Tessenderlo exits pharma and takes to the water
Two sites sold to ICIG, another to focus on water treatment
Belgium’s Tessenderlo Group has agreed to sell its pharmaceutical ingredients activities to International Chemical Investors Group (ICIG), the industrial holding company that already owns a string of mid-sized chemicals and pharmaceutical sites worldwide. This followed on from an earlier announcement that will see Tessenderlo exit pharmaceutical ingredients at another site in France. Terms were not disclosed.
The deal with ICIG concerns two subsidiaries, Farchemia and Calaire Chimie, making intermediates and APIs at sites in Italy and France respectively and employing 360. Tessenderlo, which turns over €2.1 billion/year and employs 7,500, said that divestment is in line with a “strengthened focus on speciality products and services in the areas of food, agriculture, water management and valorising bio-residuals”.
Calaire Chimie, which dates back to 1903, has a single site in Calais, northern France, and is strongest in cyanation and high pressure reactions. Farchemia is at Treviglio, near Milan, and claims expertise in working with ethylene oxide, thionyl chloride, phosphorus oxychloride, dimethyl sulphate, carbon disulphide and aromatic amines. Both had belonged to Tessenderlo for over 20 years. The company is currently consulting employee representatives at both.
ICIG itself came into existence in 2004 and has since acquired 17 businesses, most recently Roche Colorado in August 2011. All have their origins in major global chemicals or pharmaceuticals corporations. They employ about 3,300 people and turn over about €700 million/year. Whilst some exhibit together at shows, including CPhI, they are generally not consolidated. As yet it is unclear how the two new operations will fit with its previous ones.
These are: WeylChem at sites in Germany and the US and PPC in France both of which make non-GMP fine chemicals; CordenPharma, which makes GMP fine chemicals and pharmaceuticals at sites in Germany, Italy, the US, Switzerland and Ireland, plus Synkem, a former Solvay operation making them in France; fine chemicals makers Miteni in Italy; performance chemicals makers Rütgers Organics, Nease and CarboTech in Germany and the US; and, Enka, a German maker of viscose polymers.
Shortly before this, Tessenderlo had announced a ‘turnaround project’ for its site in Loos, France, that will see it focus on water treatment chemicals and close down uncompetitive projects in other fields. It will also be spending heavily to remediate soil pollution there.
The company said that about two thirds of the total investment, some €75 million, will cover new production installations, namely a new electrolysis plant for the production of water treatment chemicals, which should be operational by 2016. The existing facility will be converted to modern membrane technology. Overall, capacity will more than double.
Loos makes iron- and aluminium-based coagulants, bleach and caustic soda, among other products, while also carrying out toll manufacturing. Water treatment is one of Tessenderlo’s strongest and most profitable growth segments.
The rest of the investment will go on an environmental improvement plan over the course of ten years to manage historic soil pollution at Loos. The company has begun consulting on this with the local Works Council and the Committee for Hygiene, Safety & Working Conditions.
Meanwhile, production units for pharmaceutical intermediates and potassium sulphate fertilisers, which Tessenderlo admitted are not competitive in current market conditions and “do not offer any perspectives of improving their respective situation”, may be closed down. This could lead to the loss of up to 39 of the 158 jobs at the site, though it is not yet clear if and when this would take place.
In 2010, Tessenderlo sold its Tessenderlo Fine Chemicals operation to the chemicals manufacturing and distribution group Tennants Consolidated for €20 million. This operation, now operating as Tennants Fine Chemicals, had sales of about €53 million at the time, making esters and aroma products from its site in Leek, UK. The company continues to make hard and soft gelatin capsules for drugs.