Business roundup: October 2005

Chemical industry: life after Katrina  

The 26 member countries of the International Energy Agency (IEA) together with the EU have agreed to offer an additional 60 million barrels of oil and fuel to the market over 30 days following the devastation and disruption to oil supply wreaked by Hurricane Katrina along the Gulf Coast on 29 August. 

Member countries - which include the US, Germany and Japan - have committed a total initial response of 2.1 million barrels a day. North America is offering the biggest contribution of total response (52 per cent), followed by Europe (30 per cent) and the Pacific region (18 per cent). 

The IEA was founded during the oil crisis of 1973-74, and its initial role was to coordinate measures in times of oil supply emergencies. This is only the second coordinated release of IEA stocks in the history of the agency, which these days focuses on broader energy issues, such as climate change policies and market reform. The IEA’s governing board was due to convene to assess the oil market and review the impact of this latest action as this issue went to press. 

Petrochemical company Chevron said in a statement released one week after the hurricane that it had returned to 45 per cent of its pre-Katrina production level. Among other oil refineries hit, Shell has said that, pending full assessment and evaluation of infrastructure and assets, it expects that about 60 per cent of total production will be restored to pre-hurricane levels within the fourth quarter 2005.  

The storm forced most chemical plants in southern Louisiana, Mississippi, and Alabama to close. Chemical companies affected include, among many others, Degussa’s site in Mobile, Alabama, five of DuPont’s sites in Mississippi, Louisiana and Alabama, and two Dow Chemical sites in Louisiana. 

The council of the American Chemical Society, which has had to suspend delivery of its journals to areas affected by the hurricane, has passed a resolution expressing its concern over the death and devastation caused. The society’s board of directors is collecting information on specific needs that can be addressed uniquely by the ACS, using its core competencies and network of 159 000 chemists and chemical engineers. Suggestions can be sent to ACS president William Carroll at president@acs.org. 

Mixed report for Ciba  

Ciba Specialty Chemicals has appointed Brendan Cummins to the newly created role of chief operating officer. Cummins was previously head of the company’s plastic additives segment. The new role reflects the decision of the board of directors to adapt the structure of the executive committee. ’This move strengthens the leadership of the company and makes us more agile,’ said Armin Meyer, chairman of the board and chief executive officer. ’It allows me to concentrate even more on the important strategic development and long-term direction of the company, while the new chief operating officer will primarily focus on operational management.’ 

The announcement was made as Ciba announced half year results, which the company says reflect business conditions. The development of the business overall was mixed, with good growth in Asia, especially China and India, as well as in South America, but not in Europe and North America. Demand in some customer industries, notably personal care and packaging, was strong; while in others, like the automotive industry, demand was lower than the first half of 2004. 

GSK homes in on flu vaccines  

GlaxoSmithKline (GSK) is acquiring a vaccine research and production facility in Marietta, Pennsylvania, adding to the company’s growing vaccines presence in the US. The news follows GSK’s recent purchase of Corixa, a developer of innovative vaccine adjuvants that increase immune response. ’We expect to develop new flu vaccine technology at our Marietta facility that we hope will enhance our future ability to rapidly produce flu vaccines for the nation in response to a pandemic,’ said chief executive officer JP Garnier. ’This new technology will complement our current egg-based flu vaccine manufacturing.’  

GSK has also announced an agreement to buy ID Biomedical, a biotech firm with plants in Canada and the US. ID Biomedical is involved in the manufacture and development of innovative vaccine products, including flu vaccines. 

BOC to support biodiesel producer  

BOC has signed a 10-year agreement with Biofuels, the largest commercial biodiesel producer in the UK, to supply nitrogen and compressed air for the production of the environmentally conscious fuel. BOC is contracted to supply up to 26 tonnes of gaseous nitrogen a day to Biofuels from the BOC plant at Teesport.  

When fully commissioned the Biofuels site at Seal Sands is expected to produce at least 250 000 tonnes of biodiesel a year, equivalent to 284 million litres, using renewable vegetable oil crops as a feedstock.  

Global proficiency monitoring  

LGC, Europe’s leading independent analytical laboratory, is to form a joint venture focusing on proficiency testing (PT) with Quality Management (QM), and Aquacheck, independent proficiency testing scheme providers. The combined operation will encompass over 4000 laboratories worldwide.  

QM provides PT schemes in microbiology and chemistry for the meat, dairy, food, and environmental industries. Aquacheck provides the market-leading PT scheme for the water and environmental testing markets.  

LGC manages several PT schemes, covering a varied industry base including brewing, distilling, food, environment, forensic and consumer safety. PT schemes enable laboratories to monitor and improve analytical measurements by providing an external quality assessment system to complement their own internal quality control processes.  

Biodefence vaccines  

The United States Army Medical Research Institute of Infectious Diseases (USAMRIID) has entered into an agreement with Cyto Pulse Sciences, Glen Burnie, US, to cooperate on research and development of Marburg virus DNA vaccines. 

Marburg haemorrhagic fever is a rare but severe fever that affects humans and non-human primates. Marburg is on the US Category A list for biodefence threats. The virus was first recognised when outbreaks occurred simultaneously in laboratories in Marburg and Frankfurt, Germany, and Belgrade, Yugoslavia. The four species of Ebola virus are the only other known members of the Filovirus family. Recently, there was a large outbreak of Marburg in Angola. As of 5 June, 399 people were infected by the Marburg virus and 355 of those died. 

Rockefeller to commercialise GAS works  

BioVeris has entered into a license agreement with the Rockefeller University, New York, US, under which the company receives an exclusive, worldwide licence of patents and knowledge to manufacture, use and commercialise a vaccine candidate for Group A Streptococcal (GAS) disease. 

BioVeris paid an initial $150 000 (£82 000) licence issue fee and might have to make additional future payments for licence maintenance and patent costs, and to pay certain milestone fees for initiating and completing human clinical trials and receiving regulatory approvals. The company is also required to pay royalties on the sales of products covered by the agreement. 

GAS, also known as Streptococcus pyogenes, causes a range of diseases from mild to severe, in both children and adults. Most infections are mild or non-invasive, accounting for more than 10 million cases annually in the US, and primarily include strep throat (pharyngitis) and impetigo (skin infection). Industry analysts have estimated that the potential market for an effective GAS vaccine could exceed $1bn annually. 

Non-invasive cancer detection on trial  

A real-time, non-invasive cancer detection technique based on a spectroscopy system from optical sensing specialist Ocean Optics is in clinical trials. The CancerScanner technology uses an Ocean Optics system consisting of light source, probe and spectrometer to detect in vivo alterations of cells from normal to pre-cancerous and cancerous conditions. 

The technology, developed by the bioscience division of the US department of energy, has been licensed to, and further developed by, SpectraPath Technologies.  

It is hoped that the system will allow physicians to screen patients quickly, providing instant diagnoses, without requiring invasive and time-consuming biopsies for skin, cervical, brain, oesophageal and colorectal cancers.  

Rhodia crying wolf?  

Analysts have accused French chemicals company Rhodia of using natural disasters as an excuse to conceal wider problems, according to a report in the Financial Times. 

The company’s sulfuric acid plant in Baton Rouge, Louisiana, was not directly hit by Hurricane Katrina. But Rhodia said the storm disrupted its supply chain and reduced demand from oil refineries, its main customers. 

Heavy rains that flooded much of Switzerland caused severe damage to Rhodia’s nylon plant in Emmenbrücke, said a company spokesperson. 

The company, undergoing a drastic restructuring designed to return it to profit next year, was the first European industrial group to issue a profits warning about Katrina.  

Degussa to sell food operations  

German chemicals company Degussa is to sell its food ingredients operations to US agribusiness firm Cargill for €540 million (£364 million). The sale rests on the approval of the Degussa supervisory board and relevant regulatory authorities.  

’Food ingredients are a strategically ideal fit for a strong global food industry player such as Cargill. We feel that we have placed these operations in good hands, and are very satisfied with the transaction as a whole,’ said Degussa management board chairman Utz-Hellmuth Felcht. 

The agreement marks a significant step in Cargill’s strategy to become a leading provider of speciality ingredients and ingredient systems, says Cargill’s chairman and chief executive officer Warren Staley. ’It supports our strategy of becoming the recognised global leader in providing food and beverage companies with innovative solutions that help them succeed,’ he said.