Clariant's former pharma unit braces for battle

By Gregory Roumeliotis

- Last updated on GMT

Related tags: Active ingredient, Pharmacology, Material

The sale of Clariant's Pharmaceutical Fine Chemicals (PFC) to
equity firm Towerbrook for around SFr110m (€70m) has been completed
and the unit, now called Archimica, is determined to dominate the
pharma raw materials market.

The new business is comprised of virtually all assets and personnel that had previously manufactured PFC's high-tech building blocks, regulatory starting materials, current good manufacturing practice (cGMP) intermediates and active pharmaceutical ingredients (APIs) for the pharmaceutical industry.

Archimica believes going it alone will give it an edge in an age of consolidation; last year Avecia sold its pharma custom synthesis business to Nicholas Piramal India for £9.5m (€14m), while Rhodia passed its Pharmaceutical Solutions unit on to India's Shasun Chemicals & Drugs.

Starting operations with sales in excess of $250m (€200m) and over 800 employees worldwide, Archimica will be headquartered in Frankfurt, Germany, with manufacturing and technology development sites in the United States, the United Kingdom, Germany, France and Italy.

"For the past five years, our Pharmaceutical Fine Chemicals business has been working to implement a strategy to be a premiere supplier for the pharmaceutical industry and this will not change,"​ Ralf Pfirmann, Archimica's global business director, said.

"This means that our technology development, our process expertise, our manufacturing excellence and our state-of-the-art regulatory compliance efforts will remain the same."

PFC's divestment follows poor financial results from the unit in 2005 and a growing trend in the chemicals market, where many firms are abandoning their pharma specialty chemicals business, as higher raw material and energy prices eat away profits.

Clariant had tried to restructure PFC, which was the only unit within the company not showing growth, by slashing costs and cutting jobs.

But the Swiss company has already gone through a SFr310m cost-saving exercise, losing 4,000 jobs or 15 per cent of its staff, and so has little appetite for more painstaking reforms.

"Today we are not just a chemical business and we are not just a pharmaceutical manufacturing business,"​ Pfirmann said.

"Our position as a standalone entity will allow us to focus on developing these distinctive capabilities to better serve the needs of major pharma as we move into the future."

Even if Archimica is need of reform, it begins its new life from a position of stength; earlier this year Roche asked the company, then PFC, to produce a shikimic acid derivative, known as epoxide, for its Tamiflu production.

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