the steam para- power plants is a concept for a power optimised gas turbine cooling and (fig. 1). meters upstream of the high-pressure plant supplying power to a LNG com- improved plant technology. The Based on the higher availability of and intermediate-pressure turbines. pression facility which is equipment objective is efficiencies exceeding natural gas, the increasing demand The critical point for water is at a with large electric variable speed 62 % net. for combined-cycle power plants arose pressure of about. 220 bar, beyond drives instead of gas turbines driv-  IGCC plants with efficiencies of 47 % primarily due to demands for short li- which there is no more difference in ing the gas compressors. net already achievable today and a censing and construction times, low density between the liquid and vapor This concept, highly integrated further potential of eight percent- investment costs, low pollutant emis- phases and these cycles can only be between the power plant side and age points. sions without supplementary flue gas operated in a once-through system the compression side allows a much  In addition to improving the envi- cleaning, as well as demands for high (e.g. Benson). Typically, power plants higher availability of the total com- ronmental compatibility of power cost effectiveness and short amortiza- with steam parameters above 250 pression solution and therefore a plants by increasing efficiency, tion times. Development was further bar/580 °C are designated as. higher operational efficiency of the the current focus is now also on accelerated by a change in customer A typical value for the energy ef- LNG production facility. Studies have methods which force improved en- structure in the global market from ficiency of a steam power plant based shown that a combined cycle power vironmental compatibility with the the classical state-owned utilities to on heating value (800 MW unit, hard plant with some adaptation to the separation of CO2. more competitively oriented private coal, condenser pressure 0.04 bar) flexibility is best suited to serve the companies. with sub critical steam parameters need of such LNG production facility. Three different CO2 separation meth- Based on the above scenario anal- (167 bar/540 °C/560 °C) is about 42 %. Driven by the demand of natural gas ods are being discussed and investi- ysis, natural-gas fired power plants Supercritical steam conditions must in high load centers (e.g. US), there gated: will by 2020 then account for a frac- be selected for higher energy effi- are major exploration programs un-  Separation under pressure before tion of power generation ranging from ciencies. Today, efficiencies of about der way which requires these more combustion of the fuel in a gas tur- a minimum of 18 % to a maximum of 46 % can be achieved with supercriti- cost efficient power plant concept. bine, such as in an IGCC plant (pre about 50 %, depending on expected cal, also sometimes called ultra-su- combustion capture), gas prices. percritical steam parameters of 285 IGCC Power Plants  Separation after combustion, e.g. However, steam power plants, es- bar/600 °C/620 °C under the same downstream of a conventional boil- pecially those fueled by coal, retain boundary conditions. With diversification and the availabil- er in a steam power plant or down- their significance with a fraction of High-efficiency steam turbines ity of natural gas, coal will continue stream of a gas turbine (combined 22–36 % in all scenarios. This is es- form the basis for effective use of to be a significant primary energy cycle plant) under atmospheric con- pecially the case in those countries the energy in the fuel in all signifi- source worldwide which must also ditions (post combustion capture), which are unable to adequately cover cant new power plants worldwide. face the continuously stiffer require-  Separation after combustion in pure their electric power requirements in Advances in turbine development ments for cost-effectiveness and en- oxygen (oxyfuel processes). Although a cost-effective manner with natural (such as 3-DS blading, reduced gap vironmental compatibility in use as a this is strictly also separation after gas despite expansion of the pipeline losses, titanium end stages) have fur- power plant fuel. An alternative to the combustion, this can be implement- network and which also have suffi- ther contributed in recent years to steam power plants introduced is the ed by “simply” condensing out the cient coal reserves which can be ex- significant further improvements in use of coal as the fuel in so-called in- water fraction due to the lack of a ploited at low cost. efficiency and reduced footprint. tegrated gasification combined-cycle nitrogen fraction in the fuel gas. With increasing natural gas prices, Higher steam parameters (main plants (IGCC). In this configuration, a power plants fired with imported coal steam pressure and temperature, syngas generation system with corre- The environmental problems already have also again become much more reheat temperature) enable higher sponding cleaning stages is integrated recognisable today show that the im- competitive for some locations in Ger- efficiencies for the overall system. upstream of a combined-cycle proc- plementation of these possibilities many close to major shipping lines. Research projects are currently in ess. Such plants are capable not only must be spurred on. This is currently Whether this trend will contin- progress in Europe with objectives of of using coal as a fuel, but other fu- supported by increased research ef- ue in the form of a renaissance for a main steam temperature of 700 °C els such as biomass, petroleum coke, forts both in the EU and international- coal-fired steam power plants also and corresponding efficiencies of to current levels of over 58 %; effi- increase the pressure to further in- Orimulsion, heavy refinery residues ly, with the first major projects for in- depends greatly on developments in >50 % and thus also a significant re- ciencies of 60 % are currently being crease efficiency. The development or waste can also be used (fig. 2). dustrial scale demonstration of these fuel prices for oil and natural gas, CO2 duction in CO2 emissions. However, implemented. The combination of low objective to be achieved by 2020 is In addition, this concept not only technologies in Europe and the U.S. certificate prices and the competitive- limiting factors here are availability, investment costs, extremely high effi- for net efficiencies exceeding 62 % offers the possibility of very clean announced for the next 10 years. ness of innovative power plant con- creep resistance and materials costs ciency and moderate fuel costs in the based on the lower heating value of use of coal at current maximum cepts such as IGCC (combined-cycle for the high-temperature area, which past have made this concept a com- the fuel. efficiencies of 47 % and in the future power plants with integrated coal have not yet been adequately inves- mercially successful power plant type. The high operating flexibility and about. 55 %, but also the possibil- gasification) and high-temperature tigated. Whereas combined-cycle plants were environmental compatibility of com- ity of producing fuels and starting steam power plants (700 °C). previously designed for base-load op- bined-cycle power plants is a clear materials for the chemical industry E Contact: Combined-cycle Power Plants eration at low natural gas prices, the competitive advantage of this tech- from the synthesis gas (polygenera- Lothar Balling Fossil-fired Power Plant Technology current emphasis is on flexibility and nology. In the deregulated markets tion). All of these are prerequisites Siemens Power Generation, Energy Solution Remarkable advances in gas turbine the possibility of use as an intermedi- it has crystallised that startup time for becoming more independent of Erlangen, Germany The following section describes the technology have enabled increases in ate load power plant. from a hot or semi-hot condition (fol- highly fluctuating natural gas and Tel.: +49 9131 18-5207 most important technology demanded net energy efficiency based on lower Increased natural gas prices and lowing night or weekend standstill) oil prices and unreliable sources Fax: +49 9131 18-7837 and implemented today in Europe for heating value over the last 50 years requirements for low CO2 emissions is a key criterion for efficient opera- and to further exploit the adequate [email protected]

Exxon Mobil Plans 20 Projects Through 2009 Exxon Mobil Corporation said Chairman and CEO Rex Till- ate,” said Tillerson. “Our view of it expects to start up more than erson noted that ExxonMobil’s what it takes to be successful in 20 new global projects in the financial strength, technological this industry has not changed. It next three years that, at peak, expertise, and superior resource requires consistency, integrity, are expected to add 1 million base allow it to meet the chal- discipline, reliability and ingenu- oil equivalent barrels per day to lenges of today‘s increasing de- ity. ExxonMobil has these quali- ExxonMobil‘s base volumes. The mand for energy while delivering ties in abundance.” project inventory at year-end industry-leading returns. 2006 is expected to develop 24 “Market and geopolitical billion oil-equivalent barrels net forces continue to shape the to ExxonMobil. environment in which we oper- E www.exxonmobil.com

Air Products Completes Expansion

Air Products said it has embarked space also features a general- on a major expansion of its China purpose lab with additional fume Technology Centre in Shanghai hoods, expanded chemicals stor- to support the fast-growing busi- age areas and associated office nesses in Asia. The expanded space to provide new application centre will further complement and product development, tech- Air Products’ regional technol- nical services, process R&D and ogy centres in Japan, Korea and in-region analytical to support Taiwan. The expansion, built on all businesses including Gases, space adjoining the current facil- tions that supplement the ex- Performance Materials and Elec- ity, has a high bay equipped with isting shoe sole capability. Two tronics. two high-pressure polyurethane spray booths, aqueous and non- machines and accessory tools for aqueous, will be used for spray both rigid and flexible applica- coating development. The new E www.airproducts.com

[email protected] CHEManager Europe 3/2007 IndustrI al l ocatI ons Page 15 Back On The Map ECSPP Wants to Bring More Chemical Investment to Europe

uropean Chemical Site Promo- target groups. The first would East. Europe is obviously in introduce a new class of mem- We are currently participat- be potential members. Howev- competition with those areas bers into ESCPP, namely asso- ing in two EPCA Think-Tank tion Platform (ECSPP), which er, we are also naturally target- for new investments. ciate members. These will be projects on supply chain prac- was formed in September ing the investment community, supply organisations and serv- tices in chemical clusters. By E because we want to see more How can Europe compete with ice providers who would also participating in such projects, 2005, is an organisation that is active investment coming to Europe. other areas of the world in terms benefit from new investment we can also ensure that our in the promotion of Europe as an We are also looking at other of cost? coming to Europe, but who, members’ interests are taken potential strategic partners. unlike full members, are not into account. attractive region for new chemical Our long-term goal is ex- P. Anderton: Europe has always primarily managers of chemi- investment. Now officially a regis- pressed in our slogan, “Putting been able to compete with the cal sites. This would include What can you tell us about other Europe back on the chemi- rest of the world in terms of companies like logistical service partners? tered European association, ECSPP cal investment map.” A lot of overall cost. Today, the only providers, industrial gas sup- is looking to increase its membership our efforts will be aimed at area where Europe has a rela- pliers, engineering contractors P. Anderton: We have recently changing perceptions about tive competitive disadvantage is and so on. set up a strategic partnership and raise awareness of what Europe Europe as a place for chemi- in raw materials, particularly with ECRN. We’re cooperating has to offer as an investment location. cal investment. We believe that when one makes a comparison What criteria are there for re- in a number of areas and we’re particularly in the chemical to the Middle East. However, cruiting chemical sites for mem- looking at topics we would like The organisation is also strengthening industry outside Europe, there Europe compensates for that bership? to explore together. We are its links with other well-established are still some misconceptions by being able to offer competi- sending representatives to each about Europe as an investment tive features in other areas such P. Anderton: It’s very simple: To other’s meetings to develop an European institutions, including the location. This is an issue we as clustering. The concept of become a full member of ECSPP, understanding about where European Chemical Regions Network want to redress by going out chemical clusters or industrial they have to be an organisation each organisation is coming and explaining what Europe mate which offers the chemical number of excellent opportu- parks is very widely practised located in Europe which man- from. We also feel that we can (ECRN), the European Petrochemical has to offer. investor many positive things. nities for investors. Europe is here; Europe leads the world ages a chemical site or cluster, assist ECRN in its activities for Association (EPCA) and the European We’ve noticed a clear shift of also very strong in other areas in the number of chemical which has land available for the EC’s 2007 High-Level Group What are these misconceptions investment towards other areas such as logistics, infrastructure clusters. By operating within expansion and which is keen to on Chemicals project. Chemical Industry Council (Cefic). and what has happened over of the world over the past few and operational safety. The a cluster, chemical producers attract new investors to their Brandi Hertig Schuster spoke with the years that Europe needs to years, such as to Asia and the European market is not grow- are offered great opportunities locations. What projects are you currently be put “back on the chemical in- Middle East. We are concerned ing at the same rate as Asia in to achieve significant savings in working on with Cefic? Peter Anderton, President of ECSPP vestment map”? that Europe is being overlooked relative terms, but in volume terms of investment and operat- ECSPP has recently strength- and former business development to some extent, and we want to terms, the growth is stronger. ing costs. This more than com- ened its ties to the EPCA. What P. Anderton: We have started P. Anderton: When I was with make sure that investors are This is something that tends to pensates for any disadvantage will this mean for your organisa- a dialogue with Cefic. They are manager for the Port of Rotterdam, the Port of Rotterdam, I heard correctly informed about the be forgotten sometimes. Mar- Europe may have on the raw tion and its members? setting up a high-level advisory about his organisation’s plans for things during conversations opportunities in Europe when kets in other parts of the world material side. group on chemicals this year, with potential investors that did they look at potential locations can also be accessed easily and P. Anderton: In the long run, we which will provide input for the Europe. not reflect the real situation in for their next chemical plant. economically from European How do you intend to achieve both have the same underlying EC’s project. We are also dis- Europe. Some people still seem locations. membership expansion within objective, and that is to en- cussing how we can assist them CHEManager Europe: Mr. Ander- to have the impression that it’s What are the advantages for Europe? sure that the European chemi- in their sectoral projects, partic- ton, what are ECSPP’s short- and very bureaucratic and complex chemical sites in Europe? What other areas in the world cal industry flourishes. Be- ularly in those areas where our long-term goals? to invest here and bogged down would you consider to be com- P. Anderton: We are launching cause the organisations come members have special expertise by things like regulations, prob- P. Anderton: Things like co-sit- petition to Europe? a pro-active recruitment drive. from different angles, we can such as infrastructure, logistics, P. Anderton: For the short term, lems with trade unions and so ing, outsourcing of non-core op- We have a database of organi- work together to complement energy and feedstocks. we want to raise our visibility on. These views are relics of erations and sharing site serv- P. Anderton: The main invest- sations that we feel could be each other’s perspectives and within the chemical industry the past. Today’s Europe pro- ices are widely practised here ment drive is focussed on China, potential members of ESCPP. In knowledge. This will, in turn, and towards our three main vides a welcoming business cli- in Europe, and this creates a the rest of Asia and the Middle addition, we are also going to strengthen both organisations. E www.ecspp.org

UPDA Acquisition of Oil and Gas Leases in Kansas Albemarle: Chinese Technical Centre The Universal Property Devel- within the year. In addition, conventional reservoirs,” Leahy wells are dewatered, gas pro- Specialty chemicals maker Asia Pacific customer technical Albemarle began construc- opment and Acquisition Cor- UPDA will extend the gathering explained. duction increases. The water Albemarle has opened a new service team, which currently tion on its 67,000 m2 site at the poration (UPDA) has executed system and pipeline in order to “Coal underlies the east- is pumped into disposal wells, Technical Centre and broke assists users of Albemarle’s Nanjing Chemical Industry Park a letter of intent to acquire oil efficiently bring the production ern quarter of Kansas, in both usually in the Arbuckle Forma- ground on a phosphorus flame flame retardants for poly- in December 2005 and opened a and gas leases covering ap- market. the Cherokee and Forest City tion. According to the Kansas retardant manufacturing plant urethane foams and thermo- polyolefin catalyst repackaging proximately one million acres in “Coalbed methane is the basins,” said Larry Brady, Geologic Survey, the average at the company’s first wholly plastic polymers, and users of facility in May 2006. The flame Kansas (U.S.). While these natu- natural gas that lies trapped in geologist, Kansas Geological coalbed-methane well in south owned site in China. Albemarle’s antioxidants for retardant plant is scheduled for ral gas leases are not limited in coal seams at shallow depths. Survey. The region is blessed eastern Kansas can produce 60 The technical centre houses polyolefins. The site also may mechanical completion in the depth, the acquisition will es- It is different from other with as many as 17 sep- million f3 of gas during a two- polymer and flammability test- serve as a new product devel- fourth quarter of 2007. tablish UPDA as one of the larg- resources because it arate coal seams, year period. ing laboratories and adminis- opment center for polyurethane est coalbed methane developers is both generated ranging in depth In addition to the 113,000 trative offices for Albemarle’s foam flame retardants. E www.albemarle.com in the state of Kansas. and stored with- from the surface acres in the Cherokee basin, Approximately 113,000 of the in the coalbeds to 2,000 feet. UPDA intends to acquire rights acres to be acquired are located themselves. However, they in the Forest City Basin, includ- on the Bourbon Arch, a north- It also is an do not attain ing leases totalling 766,000 ern extension of the Cherokee attractive re- the tremen- acres, dozens of well bores, Basin. Included are four active source be- dous thick- surface equipment, gathering production batteries spanning cause it occurs nesses that are and surface facilities, as well as across the Bourbon Arch and within coal, common in the all geological, engineering, land defining a 12 mile long project which is the most Rocky Mountain and accounting data and records area. Completed intervals range abundant fuel in basins. relating to this property. These from 400 to 1000 feet deep, the United States,” said The typical Cherokee leases are generally long term in with production gathered and Patrick Leahy, associate direc- Basin well is drilled on 80-acre nature, allowing UPDA to sched- handled at facilities common tor of geology for the U.S. Geo- spacing. Sustained initial pro- ule a secondary drilling program to each area. UPDA intends to logical Survey, at the congres- duction rates vary from 10,000 upon completion of the program establish an aggressive drilling sional briefing. “Coal acts like to 150,000 f3/d, and water pro- in the Cherokee Basin. program in this area, complet- a sponge, storing six times the duction will kick off at 10 to 70 E www.universalpropertydevelopment.com ing a minimum of 100 wells volume of natural gas found in barrels per day per well. As the E www.kansas.gov

Eisai: Manufacturing Subsidiary ExxonMobil: Polymers Centre Your springboard to the markets of Europe – Eisai has established its phar- ucts across Europe. In addition, ExxonMobil Chemical has Consisting of several testing Invest in the Bayer Chemical Parks maceutical manufacturing sub- EML will be recruiting manu- opened of its new Polymers laboratories and processing sidiary Eisai Manufacturing Ltd. facturing/quality assurance ex- Automotive Applications Centre equipment, the centre provides (EML) in Hatfield, UK. EML is perts by the targeted operation in Kawasaki, Japan. The appli- specialized assistance to cus- Research, development and efficient production – if this is your brief, then the con- owned by the company’s Eu- launch in fiscal year 2008. cations centre will support its tomers in all aspects of appli- ditions you need can be provided by the Bayer Chemical Parks and their operator ropean regional headquarters, According to the company, polymers portfolio, including cations development, including Bayer Industry Services. With our help you can focus on your business, operating from Eisai Europe Limited. Eisai has been rapidly expand- specialty elastomers such as material selection, mold design, some of the most attractive chemical production sites in Germany. Form synergies and strategic alliances – more than 60 national and international companies will be EML, which is the company’s ing its European operations with Santoprene thermoplastic vul- processing, and testing, to inno- your partners at the Chemical Parks – and thereby improve your position on the market. first manufacturing facility in the planned construction of the canizate (TPV), polypropylene vate and deliver new products The Bayer Chemical Parks Europe, shall function as the European Knowledge Centre. compounds, and other specialty to the marketplace. core base of quality assurance Located in the pharmaceutical polymers. The new applications • Three locations in the largest chemical region in Europe and supply chain management cluster to the north of London centre is located at the site of • A complete infrastructure for chemical and chemical-related businesses • A unique product network with link-ups to all important utilities and product pipelines for the Eisai’s European opera- Hatfield, the Centre shall con- Tonen Kagaku K.K., an affili- • Outstanding road, rail, waterway and air connections tions. Establishment of a manu- solidate Eisai’s all key value ate of ExxonMobil Chemical. E www.exxonmobilchemical.com • Vacant sites for commercial/industrial development ranging in size from 0.5 to 20 hectares • Excellent R&D infrastructure facturing base in Europe aims chain components in the entire to enhance Eisai’s global supply region, including headquarters, Bayer Industry Services chain, ensuring the Company’s discovery & clinical research, • The biggest chemical park operator in Germany commitment to a stable supply production, and marketing. Movianto Boosts Capacity • A full service offer with customized service packages – round the clock of safe and high-quality prod- E www.eisai.com • The Bayer Chemical Start Up Initiative – targeted support of fledgling chemical companies and potential entrepreneurs wishing to set up business at the Bayer Chemical Parks Movianto, a Europe-wide lo- to Dublin, Ireland and Brno in gistics service provider for the the Czech Republic got under- Contact: pharmaceutical and health- way in 2006, and started oper- Dr. Joerg-Michael Soeder Tel.: +49-214-30-3 19 30 Mitsui Chemicals Opens in India care industry, has extended its ations in January. Both ware- Fax: +49-214-30-3 19 18 warehouse capacity in Ireland houses have been constructed E-mail: [email protected] Mitsui Chemicals opened a dia. The office belongs to Mit- and the Czech Republic by con- in accordance with the latest liaison office in New Delhi, sui Chemicals Singapore, Ltd., structing two new warehouses. technical standards and comply India. This office is the first lo- a 100 % MCI subsidiary based This has increased pallet ca- with the quality requirements cal stronghold for MCI, which in Singapore. Mitsui Chemicals pacity in Ireland from 5,000 to for pharmaceutical logistics will support the market devel- Singapore, Ltd. will be renamed 12,000 spaces and in the Czech and distribution Good Distribu- Bayer Industry Services focus on your success opment of its Elastomers busi- as Mitsui Chemicals Asia Pacif- Republic from 3,000 to 10,500 tion Practice (GDP). GmbH & Co. OHG 51368 Leverkusen ness, as well as conduct market ic, Ltd. in April. spaces. Deutschland research, market development Construction of the new www.bayerindustry.de support and on-site study of In- E www.mitsui-chem.co.jp/e warehouses at Greenogue, close E www.movianto.com

[email protected] Page 16 IndustrI al l ocatI ons CHEManager Europe 3/2007 Singapore – Asia’s Chemicals Hub Opportunities Abound Amidst Asia’s Growing Need for Energy

t is a bit of an anomaly that Singapore has For foreign chemical companies like ethylene glycol (MEG) plant, which Singapore has aligned its strategy those from Europe, the U.S., Japan or will provide crucial raw materials to focus on developing a knowledge achieved international standing as a key the Middle East, the city-state offers for downstream players in Singapore. economy, with R&D playing a key player in the chemicals industry, despite various key advantages – its contain- This multi-billion dollar project is the role. I er ports are well-connected and effi- company’s single largest outlay in Already, technology and R&D drive the fact that it does not have any oil or gas cient, it has the world’s top three bulk Singapore to date. the country’s economy as well as its resources of its own. Today, it ranks amongst liquid ports, and its growing network Singapore is also hoping to hear industry development. About three- of free trade agreements enhances from ExxonMobil on another world- quarters of private companies are the top three global centres for oil refining, market access to many countries and scale steam cracker and derivative engaged in some form of in-house and oil trading and price discovery; it is one regions. units to be integrated with its exist- R&D. With 105.8 researchers per In terms of government policy, ing refinery and chemical plant in 10,000 labour force, its R&D resourc- of the world’s top 10 petrochemical hubs, and the country has received accolades the near future. Should ExxonMobil es are comparable to those of other top three bulk liquid ports. It is also home to affirming its pro-business environ- decide positively for Singapore, it will, developed countries. And not to men- ment – such as being the world’s together with Shell’s new cracker, cat- tion the government’s move to raise eight of the top 10 flavours and fragrances most competitive, as well as the alyse a wave of new projects that will R&D spending from 2 – 3 % of GDP by companies globally. easiest, place to do business, robust double Singapore’s chemical output. year 2010. intellectual property (IP) regime and BASF, recognising the commit- But is growth sustainable? And what sophisticated manpower capabilities. Seeding New Firsts ment, opened its research centre for opportunities are there for chemical Its holistic approach to developing the nanotechnology for Asia in Singapore companies in the republic, especially industry has spawned ecosystems With Singapore’s reputation for the last year. “This centre will help us those from Europe? within which related industry players respect of IP and its strengths in better pick up new emerging technol- Jurong Island: the centrepiece of Singapore’s chemical industry and home to more than 90 com- According to the Singapore Eco- interact in synergy with each other. panies from all over the world. implementation, it is gaining ground ogy trends. It allows us to strengthen nomic Development Board (EDB), the as a partner for companies to debut our ties with innovative, technology- country’s one-stop investment promo- Strong Foundation Built over Decades Chemical Process Technology Centre Taking it to the Next Level their key technologies. driven customers in Asia and open tion agency, the chemicals cluster has (www.cptc.edu.sg), a fully operational British firm Lucite International up new market opportunities,” said exhibited strong growth with a com- Lying at the south-western tip of the “live” plant dedicated to building up With this foundation, companies big will be implementing in Singapore Dr. Martin Brudermüller, member pounded annual growth rate of 20 % country, Jurong Island is the nerve manpower competencies needed by and small, new and existing, have its new alpha technology for methyl of the board of executive directors since 2000. Its manufacturing output centre of the chemicals cluster. It is the growing chemical industry. Like- been constructing more facilities metacrylate (MMA) for the first time, of BASF and responsible for Asia jumped 12 % from a year earlier, to home to over 90 companies engaged wise, the similarly-located Institute of and anchoring key operations here. testifying to Singapore’s ability to Pacific. exceed US-$48 billion. Part of the in a range of manufacturing activi- Chemical and Engineering Sciences In 2006, fixed asset investments in help bring new technology to market. In the same vein, Mitsui Chemi- manufacturing sector which drives ties in petroleum, petrochemicals, (www.ices.a-star.edu.sg) is focused on the chemicals cluster rang to the tune Mid-way across the globe, Japan’s cals opened the Mitsui Chemicals the country’s economy, the chemi- specialty chemicals and support- Sumitomo Chemical is also building Singapore Technical Centre in Sin- cals cluster is made up of the oil and ing industries. Adhering to a holis- 2006 Singapore Manufacturing Output: US-$148 billion a similar MMA facility on Jurong Is- gapore, its first R&D centre out- gas, petrochemicals and specialties tic approach, the island’s dedicated land. Together, both companies will side Japan, to focus on the areas of sectors. It is today one of the largest environment spans infrastructure, enable Singapore to account for 10 % catalysis and asymmetric synthesis. contributor to the country’s manufac- integration, connectivity, capabilities, General Manufacturing of global MMA capacity and propel Dr Akihiro Yamaguchi, Senior Man- turing sector. and security. Transport Industries Jurong Island to become Asia’s lead- aging Director and Group Executive Engineering The agency points to a burgeon- The integrated approach benefits 7% Electronics ing site for MMA production. (R&D Centre), Mitsui Chemicals, said, 8% ing Asia, an area widely expected to everyone. Physical proximity means Precision 32 % In Shell’s plans already underway, “In order to conduct R&D efficiently be the fastest growing region in the that chemical products and raw mate- Engineering 10 % it will also be implementing its propri- and consistently, we need a number world over the next few decades, rials can be conveniently traded among etary OMEGA (Only MEG Advanced) of things including human resourc- 10 % escalating need for energy and ris- companies, while shared third-party technology in the new MEG plant. The es, excellent facilities, up-to-date ing consumerism for the optimism. utilities and services translate to cost OMEGA technology is touted to be the information on science and technolo- 33 % Therefore, Singapore is further fuel- savings. The plug-and-play infrastruc- Biomedical most efficient technology currently gies, and researchers should feel se- ling its growth by moving towards a ture includes a chemical logistics park, Manufacturing available in the world to convert eth- cure. And Singapore satisfies these more diversified chemical industry multi-layered security framework and ylene to MEG. requirements.” and higher value-added downstream one of Asia’s biggest oil and chemical Chemicals If this trend continues, Singapore activities as it takes steps to strength- storage capacities. Work has begun on will be expected to play host to other en its base. new underground rock caverns which first-in-the-world technologies and will add as much as 23 % storage space Source: Singapore Economic Development Board © GIT VERLAG know-how from companies world- A Trusted, Connected Exchange when fully developed. wide. E Contact: The strategy of integration means improving the science and technology of US-$1.7 billion, up 30 % from the Singapore Economic Development Board Located in the heart of a rapidly the government has been placing base by providing highly trained R&D year before. Creating New Knowledge Tel: +65 6832 6832 developing Asia, the city-state makes as much emphasis on the software manpower, and to develop technology The latest addition is Shell Eastern Fax: +65 6832 6565 the most sense as a base for compa- of manpower as it has hardware. and infrastructure to support future Petroleum’s investment in a world- Looking beyond the horizons to meet [email protected] nies which want a piece of the action. Sited on Jurong Island is the unique growth. scale ethylene cracker and mono- the challenges of global markets, www.sedb.com The Australia Story 16 Years of Economic Growth

he Asia-Pacific region is fast becom- technology, medical devices and other Sydney is the most populous city in Australia with a healthcare companies in December ing the engine room of world eco- metropolitan area population of over 4.2 million. 2005 had increased by 56.5 % com- nomic growth. For the next 10 years, pared to the previous year. T Australia may only have around experts forecast that Asia’s economies will 0.3 % of the world’s population, but account for 45 % of world gross domestic it contributes 2.5 % of the world’s medical research. Pharmaceutical product (GDP), based on purchasing power evergreens such as penicillin, the parity – significantly more than the U.S. and cochlear implant and the world’s first cancer vaccine had their ori- Europe combined. Not only due to its ideal gin in Australia. However, this may geo-strategic position, the Fifth Continent is not surprise very much. In the fiscal year 2004, business expenditure on well-placed to take advantage of economic in- biotechnology R&D was about €229 tegration as centre of gravity, while economic million. In 2005, Australian biotechnology companies announced 384 activity shifts to the Asia-Pacific region. partnerships, of which 72 % were with overseas companies or agen- In 2006, the Australian economy by sea. However, to some degree, How the Government Invests Down Under What proves to be a lucrative a subsidiary of the Merck KGaA, while cies. In addition, the industry has was ranked the most resilient in the all exports from Australia except for investment destination with regard AstraZeneca and the UK-based Glaxo 474 therapeutic products in develop- world for the fifth year in succession, bulk commodities use airfreight. The socio-economic parameters speak to economic growth potential also SmithKline round off the picture. Also ment and Australian inventors were according to IMD World Competitive- International businesses consider in favour of Australia as investment offers good condition with regard to with the UK-based company DST In- granted 46 biotechnology patents in ness Yearbook 2006. At the same the quality of Australia’s air trans- destination. Nonetheless, the Austral- tax matters: Australia is the eighth- ternational in the Financial Services the U.S. in 2005. time, the International Monetary portation as effective and exemplary. ian government provided extensive lowest taxing country in the 30 mem- sector and the French Aerospace Fund testifies in its World Economic “There are significant logistical ad- financial support, got involved in the ber OECD. In the fiscal year 2005, group Thales ATM, as well as with Reaching Out To Investors Outlook that the nation’s strong eco- vantages in building equipment for creation of major national research Australia’s total tax revenue was the German automotive companies nomic growth rates have exceeded export to China in Australia,” said facilities and created a transpar- 31.2 % of GDP, compared to an OECD Mahle, Schefenacker Vision Systems The government has been diligently those of most other major Organisa- Sean McLanahan, executive vice ent legal environment in its attempt average of 35.9, according to OECD and Siemens VDO, European global paving the way to success over the tion for Economic Co-operation and president and chief financial officer to foster an innovative culture and Revenue Statistics. players have made their decision for last decades. Among its strategic Development (OECD) economies in- of the U.S.-based McLanahan Cor- research and development (R&D) in- Australia. decisions to facilitate doing business cluding the U.S., the UK, Germany poration. “We felt very comfortable frastructure. European Multinationals Bank in Australia was the establishment and Japan, while the GDP has grown coming to Australia. The business Within the framework of its innova- on Australia Biotech Is Setting Standards of Invest Australia, the Australian by an average 3.6 % annually since conditions are similar to the United tion program “Backing Australia’s Abil- Government’s inward investment 1996. States and as a whole, it was easy ity,” the government has announced to A lot of international companies have Asked for the reason of their bio- agency in 1997. From its 15 offices to establish our office in New South provide €5 billion (AUS-$8.3 billion) found a home in Australia. Accor, tech success, the Australians tend to worldwide including Frankfurt, Lon- Australia’s Infrastructure Wales. So far the only big difference until 2011 to fund innovation. Be- American Express, IBM and Lufthansa explain that the country’s low cost don, Paris, New York, Dubai, New is the Australian accent.” sides, the R&D tax concession allows are just a few globals that have locat- research and development, excep- Delhi, Beijing, Shanghai, Singapore As about 1.5 billion t of freight is With regard to road and rail net- companies incorporated in Australia ed shared services centres catering to tional scientific talent and transpar- and Tokyo, the agency helps global moved along the national road networks and port facilities, Prime Minis- to deduct up to 175 % of qualifying international markets in Australia. ent and dependable regulatory sys- companies to establish or build their work every year, transport plays a ter John Howard recently established expenditure on R&D activities. Com- Likewise, a number of European tem have helped to make Australia business in Australia. critical role for the Australians in a export infrastructure task force to plementing this government support multinationals operating in Austral- an attractive destination for biotech supporting economic growth and identify priorities and reduce impedi- for R&D, the Australians can refer to ia forms an impressive list of well- investment. In fact, there are more E Contact: community needs. The Australian rail ments to investment. Private sector strong growth in business expenditure known names. With regard to the than 420 biotechnology companies Gregor Rodehüser network links all five mainland state participation has proven and tested on research and development. In the ICT sector, the country can refer to making Australia the number one Fleishman-Hillard Germany GmbH capital cities and the major inter- in energy and export-related sec- fiscal year 2005, the volume increased the French companies Alcatel and biotech location in the Asia-Pacific Tel.: +49 69 40 57 02 463 modal ports. Maritime transport is tors but also in areas such as gen- for the sixth consecutive year to a Webraska, as well as Ericsson from and sixth in the world. The estimat- Fax: +49 69 43 03 73 also critical to the economy as 99 % eral transport and water supply and record €5 billion, effectively doubling Sweden. The pharmaceutical indus- ed market capitalisation of the 157 [email protected] of imports and exports are carried purification. over the past five years. try is represented by Alphapharm as Australian Stock Exchange listed bio- www.fleishmaneurope.de

[email protected] CHEManager Europe 3/2007 ChemiC als Page17 Uncertain Start To 2007 Can 2006 Be Repeated?

he picture for the year 2006 confidence is declining slightly but remains well above chemi- is almost complete; most indi- cals confidence. cators are available and show Looking at single manufac- T turing sub-sectors in January, excellent results for the European production expectations are DowReportedlyinPartnershipTalksReliance chemical industry in 2006. Chemi- very encouraging for machinery and equipment; automotive; cals production (excluding pharma- According to the Wall Street Journal, Dow Chemical is in talks and food and beverage. Elec- with Mumbai-based petrochemical firm Reliance Industries ceuticals) grew by 1.9 %, which is trical machinery; rubber and regarding a potential partnership that would broaden Dow plastic; and basic metals are above growth of 2005 and above the Chemical’s presence in the developing world. The newspaper very satisfied with production in cited sources familiar with the matter. The paper reported that long-term average. Producer prices recent months, but only slightly the deal has been in the works for months. According to reports, optimistic about the future. For finally reflected the oil price and the both the companies are reviewing whether to have a 50-50 own- the basic metal industry, this ership structure, or to tilt ownership slightly to one side or the index decreased slightly at the end of represents a sharp decline in other. Dow CEO Andrew Liveris said he would “neither deny, nor its production expectations. A 2006, resulting in a yearly growth of confirm” the rumours. Reliance has also declined to comment. modest improvement is expect- E www.dow.com chemicals producer prices (excluding ed for printing and publishing; E www.ril.com and pulp and paper. Clothing pharmaceuticals) of 4.9 %. Sales data and textiles are negative about is only available through November production in recent months and, moreover, do not expect 2006, but indicates a good year, with successfulstartOfOxea an improvement – even a de- chemicals sales growth (excluding terioration. The Oxea Group launched its business operations under the ownership of investor Advent International. In December, Advent pharmaceuticals) of 6.6 %. European Economic Sentiment International took over selected businesses of Celanese Chemi- Indicator: Record Level cals and chemical company European Oxo, a joint venture of The good performance of Celanese and Degussa, for the purchase price of €480 million. the chemical industry is also After a very successful year in The companies were consolidated into a new company follow- reflected in a trade surplus which the EU economy grew ing approval by the antitrust authorities. The product range increase of 11 % comparing even faster than the U.S., the of the transferred businesses remains fully intact, and exist- data from January to Septem- global perception of the EU ing contracts and orders will be taken over by Oxea. The Oxea ber of 2006 and 2005. Despite economy is not surprisingly at Group has proforma annual sales of €1.2 billion and employs the positive results of 2006, record levels. Even consum- some 1,300 people at four production sites in Germany and the there is some hesitation in the ers seem to be confident about U.S. On a worldwide scale, Oxea produces and markets polyols, chemical industry whether this their economic situation, as the solvents and oxo derivatives. outcome can be achieved again EU confidence indicator shows E www.oxea-chemicals.com in 2007. Business confidence in 2006. The services sector in the chemicals sector has has reached a record level and been decreasing, but industry seems to be looking to a bright FmCacquiresaccesstosankyoagroFungicide a whole does not share these future. A slight dip in the eco- doubts and has an optimistic nomic confidence indicator in FMC Corporation and Sankyo Agro have announced that FMC view of the coming year. end of the year did the producer in sales growth towards the end Inorganics is the only sector December 2006 hints at some has secured exclusive access to simeconazole, a proprietary, price indexes – especially for of the year. This trend is how- with an increasing trade defi- doubts whether this excellent triazole fungicide. Under an agreement with Sankyo Agro, FMC 2006: Excellent Year petrochemicals and basic inor- ever counteracted by certain cit, 7 %, but it remains minor performance can be repeated has acquired the rights to develop, register, market, and sell both ganics – actually reflect the eas- subgroups, such as consumer in value in comparison to the in 2007. But signs for optimism stand-alone and combination products containing simeconazole 2006 can be seen as an excellent ing of the oil price pressure. chemicals, specialties and phar- trade surplus of the other sub are increasing: An international globally, except for several countries in Asia and the Middle East. year for the chemical industry, At the beginning of 2007, the maceuticals which have rising sectors. survey, conducted by the serv- Subject to EPA approval and completion of the development pro- with growth rates above the oil price continued to decrease sales figures. The competitiveness indica- ice firm Grant Thomson shows gram, first sales are expected in 2010/2011 timeframe. long-term average. After the to US-$53.6 per Brent barrel, tor for the third quarter of 2006 that business confidence in the Simeconazole was discovered and patented by Sankyo Agro dip in the production index of a similar price level to what EU External Trade Surplus Up 11 % does not reflect the excellent European Union has overtaken and has been registered in several countries in Asia and the chemicals excluding pharma- was last reached in June 2005. performance of the European optimism in the U.S. for the first Middle East. Sankyo Agro actively markets the product in Japan ceuticals in September 2006, Energy prices remained rather In 2006, the EU trade surplus chemical industry on external time in five years. Asian Busi- and has secured registrations for use in rice, soybeans, pome & the index continued rising until constant during the last three in chemicals rose by 11 %, back markets. However, in the last ness leaders were the world’s stone fruit, vegetables, strawberry, tea and turf. the end of the year back to the months of 2006, at clearly low- to levels of 2003, comparing quarter of 2006 the indicator most confident ones. E www.fmc.com record levels of August 2006. recovers towards its long-term And another recent survey E www.sankyo.co.jp This led to yearly production average, indicating that the by NTC Economics states that growth of 1.9 % for chemicals Sectoral breakdown of EU chemicals trade balance: chemical trade surplus might European manufacturers are (excluding pharmaceuticals). 2005 Jan–Sep versus 2006 Jan–Sep still increase in the last quarter more optimistic that they will monopropyleneGlycolfromRenewableResources Pharmaceuticals remained the 70 of 2006. The competitive posi- be able to raise output, profits top performer with yearly pro- tion on the internal EU market and employment in 2007 than 60 The Dow Chemical Company announced the introduction of duction growth of 7.1 %, the Inorganics is much more stable than on they were one year ago. But big monopropylene glycol derived from renewable resources. Pro- other two out-performers being 50 Polymers the external EU market and differences exist within Europe. pylene Glycol Renewable (PGR) is made from glycerin generated specialties and consumer chem- Organics remains rather constant in France is at the bottom of the 40 during the manufacture of biodiesel, a diesel-fuel alternative icals with 3.2 % and 4.1 % pro- Consumer Chemicals 2006, indicating a positive per- survey while the Netherlands is produced from vegetable oil. Dow is currently conducting PGR duction growth in 2006. They ception of internal competitive- most optimistic. 30 Specialties trials with customers and anticipates having limited commer- improved their performance of Pharmaceuticals ness. cial quantities available in mid-2007. PGR will be used in such the year 2005 by and large. 20 Authors: applications as unsaturated polyester resins (UPR) for boat hulls Basic inorganics production The EU Chemical Industry: Dr. Moncef Hadhri, and bathroom fixtures as well as aircraft de-icers, antifreeze for increased by 1.7 %, which rep- 10 Uncertainty in 2007 Andrea Weigel automobiles, recreational vehicles and marine and heavy-duty resents a slowdown from 2005 0 Cefic laundry detergents. The company has called this a “milestone but is above average growth of 2005 Jan–Sep 2006 Jan–Sep Business confidence for the in the quest for sustainable chemistries.” the last 10 years. Petrochemical –10 chemical industry decreased E Contact: E www.dow.com production increased by 1 %, a sharply in January, reflecting Dr. Moncef Hadhri Source: Eurostat (Comext) and Cefic © GIT VERLAG slightly lower growth rate than the uncertainty over future Brussels, Belgium 2005 and below average growth developments of the chemical Tel.: +32 26 767211 Cross-licensingagreement:DegussaandRhodia of the last 10 years. Polymers er levels than in the second and January to September 2006 industry after an excellent year Fax: +32 26 767300 were the only sector with a pro- third quarters of 2006, with a to the same period last year. 2006. However, the outlook is [email protected] In recent years both Rhodia and Degussa have independently duction decrease of –0.2 %. slight increase in December. The increase in the trade sur- still optimistic. Manufacturing www.cefic.be developed and protected valuable Intellectual Property (IP) plus with Nafta (North Ameri- related to the manufacture and use of precipitated silica. Producer Prices Decreased Chemicals Sub Sectors can Free Trade Area) is most Degussa and Rhodia have, in order to enable their respec- Sales Increase remarkable, resisting rumours tive customers to effectively use their IP, entered into a cross- In 2006, chemicals producer of a slowdown in the Ameri- licensing agreement with each other in December, providing prices (excluding pharmaceu- Data from January to Novem- can economy. The trade sur- Degussa and Rhodia freedom of action to make available ticals) increased by 4.9 %, ris- ber 2006 show chemical sales plus with Asia, Latin America the said precipitated silica developments to the market and ing continuously over the whole (excluding pharmaceuticals) and Middle East shows a slight customers. Thereby the customers of both parties can to the year with a slight decrease in benefiting from a growth rate decrease, comparing January largest extent possible benefit of the Intellectual Property of the last month. Petrochemi- around 5 % or more in all main to September 2006 to the same Degussa and Rhodia. cals are still leading the price sub sectors, comparing this period last year. Trade with Chi- E www.degussa.com surge, with an increase of 8.9 % period with the same period na is rising at a fast pace, but E www.rhodia.com EU chemicals trade balance: 2005 Jan – Sep versus 2006 Jan – Sep

Euro Million 2005 Jan – Sep 2006 Jan – Sep Change BasFandmonsantoannounceCollaboration Pharmaceuticals 22.26 24.86 12 % Specialties 10.46 11.31 8 % BASF and Monsanto have announced a long-term joint research Consumer Chemicals 9.13 9.70 6 % and development (R&D) and commercialisation collaboration Organics 5.60 6.59 18 % in plant biotechnology that will focus on the development of Polymers 4.54 5.36 18 % Inorganics –1.90 –2.03 7 % high yielding crops and crops that are more tolerant to adverse Chemicals excluded Pharma 27.83 30.93 11 % environmental conditions such as drought. The collaboration is effective immediately. in 2006. Polymer prices grew by last year. Fertilizers are the only imports are outpacing exports Over the life of the collaboration, the two companies will dedi- 4.7 % and basic organics by 6 %. sub group with a negative sales and therefore the trade defi- cate a joint budget of potentially €1.2 billion to fund a dedicated Prices of consumer chemicals growth of –0.2, continuing the cit in chemicals with China is pipeline of yield and stress tolerance traits for corn, soybeans, and specialty and fine chemicals negative trend of recent months. growing. cotton and canola. The joint pipeline will include the companies’ registered a modest increase – Petrochemicals remain the top The increase in the trade existing and planned yield and stress tolerance programs and 2 % and 2.6 % respectively. The performer with sales growth surplus is spread over almost be comprised of projects generated by independent plant bio- more modest price increase of almost 10 % for the period all the chemical sub sectors. technology discovery and research from each company. The first went hand in hand with a good January till November 2006, Organics and polymers show product developed as part of this collaboration is expected to be production performance. Phar- compared with the same period the highest increase of trade commercialised in the first half of the next decade. maceuticals is the only sector last year. Chemicals (excluding surplus with 18 %, comparing E www.basf.com to show decreasing producer pharmaceuticals) are growing January to September 2006 E www.monsanto.com prices, –1.7 %. Only at the very at 6.6 %, with a small slowdown to the same period last year.

[email protected] Page 18 ChemiC als CHEManager Europe 3/2007 ‘Knowledgeable, Focused And Entrepreneurial’ Azelis Is One of Europe’s Fastest-growing Distributors

E Continued Page 1 were being carried out through to replacing fixed assets that and the potential disruption to Azelis is active in five inter- a number of different Azelis Azelis Sales Trends they then have to use to make business. national business areas: food 2000 – 2005 U. Wenzel: In addition to the companies, especially Impex economic sense. Our model is and cosmetics; pharma and 900 obvious need to fit with our core Quimica, Kraemer & Martin, 846 generally to outsource “stand- What do you see as challenges veterinary; coatings, poly- market sectors of Life Sciences Sibeco and Azelis Italia. This 800 ard” operations whilst focusing for the European chemical dis- mers & additives and chemical 700 (human pharma, veterinary, accelerated our position and 700 on providing services to wrap tribution market? industries. In which area do you food and cosmetics), Coatings overcame some of the normal 600 knowledge around the products expect the most growth in the (paints, varnishes, inks, adhe- problems of establishing a new 500 476 that we sell. U. Wenzel: It is almost univer- coming years? Why? Which area sives), Polymers & Additives office that has critical mass. 400 377 In addition, we actively sally acknowledged that one of are you looking to push? (engineering plastics, rubber, After a successful integration, 309 develop the entrepreneurial the biggest challenges facing

Sales (  million) 300 composite materials and spe- the next challenge will be to character of our managers and the chemical industry – both U. Wenzel: Really, we are con- cialty additives) and Chemical move into the role of distribu- 200 encourage them to develop dif- distributors and manufactur- centrating on nine core areas 105 Industries (performance and tor into China, where business 100 ferent local services to meet ers – is the constant flow of new across Azelis; the ones men- industrial chemicals), the com- traditions and habits are quite 0 local needs. An illustration of regulations. Currently, the big- tioned are those where we 2000 2001 2002 2003 2004 2005 dissimilar compared with our the basic difference is that at gest one is clearly Reach. There already have a consolidated European markets. Azelis, more than 100 execu- European position. We expect Italy France PECO UK Germany tive managers and staff hold substantial growth in all of “For us, the key Benelux Spain Nordic You have said that Azelis is plan- around 35 % of the equity of these areas but would differ- Source: Azelis © GIT VERLAG “At Azelis, more to meeting the ning a direct presence in India. the company. We also operate a entiate the Life Science areas What can you tell us about this? flat organisation with only three than 100 executive from the others as having needs of global What other regions are you look- ferent requirements and cul- international growth of Aze- real levels and this, coupled higher and more stable growth, ing at internationally? tures of the local markets. We lis. This was for three reasons: with the high staff share own- managers and staff whereas the other areas can be suppliers is to strongly believe that a one size their international presence, ership, means that there can be subject to a number of cyclical U. Wenzel: We recognise that fits all approach does not meet their experience and knowl- very rapid decisions absolutely hold around 35 % macro-economic factors. Our be able to cover India is a rapidly growing the needs of suppliers – inde- edge of the chemical distribu- focused on what is in the best focus will be to persuade market for both sourcing and pendently of whether they are tion sector and the pragmatic interests of the group and its of the equity of the principals who currently sup- all the necessary selling chemicals. We are well global or local. and hands-on way to work suppliers and customers. ply Azelis in e.g. two or three advanced in our plans to estab- with their managing partners. company.” countries to appoint Azelis as European markets, lish a direct presence in India, Azelis moved from the private 3i is fully supportive of our It is expected that less than 10 their pan-European partner. and this will be done via an equity firm Cognetas to 3i at the development plans; our strate- distributors will cover 50 % of the Therefore, we will have more but doing so Azelis India that will be set up end of last year. What was the gic direction remains the same. distribution market in Europe is a real risk that only those organic growth in the consoli- to work in partnership with a strategic thinking behind this We will continue with our tar- by 2010. While this predic- manufacturers and distributors dated areas, and more strategic with a clear local selected local partner to help move? geted acquisition programme tion reflects Azelis’ strategy of will survive who have enough growth in the others. both source and sell specialty and further develop synergies growth through acquisition, do critical mass to manage the presence.” chemicals. These plans are U. Wenzel: When Cognetas for organic growth within the you foresee any potential prob- regulations. It is our belief that Your company’s turnover has expected to reach fruition this made its original investment in group. The existing manage- lems in the endless mergers and this is not necessarily good for grown from €348 million in 2001 year. Azelis in 2003, we had a pres- ment team remained in place acquisitions in the industry? the industry in general and, as to an estimated €950 in 2006. mon criteria for our acquisi- ence in Italy, France, Eastern and substantially increased its such, we offer our full support What will the coming five years tions are that the company is What is your company doing to Europe, the UK and Germany. investment in Azelis. U. Wenzel: One of the biggest to those organisations that are bring for Azelis? already specialty focused and adapt to accommodate increas- In the three years with Cognet- problems with mergers and trying to minimise the effects has a track record of profitable ingly global suppliers? as, we expanded our geographi- What edge do you have over the acquisitions is that, during this by cost- and information-shar- U. Wenzel: Working with 3i, we growth. In addition, it is impor- cal coverage to include the Ibe- big names in the business, such period, the management and ing. would anticipate that the turn- tant that the modus operandi of U. Wenzel: For us, the key to rian Peninsula, Benelux and as Univar or Brenntag? How are staff can lose sight of the needs over of Azelis would more than the company fits well with the meeting the needs of global the Nordic countries – includ- you able to compete and/or stay of principals and customers and How does Azelis offer support? double in this period to reach a established Azelis values of suppliers is to be able to cover ing Denmark, Sweden, Finland, competitive? focus on internal changes. One level of around €2 billion. We being knowledgeable, focused all the necessary European Norway, Iceland, Poland and of the explicit positions of Azelis U. Wenzel: Azelis is a found- would expect to have completed and entrepreneurial. markets, but doing so with a Latvia – and Greece. This was U. Wenzel: We believe that we is that while we make acquisi- er investor in ReFaC, the “by both our geographical and mar- clear local presence. Our mot- also accompanied by a number operate a different business tions, we ensure that resources the industry, for the industry” ket coverage to ensure a con- Azelis opened an office in Shang- to of “big enough to do the job, of strategic local bolt-on acqui- model and focus on adding val- are constantly focused on the Reach Facilitation Company sistent and substantial position hai in 2005. What do European small enough to care” sum- sitions to extend market cov- ue in a different way than. Uni- ongoing business and ensur- that has been set up in the in our key markets in all coun- distributors have to do to get marises our approach. We can erage. We had grown faster var or Brenntag. An analysis of ing that business continues as UK. The objective is to pro- tries in Europe. In addition, we a strong foothold in the Asian offer global suppliers a tailored than anticipated and so began the balance sheet of these com- usual. While we do go about vide assistance to European would expect to have further market? What challenges did package that can meet their a process of identifying a suit- modity-type distributors shows post-acquisition integration ac- distributors and SMEs all the developed our sourcing from you encounter there? needs of a single interface/ able partner to support us over that they have a very high com- tivities that include aligning. IT, way through the process from China and India and also to have single contract covering Europe the next five years which could ponent of fixed asset investment accounting and management assessing whether products established a substantial sales U. Wenzel: Azelis Shanghai but with the confidence that all lead to a possible flotation. and corresponding deprecia- information systems, we have are covered by Reach to the position in these countries. was the merger of our existing Azelis companies have a truly We identified 3i as the ideal tion. The net result is that a lot developed a way of doing this ultimate testing and registra- China sourcing activities that excellent knowledge of the dif- partner for the next phase of of their cash generation goes that minimises both the cost tion of products. E www.azelis.com A Lanxess Growth Story Turnaround after Successful Portfolio Adjustment

E Continued Page 1 that accommodates our custom- lion in the expansion of its Bit- dustry; manufacturing of sug- have to stand up to a rigorous water balance in many regions. we can act as a solution pro- ers’ latest requirements comes terfeld ion exchange resin pro- ars and starches; hydroponics- safety test and they have to be Also, new demands of agricul- vider for contaminated waste, competition across all regions; from our production excellence; duction facility by the end of fertilizer; decontamination of reliable. ture and rapid industrialisa- ground and surface water. It is we are the leading company for the unique setup of our facilities this year. The originally planned ground water, waste water and Further main application are increasing the overall also important to consider the technical advisory competence, and processes are setting new amount was €1.8 million. What surface water; mining industry; tions are the usage of ultra demand for water. However, awareness and sensitivity of the and this is also a unique selling industry standards. We have a factors led to so much more mon- and biodiesel, just to name a pure water for the microchips 40 % of the world’s population end user. They are really ask- point for us. series of products that are tailor ey being invested in the plant? few. It’s obvious that a company and pharmaceutical industry, does not have access to clean ing and driving the producers Innovation is also a differen- made to special solutions, e.g. has to be highly diversified in which are produced by IXR. water, and less than 1 % of the to provide clean water. There tiating element. The fact that providing unique solutions to M. Zobel: Innovation means order to be a full-portfolio pro- water on Earth is available for is pressure coming from those more than 20 % of our product solve environmental problems. if we are coming up with new vider and to satisfy the needs of human use. This all underlines who have to work with water, portfolio is made up of prod- Our R&D group is really focused products, we also have to con- the market. the fact that we have to apply and this is where we come into sider whether or not we can We see high growth poten- technologies to make the most play. These are all trends that tial in all three main segments, efficient use of this resource. we can really benefit from. with global demand size at Energy consumption is “Innovation comes about €700 million. Global another issue. It is growing in What about the development of water businesses account for the world, particularly when new areas? from listening to about 60 % of the total market, one looks at the growth in Chi- which illustrates the potential na and also other industrialised M. Zobel: We are constantly the market.” for growth. Also, consumers nations that are demanding looking after market trends and are becoming more and more market requests which is often aware of the problematic of the starting basis of new areas. do this in our plants or not. If water, such as purification and Ion exchange resins undergo practical “We have the Changing regulation world- we decide that it is possible, decontamination. testing in strict quality controls in the wide is a further source for the then we have to invest in that. laboratory. technological development of new areas. Bitterfeld is one of the world‘s largest production centres for ion exchange resins. This was the case in Bitterfeld; Almost 60 % of all ion exchange we are placing new products resins go to the water sector, Ion exchange resins play also and marketing What are Ion’s growth targets ucts younger than three years on the market needs and not there and therefore we need to thus they can play a vital role an important role as solutions and what is your strategy to shows that the market, cus- doing ivory tower work. expand. in contributing to the solution of provider for the decontamina- competence to achieve them? tomer requirements and legal the future water problems. What tion of ground water, waste requirements are continuously How do you see the market In which application sectors are are the main applications of ion water and surface water. grow above the M. Zobel: We have the techno- changing and that we are able environment of the global ion you expecting above-average exchange resins in the water logical and marketing compe- to successfully respond to these exchange resins businesses and growth and what are the growth sector? What other mega trends will market.” tence to grow above the market. changes. what role does Lanxess currently drivers? shape the future ion exchange We want to be and are already play within this market? M. Zobel: The main applica- resins market? a growth story. We would like Where does innovation in your M. Zobel: We classify our prod- tions of the Industrial Water more and more energy. In the to push our specialties more business come from? M. Zobel: The global ion ex- ucts into three main groups: Treatment segment are the M. Zobel: There are several end, this will mean more and and to be more active as a true change resins demand amounts Industrial Water Treatment; softening or demineralization trends we are participating in more power plants and nuclear solutions provider. In parallel M. Zobel: Innovation comes to about €700 million. Lanxess Consumer and Cartridge; of drinking and process water. and will benefit more from in power plants, which in turn will we want to secure long-term from listening to the market: It’s is one of the leading companies and Catalysis and Chemicals For example, demineralisation the future. One of those issues mean the need for the deminer- growth in the industrial water very important to get feedback here, not only from the technol- Processing. Each of these seg- of process water for petrochem- is water scarcity; the world’s alisation of water. treatment segment and in the from the customer. Our sales ogy side, but also from the glo- ments contains sub segments, ical industry, power plants and population is expected to grow consumer area. We are also force is our ears to the mar- bal set-up, the marketing and which are the true elements nuclear power plants plays an from six to eight billion by How is Lanxess participating in looking to even improve our ket. They feed this information technical advisory competen- of the market. These sub seg- important role. In nuclear pow- 2025. This growing popula- these trends? technical advisory competence into our business unit, which is cies. ments include industrial water er plants products are also used tion comes along with climate and to gain further strength in then assessed by our technical to soften or demineralise drink- in the secondary or primary changes and natural disasters M. Zobel: Obviously environ- Asia Pacific. experts. The foundation for an Lanxess announced that it is ing or process water; ultra-pure loop – these are sensitive ar- that push deserts into arid ar- mental issues arise from this ever-renewing product range planning to invest over €6 mil- water for chip and pharma in- eas which means the products eas and influence the ecological kind of growth. This is where E www.lanxess.com

[email protected] CHEManager Europe 3/2007 PeoP le · e vents · AwA rds Page 19

Linde Hydrogen Centre Awarded Chem Show: New Products, Ideas technology test centre, a train- The Chem Show, now in its 52nd ing centre and a presentation year, is North America’s largest platform. The Linde Hydrogen process equipment and tech- Centre was inaugurated in nology exposition. This year’s October 2006 in the presence of show – to take place 30 Octo- the German Federal Minister of ber–1 November in New York Transport, Wolfgang Tiefensee. City – will feature the latest The technology group The At the heart of the facility is a equipment, technologies, trends Linde Group has been given filling station, which supplies and materials for the chemical an award for its innovative hy- a test fleet of hydrogen fuelled process industries from lead- drogen centre in Lohhof near cars and buses with both liquid ing manufacturers worldwide. Munich by the federal initiative hydrogen and compressed gas- There will also be technical, Ashland: Mike Swartzlander to Head India Business Operations Mike Swartzlander has been named Germany: Land of Ideas. The eous hydrogen. management and operations vice president and managing director, India, for Ashland. Swartzlander previously served as vice Linde Hydrogen Centre com- conference that includes ses- president and general manager of Ashland’s Casting Solutions business. The company said that bines the functions of a hydro- E www.linde.com sions, management forums, although Ashland’s business interests have been represented in India for a number of years, gen filling station with that of a E www.land-of-ideas.org operations workshops, tutori- Swartzlander will be tasked with organising, aligning and growing the businesses as one Ashland als and short courses focusing enterprise. on industry trends, innovations world and attracts over 10,000 E www.ashland.com Sigma-Aldrich Receives Award and new developments in the chemical process industry pro- CPI. The show hosts about 600 fessional visitors. Abiomed Appoints GM for European Operations Abiomed has appointed Paul Krell Sigma-Aldrich has been named fine chemicals business unit exhibitors from around the E www.chemshow.com to the position of general manager for its European operations, based in Aachen, a recipient of Merck & Co. 2006 (SAFC) that met Merck‘s needs. Germany. Paul Krell joins Abiomed from ev3 Europe, where he most recently served Sector Operational Award. Sig- To date, utilisation of this serv- as VP Europe, in the Neurovascular Division. He has more than 14 years of experi- ma-Aldrich was chosen for its ice has increased by 50 %. As CM Europe Welcomes Editor ence in the medical device industry, with a strong cardiac background built during outstanding sourcing services, a Merck preferred supplier, his tenure at Guidant, where Mr. Krell held several management positions, including helping Merck realise proc- Sigma-Aldrich has also been Dr. Roy T. Fox, our German- Country Manager in Germany for Cardiac Surgery Products and European Market- ess efficiencies as well as sig- utilised for critical pre-clinical American globetrotter, has been Paul Krell ing Manager for Tachyarrhythmia Products. nificant savings. In early 2006, and clinical drug deliveries as a regular fixture here at GIT E www.abiomed.com Sigma-Aldrich was selected to well as associated analytical Verlag for the past four years. provide a comprehensive suite testing services. As editor-in-chief of KunstStoff Honeywell: New VP, GM for Fluorine Products Honeywell has appointed Terrence of organic raw materials and E www.sigmaaldrich.com Trends, Dr. Fox is our in-house Hahn as vice president and general manager for its fluorine products business. Prior sourcing services through its E www.merck.com expert when it comes to plastics to joining Honeywell, Hahn spent nearly 20 years with Air Products and Chemicals. and the plastics processing in- He most recently served as senior director for the company‘s global electronic dustry. Now he will be passing specialty materials business, where he was responsible for overall performance. along his knowledge to interna- In this position, he transformed the business and moved its headquarters to Asia ChemOutsourcing Conference tional readers as assistant edi- while significantly increasing sales in the region. Hahn built a team that served The annual show – 10 – 11 Sep- ference sessions cover pre-clini- tor of CHEManager Europe. Terrence Hahn customers worldwide and was commercially accountable for the technology, sup- tember in New Brunswick, New cal and development sourcing A Hessian by choice, Dr. Fox ply chain, procurement, engineering, finance and quality functions. He was based Jersey (U.S.) – is widely attend- topics, all the geo-regions, and decided to stay in sunny Darm- in Taipei, Taiwan. ed by large, mid-sized, small the ever-evolving CRO-pharma stadt after he completed his E www.honeywell.com pharmaceutical/biotech com- relationships. ChemOutsourcing degree and doctorate in chem- up Italian delicacies or enjoy- pany sourcing managers, R&D is information and networking istry and chemical engineering. ing a plate of all-you-can-eat Laureate Pharma Elects New Chairman Laureate Pharma announced the election personnel and a large array intensive with a large exposition Whenever he’s not working spareribs with his beloved col- of Tracy Ken Tsuetaki as Laureate’s new non-executive chairman of its board of of chemistry service providers attracting the finest suppliers. hard at his desk, you’ll find him leagues. directors. Currently, Tsuetaki is president of medical communications and consult- from around the world. The con- E www.chemoutsourcing.com playing badminton, whipping E www.chemanager-europe.com ing at Quintiles Transnational, where he is responsible for their global consulting and medical education groups. E www.laureate.com

Tracy Ken Tsuetaki Apply today for your Change in Tecan’s Board of Directors Timothy B. Anderson, a long term member of Tecan’s board of directors, will not run for another term of office at the annual general meeting of the shareholders on 19 April. The board has proposed the Biopharma specialist Jürg Meier for the vacant seat. free* subscription Meier has successfully headed the Novartis Venture Fund for more than six years. Among other things, he was the global head of research of the former Sandoz. Please photocopy the form, complete all sections and fax it back E www.tecan.com Fax back on +49 6151 8090 168 Santhera Proposes Klaus Schollmeier to Board Santhera Pharmaceuticals announced that its board of directors will propose the appointment of Dr. Klaus Schollmeier, the company’s CEO, to the board. This appointment would be for a term of three years. Please answer all sections by filling in the boxes Schollmeier’s appointment to the soard is subject to the approval at the shareholder 1. What is your company´s primary business? 2. What is your job function meeting on 23 April. (fill in one only) (fill in one only) E www.santhera.com Chemicals and Petrochemicals Managing Director/CEO/President Engineering Manager Klaus Schollmeier Life Sciences (Pharma, Biotech, Agro) Head of Plant Operations Head of Production Plant Construction/Engineering Sales & Marketing Manager R&D Manager Borealis Appoints New CFO Borealis has appointed Dan Shook as chief financial officer and mem- Plastics IT-Manager Purchasing Manager ber of the executive board, effective 1 June. He succeeds Clive Watson, who left the company in September 2006. Consulting Logistics Manager Head of QC Shook comes from the BOC Group. During his twelve years at BOC, he held several senior Food & Beverage Commercial Director Other (please specify) management positions, including group treasurer and divisional global business manager, before becoming finance director for Industrial & Special Products, the company’s largest and most prof- Site Management itable division, in 2005. Dan joins the executive board of Borealis along with the newly appointed Other (please specify) designate CEO, Mark Garrett. E www.borealisgroup.com 3. How many people are employed in your facility? 4. Do you recommend, specify or authorise the purchase of services, Lanxess: Board Changes Dr. Rainier van Roessel has been appointed as the com- equipment and supplies? pany’s new labour relations director and will assume all the responsibilities held Fewer than 20 20–100 by Dr. Martin Wienkenhöver, who left Lanxess on March 31 to assume new duties 101–500 501–1,000 Yes elsewhere in the industry. However, he will remain associated with Lanxess in an No advisory capacity. 1,001–5,000 5,000+ The supervisory board of Lanxess has appointed Dr. Werner Breuers to the company’s board of management effective 15 May. Breuers, who holds a doctor- 5. Do you plan to purchase or invest in any of the following in the future? Rainier ate in chemistry, is joining Lanxess from Dutch chemicals group Basell. With this (fill in all that apply) van Roessel appointment, the allocation of responsibilities within the board of management of Lanxess will be finalised effective the same date. Raw Materials Processing/Manufacturing Equipment E www.lanxess.com Engineering Services New Foreign Production Sites

Dow: New Senior Leadership Structure The Dow Chemical Company has announced a new cor- Logistics IT Services/Equipment porate and business leadership structure, which the company said is focused on accelerating the Packaging Process Automation and Control implementation of Dow’s transformational growth strategy. The senior level realignment includes Other (please specify) the formation of a five person Executive Leadership Committee that will concentrate on defining the company’s strategic direction, prioritising its investment agenda, establishing enterprise-wide policy and setting financial plans and performance metrics. In addition to Dow Chairman and CEO Please sign below if you wish to receive CHEManager Europe for free* Andrew Liveris, the committee comprises: * free to qualifying readers in Europe  Geoffery Merszei, executive vice president and chief financial officer Signature Date  Romeo Kreinberg, executive vice president, performance businesses  Heinz Haller, senior vice president, strategic development and new ventures Print your name and address  Mike Gambrell, executive vice president, basics businesses Mr/Mrs/Ms First Name Family Name Liveris has also redefined its global business portfolio, structuring it around eight distinct groups GIT VERLAG GmbH & Co. KG Job Title – each of which will be led by a business president. Six of these groupings are new, while two are Roesslerstr. 90 already in place. Company 64293 Darmstadt, Germany E www.dow.com Tel.: +49 6151/8090-0 Address Fax: +49 6151/8090-168 [email protected] Avery Dennison Appoints Fasson Roll Technical Director Avery Dennison has pro- Postcode City Country www.gitverlag.com moted Lisa Hubbard to the post of technical director, Roll Materials Europe. In this new role, she leads the European product technology and innovation team, which Tel. 00 Intl. dialing code Number (0) develops adhesives, release systems, face materials, and top coatings to provide Fax 00 Intl. dialing code Number (0) high-performance Fasson-brand product solutions for customers. E www.averydennison.com Email

Lisa Hubbard

[email protected] Page 20 AT A GLANCE CHEManager Europe 3/2007

EU Chemical Industry Progress Toward Artificial Photosynthesis? Plants can do it: they sim- called graphitic carbon Sales structure by destination Demand structure by origins Sales 2005*: 436 billion Apparent consumption 2005** ply grab carbon dioxide nitride, is very heat-sta- out of the air and covert ble and, although it enters Percentage shares of sales Percentage shares of apparent consumption it into biomass. In this into many chemical inter- process, known as pho- actions, it is so stable that tosynthesis, the plants it nearly always re-forms Domestic sales Domestic sales Intra-EU imports 25 % 28 % use light as their energy – an ideal catalyst. It can source. Chemists would even be used to activate 50 % 54 % also like to be able to use carbon dioxide. It was

CO2 as a carbon source thus possible to oxidize 25 % 18 % for their synthetic reac- benzene (an aromatic six- tions, but it doesn’t work membered carbon ring) to Extra-EU exports Intra-EU-exports Extra-EU imports just like that. A team phenol (which has an ad- headed by Markus An- ditional OH group). The tonietti at the Max Planck by-product of the reaction * Excluding pharmaceuticals ** Sales and imports-exports Institute for Colloids and is carbon monoxide (CO), Source: Cefic © GIT VERLAG Interfaces has now taken which can be used directly an important step toward for chemical syntheses. Around one quarter of chemicals sales are exported outside of the other West, Central and Eastern European countries. More than this goal. As described in From a purely formal EU area. North America, other European countries (not belonging half of the European demand for chemical products is satisfied the journal Angewandte point of view, this reaction to the European Union) and Asia are the key markets. EU chemi- by intra-EU imports. By 2005, almost half of sales were intra-EU Chemie, they have suc- cleaves the CO2 into an cals demand (apparent consumption) in 2005 was estimated at (excluding domestic sales). While intra-EU sales are rising, the im- cessfully activated CO2 oxygen diradical and CO. €398 billion (excluding pharmaceuticals), 18 % of which originated portance of domestic sales in decreasing. The traditional domestic for use in a chemical re- However, like photosyn- from outside the region – mainly from North America, Asia and preference is becoming a preference for European products. action by using a special thesis, the reaction seems new type of metal-free catalyst: worked with metal-free cata- to occur by way of carbamates:

graphitic carbon nitride. lysts, turning toward plants for In the first step, CO2 binds to “Chemical activation of car- inspiration. Photosynthesis in individual free amino groups Top Chemical Companies EU* Chemical Consumption bon dioxide, meaning its cleav- modern green plants involves present in the carbon nitride. age in a chemical reaction,” an important intermediate step: It then oxidizes the benzene to

2005 Chemical domestic consumption in % explain chemists Goettmann, the bonding of CO2 to nitrogen phenol, and in the end the high- 010,000 20,000 30,000 40,000 50,000 Thomas and Antonietti, “is one atoms to form carbamates. The ly desirable CO separates from Textile & Clothing Construction BASF of the biggest challenges in syn- German researchers thus also the catalyst. “This could make Electrical goods Dow Chemical Agriculture Automotive thetic chemistry.” The bonds in experimented with nitrogen- novel, previously unknown Shell Office machines Paper & printing this molecule are very stable, so rich catalysts with structures chemistry of CO2 accessible,” Bayer 0.7 % 6.3 % 5.4 % products 6.4 % 5.3 % a lot of energy is needed to split that allow them to form car- hopes Antonietti. “It may even ExxonMobil 3.9 % 4.5 %

S-$ Industrial DuPont machinery them. To date, only a few spe- bamates. Their new class of be the first step in artificial pho- Total 1.9% cial metal catalysts are known catalysts is made of flat, graph- tosynthesis.” INEOS Metal 16.4 % 30.3 % to be capable of breaking the ite-like layers. The individual Sinopec products Original publication: Markus Antonietti Sabiac 2.5 % 6.1% C-O bonds in CO2. layers consist of ring systems et al.; „Metal-Free Activation of CO2 by Mes- Sales in million U Mitsubishi Chemicals 10.3 % In contrast to most previous involving carbon and nitrogen oporous Graphitic Carbon Nitride“; Ange- Lyondell Chemical Services wandte Chemie International Edition 2007, Akzo Nobel approaches, Antonietti’s team atoms. This porous material, 46, No. 15. Consumer products Degussa Rest of manufacturing Sumitoma Chemical Rest of Industry

EU 25 USA Japan Other * EU 15

In 2005, almost half of the 30 world chemicals majors had their The chemical industry underpins virtually all sectors of the  Insights on the legal implications of Reach headquarters in the EU, representing approximately 15 % of economy: about 30 % of consumption is absorbed by consumer  Reach data sharing and consortia building world chemical sales. These 30 companies had a combined sales products, 16.4 % goes to services, 6.4 % to agriculture, 5.4 % to turnover of €463 billion. This is a significant increase compared construction, 6.1 % to the rest of manufacturing and 10.3 % to the  Technology Transfer: Doing Business in China to the previous year and reflects not only the positive sales de- rest of industry. The big industrial customers of chemicals are  Europe’s first intellectual property auction velopment in 2005, but also the ongoing consolidation in the the metals, mechanical & electrical industries, textiles & cloth- chemicals sector. ing, the automotive industry and paper & printing products. Hitting your mailbox on 27 April!

Corporation Football INDEX

FC Barcelona Sales Top-selling European Football Clubs Abiomed 19 Eksigent Technologies 6 Lanxess 1, 6, 11, 19, 18 in million  in million , 2005/06 season 259.1 Air Liquide 4, 6 Eli Lilly and Company 4 Laureate Pharma 19

Air Products 14 Endress + Hauser Messtechnik 11 Linde 5, 19 Real Madrid 292.2 207.9 88.4 Lonza 2, 10 FC Barcelona 259.1 Aker Kvaerner 6 European Chemical Regions Network 15 Lurgi 5 169.2 62.8 Juventus Turin 251.2 Akzo Nobel 4 European Petrochemical Association 15 Marlin Energy LLC 5 Manchester United 242.6 45.3 Albemarle 15 Evotec 10 123.4 94.1 AC Mailand 238.7 MDL Information Systems 2 Alfred Talke 17 Exxon Mobil 14, 15 39.0 79.0 Mitsui Chemicals 15, 16 66.1 FC Chelsea, London 221.0 American Chemistry Council 1, 3 FMC 17 Inter Mailand 206.6 Movianto 15 42.6 76.6 Bayern München 204.7 Amgen 10 Frost & Sullivan 12 MPI f. Kolloid- und 57.8 66.1 41.8 FC Arsenal, London 192.4 Arkema 11 Gempex 20 Grenzflächenforschung 20 FC Liverpool 176.0 2002/2003 2003/2004 2004/2005 2005/2006 Ashland 19 Grant Thornton LLP 5 Nova Chemicals 1

Ticket sales Broadcast rights Advertising revenue Astellas Pharma 10 GVK Biosciences 1 Oxea 17

Paul Craemer 7 Source: Der Spiegel/Deloitte © GIT VERLAG Avantium Technologies 10 H+A International 19 Pepperl + Fuchs 14 Avery Dennison 19 Hamilton 6 Football in Europe has long since become a lucrative business ven- enue. However, FC Barcelona is not alone in its profitability. The Perbio Science Belgium 9 ture, and the FC Barcelona is a prime example of a club that has total revenue of the top 20 clubs was over €3.3 billion in 2005/06. BASF 1, 12, 16, 17 Helsinn Chemicals 9 Port of Rotterdam 15 best set this ideology into practice. The club has practically doubled Dan Jones, partner in the Sports Business Group at Deloitte, said BASF Coatings 4 Hercules Offshore 5 its sales since the 2002 – 03 season though ticket sales, broadcast- “Football remains a growth sport, especially at the highest level. Pro2Tec LLC 8 Bayer BTS-BM 2, 5 Hess 12 ing rights and advertising revenue. The club is only second to Real The continued high level of public and commercial interest is re- Ranbaxy Laboratories 10 Madrid in Europe in terms of sales for the 2005 – 06 season. This flected by another year of strong growth. The global market has Bayer Industry Services 15 Hexion Specialty Chemicals 4 Reach Facilitation Company 1, 18 season, the club is expected to rake in over €300 million in rev- become increasingly important for more European clubs.” Beiersdorf 6 Hillesheim 6 Reichhold 1

Biocons 1 Honeywell 19 Rhodia Europe 4, 5

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