Fine-chemical companies

Eor this example the cost of the battery limits plant is about four times the purchase cost of the equipment. This number is about two for module I-type plants designed and iastalled by the fine chemicals company itself, and about six for expanded module IV-type plants designed and built by contractors. 

Optimum capacity utilization ia the two dimensions of time and equipment are cmcial to the overall performance, and miming a fine chemicals company has been described as gap management. Attempts have been made to develop adequate equations for describiag the correlation between... 

Quality Control. Because fine chemicals are sold according to specifications, adherence to constant and strict specifications, at risk because of the batchwise production and the use of the same equipment for different products ia multipurpose plants, is a necessity for fine chemical companies. For the majority of the fine chemicals, the degree of attention devoted to quahty control (qv) is not at the discretion of the iadividual company. This is particularly the case for fine chemicals used as active iagredients ia dmgs and foodstuffs (see Fine chemicals, standards). Standards for dmgs are pubHshed ia the United States Pharmacopeia (USP) ia the United States (6) and the European Pharmacopeia ia Europe (7). 

Fine chemical companies are generally either small and privately held or divisions of larger companies, such as Eastman Fine Chemicals (United States) and Lonza (Switzerland). Examples of large public fife science companies, which market fine chemicals as a subsidiary activity to their production for captive use, are Hoffmann-La Roche, Sandoz, and Boehringer Ingelheim, which produce and market bulk vitamins and liquid crystal intermediates, dyestuff intermediates, and bulk active ingredients, respectively. Table 3 fists some representative companies having an important fine chemical business. 

As markets for enantiopure drugs continue to develop, the pharmaceutical industry, fine chemical companies, and academic chemists are prospecting for new enan-tioselective technologies to produce them. 

The interests of SMB for performing large-scale separations of enantiopure drugs has been recognized (very short development time, extremely high probability of success, and attractive purification cost) [68]. Several pharmaceutical and fine chemical companies have already developed SMB processes. However, because of strong confidentiality constraints, public information is limited, and some of the major announcements are summarized below ... 

Fine-chemical companies have definitely shown interest in micro-reaction technology (see also the commitment in [137]) and have formed their own task forces for this purpose. The increasing number of patents is further proof of the beginning commercial use of micro reactors (see, e.g., [318-321]). 

The organic chemists in academia stiU stick to their flask glassware. Here, certainly, some time is needed and education has to be provided. Micro-chemical engineering, as the name indicates, stiU remains a domain of the engineering society. Nonetheless, the fine-chemical companies have accepted micro reactors the push wiU come from the industry side. 

Economic evaluations are usually carried out by a specialists group within a company, although in a small fine chemicals company the economic analysis often is the task of the chemical engineer. 

Fine chemicals are produced either in-house by pharmaceutical or other specialty chemical companies for their captive needs, or as sales products by fine-chemical companies. The latter account for about one-third of the total production value of 75 billion, and obviously for the totality of the trading volume (see Table 9.2). In business transactions, custom manufacturing (CM) prevails over straight trading of standard products. 

Fine-chemical companies vary substantially in size. The largest ones have sales of more than 500 million the smallest ones, a few million per year (see Table 2.1). The leading companies are typically divisions of large, diversified chemical companies. The majority are located in Europe, particularly along the axis Amsterdam (The Netherlands)/Basel (Switzerland)/Florence (Italy) and in the United Kingdom. 

In terms of size, resources, and complexity of the chemical process technologies mastered, the fine-chemical companies can be broadly divided into three categories ... 

Table 2.2 Acquisitions by Major Fine-Chemical Companies...

In contrast to midsize and small fine-chemical companies, the large ones are characterized by... 

A list of the major fine-chemical companies and their sales development from 2002 to 2004 is shown in Table 2.3. A ranking of the 12 companies according to the size of their fine-chemical business is not possible because each of them has a different definition of the term fine chemicals. ... 

Thus, the impressive size of BASF s Fine Chemical Division is due to a BASF-specific definition of the term fine chemicals. In fact, the division, which is part of the business segment Agricultural Products Nutrition produces large volume aroma chemicals (a.o. 40,000 metric tons/year of citral) and vitamins (A, B2, C and E), as well as several lines of specialty chemicals (a.o. excipients and personal care products). Fine chemicals as defined in Section 1.1 account for about 150 million ( 190 million) in 2006, after full consolidation of the Swiss Fine Chemical company Orgamol, acquired in 2005. BASF holds a leading position in ibuprofen (made in USA), coffein and pseudoephedrin (made in Germany). BASF forecasts a further increase to 500 million ( 625 million) within 10 years which should make it the third largest fine-chemical company. 

Table 2.3 Leading Fine Chemical Companies (Resp. Divisions), Development of Sales 2002-2005...

Actually, the large fine-chemical companies consider the preparation of samples more as a marketing tool (and expense. ..) rather than a profit contributor. In order to avoid some of the pitfalls, it is advisable to manage the CRO business as a separate unit. Also, the location (venue) should preferably be separate to ensure that there is greater accountability and ability for it to operate as a standalone business. The location should be determined by availability of talent, proximity of universities, and accessibility. Also the... 

The probability of success, for instance, depends on a number of factors. On the technical side it is the likeliness that the laboratory results in terms of yield, throughput, and quality can be matched on the industrial scale within the planned timeframe. On the business side, it is the likeliness of realizing the forecasted sales and profit figures. A twofold risk is encountered here. On one hand, the fine-chemical company... 

An indicative cost structure for a fine-chemical company is given in Table 7.3. The operating schedule also has a significant impact on the production costs. Whereas continuous plants typically run 24 h per day, there is more... 

Table 7.3 Indicative Cost Structure of a Fine-Chemical Company...

When the attractiveness of new products is evaluated, either for submitting an offer or for inclusion in the R D program, manufacturing costs have to be estimated on the basis of a laboratory synthesis procedure. This is best done by breaking down the process into unit operations, the standard costs of which have been determined previously. Care has to be taken to estimate the time required for each step of a process. Thus a liquid-liquid extraction can take more time than the chemical reaction. The capability of a fine-chemical company to make dependable manufacturing cost forecasts is a distinct competitive advantage. 

The line-chemical industry embodies a complex combination of physical assets, technologies, know-how and intellectual property (IP) that are geared to commercial process development and manufacturing. As opposed to process IP, there is in general little or no product IP owned by a fine-chemical company. Since the mid-1990s the marketplace has become much more competitive with a proliferation of independent players and the emerging strength from low-cost economies (see Chapter 14). 

Benchmark data collected in a study of a representative number of European and US Fine Chemical companies over the 1998 to 2003 period are listed in Table 8.1. 

The average return on net operating assets (RONOA) of the sample was 9%. The last two figures exemplify the capital intensity of custom manufacturing (CM)-biased fine-chemical companies. In order to achieve a good return of capital employed, a healthy margin is mandatory. A more standard... 

For smaller fine-chemical companies, a subdivision of manufacturing is not advisable. In this case the business units are limited to R D and Marketing. 

Table 10.1 Fine-Chemical Company Growth Expectations...

A comparison of the sales development of selected Indian versus European fine-chemical companies is shown in Figure 10.1. 

Figure 10.1 Sales development of Indian and European fine-chemical companies.

Divi s Laboratories, India, established in 1990, is an example of a company that has installed a very impressive production capacity. At its two sites in Hyderabad and Vishakhapatnam (in Andhra Pradesh), the company has put onstream multipurpose GMP fine-chemical plants with a total reactor volume of 2000 m, far more than any large European fine-chemical company. However their sales of 87 million (2005) translate in a very modest turnover of 43,000 per m of reactor volume. 

The new production capacity that has come onstream in Asia since the mid-1990s has allowed the fine-chemical companies in these countries to capture a close to 50% share of the global merchant market for API-for-generics, the only segment of the industry where demand has developed favorably lately (see text below). The pharmaceutical industry itself, plagued by underutilized capacity, has gone more aggressively after third-party business. 

The dichotomy in the development of offer and demand also has a direct impact on the development of the fine-chemical industry in a global context. Whereas Western companies have suffered from the reduced demand for custom manufacturing services, Asian companies have benefited from the generics boom. The opposite turnover development of selected Indian and European fine-chemical companies is depicted in Figure 10.1. 

Position in the Drug Lifecycle. A drug s position in the lifecycle impacts distinctly the interface with a fine-chemical company. The consequences for the selection of target products are discussed in detail in Section 12.2. 

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