Strength in diversity

It has been a remarkable turn-around since the early 2000s, when the ‘life sciences’ concept was just going out of fashion, everyone in the fine chemicals contract manufacturing sector seemed to be pursuing the pot of gold at the end of the pharma rainbow and agrochemicals were seen as a niche that might be in permanent decline thanks to the advent of GM technology

Now, with high prices for commodity crops like wheat, maize and soya, increasing demand for food from a world population expected to top 9 billion with 2050 and many other indicators pointing in the same direction, crop protection is becoming a lucrative market for those who have stayed the course. This was the near-unanimous verdict of exhibitors at Chemspec Europe 2012 in Barcelona last month.

“Business is very good, most probably because agro is booming. Syngenta in particular is making people happy here,” said Dr Andreas Veit, head of the custom manufacturing and new business development business unit at CABB. This growth, he added, was coming from both existing products and new projects.

Even though it could live well of agro, CABB is also seeking growth in other, non-life science fields to manage the ups and downs inherent in agro. “It’s good to be diversified,” Veit said. The firm has now fully integrated the former KemFine site in Kokkola, Finland, into its custom manufacturing network.

WeylChem has also been busy integrating its businesses. Business development director Dr Andrea Missio said that it is in the final stages of consolidating the various operations acquired by ICIG and beefing up the visibility of its international operation, WeylChem International. Being at Chemspec Europe was an important part of this, he noted.

“Agro is extremely important for us,” Missio said. “The agro companies still want to be here as visitors and it is also good to have our competitors on the show floor to talk to. We don’t buy a lot from each other but it is a useful occasion to discuss the state of the industry.”

Much of the interest was coming from outside of the life sciences and markets with shorter cycle times than pharma and agro are clearly of interest. In general, WeylChem has had a strong year, particularly in agro. “Volumes are growing, there is clearly space for all of us and no one group is dominant.”

François Baduel and David Simmonet, EVP of sales and marketing and CEO respectively at France’s Axyntis Group, agreed that business is currently “very, very good, especially for agro and speciality chemicals”, though there is still a fair amount of pharma business too. There has been a major recovery since the difficult years of 2009-10.

“I always said, even in the worst periods, that we would deliver the business and it had just been slow to develop,” said Baduel. Axyntis resisted the urge to cut down on its reserves of manpower and capabilities during the rough years, with its private equity owner supporting it in taking the long-term view, and he now feels that this strategy has been vindicated as projects are coming in.

Driven essentially by strong demand in agro – though pharma and fine chemicals are also doing well – the UK’s Pentagon Chemicals has enjoyed a record year at its Workington facility. The site, which tends to operate to shorter timelines than the company’s other site at Halebank, was almost fully committed for 2012 with very little space capacity at the time of Chemspec Europe and is already taking orders to 2013.

“Most of the new enquiries are related to agro or biofuels, which the Workington site is strong in, said business manager Susan Brench. “We are also seeing a lot of enquiries about phosgenation. There have been a couple of good examples recently.”

Saltigo was at the show to “demonstrate its expertise as a premium provider in the field of custom synthesis for the agrochemical and pharmaceutical markets and for fine chemicals”. Immediately beforehand, indeed, it had received the Global Sourcing Award of Recognition for Partnership at the annual Syngenta Supplier Conference

Saltigo is satisfied with business levels so far this year and expects to reach its 5% growth target for the year, if business in the southern hemisphere develops as expected in 2H. “We see the basic trends as growing and are relatively optimistic for 2013,” CEO Wolfgang Schmitz said. The company sees particularly good prospects in Asia and South America and is positioning itself accordingly.

Multi-customer products – including raw materials and intermediates for polymer finishing, flavours and fragrances, cosmetics, electronics and other industries - are another increasingly important focus. A prime example of this is the insecticide Saltidin, which has rapidly risen to be one of its top ten selling products. Saltigo is now looking to secure the necessary registrations in various Asian countries where the key markets are expected to be found.