14 January 1999 21:12 [Source: ICIS news]
HOUSTON (CNI)--Hercules and FMC loom as potential bidders for Monsanto's algin operations in an auction Monsanto plans to hold during the first part of this year to divest from alginates, an agribusiness analyst told CNI Thursday.
David Wheat of The Bowditch Group in Boston, Massachusetts said the Monsanto announcement on alginates appears to reflect the company's current strategy of "selling the less technologically-leveraged businesses" to accumulate cash for its agritech acquisitions programme.
"This is just squeezing seaweed," said Wheat of the alginate business.
St Louis, Missouri-based Monsanto extracts its alginates from brown seaweeds and uses them to stabilise, suspend and gel properties in food, pharmaceutical and industrial applications.
Wheat could not estimate the value of Monsanto's algin operations, which is folded into the company's NutraSweet Kelco unit. But he said Monsanto still needs cash for integration of its DeKalb and Delta & Pine Land acquisitions and noted that rumours had flourished last month speculating on a potential sale of the whole NutraSweet business.
No one was immediately available at Hercules or FMC to comment on their level of interest in the Monsanto algin operations.
In its announcement, Monsanto said it will sell its algin facility in Givran, Scotland. Independent of the sale, Monsanto also will phase-out its algin production in San Diego, California, relying on alternative sources of supply to meet customer needs.
Despite plans to divest from algin, Monsanto said it will nevertheless continue to strengthen its fermentation technologies to manufacture biopolymer products including xanthan gum and other fermentation-derived products. Like alginates, these products act as thickeners and stabilisers in a number of consumer and industrial products.
"While this decision was difficult, it was part of a larger recognition that we need to focus our resources on those areas that are most critical to our success as a life sciences company," said Arnold Donald, co-president of Monsanto's nutrition and consumer business unit.
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|