Contract manufacturing grows on agchems

30 June 2008 22:18  [Source: ICIS news]

By Feliza Mirasol

NEW YORK (ICIS news)--Fine-chemical contract manufacturers are seeing booming business from a growing trend in agrochemical outsourcing by major firms, an executive for an Indian firm said on Friday.

“With regards to the crop protection and the outsourcing, I would like to mention that, overall, the industry is witnessing a good growth rate,” said Jai Hiremath, vice chairman and managing director of Hikal.

Outsourcing continues to reduce costs for many multinational companies. India is still viewed as a preferred destination for outsourcing, Hiremath said.

In March, Hikal signed a long-term contract-manufacturing agreement with Germany-based Bayer CropScience. Hikal will supply active ingredients for crop-protection products from its site in Taloja, Mumbai, Hiremath said.

Hikal is setting up a new multipurpose crop-protection facility at Taloja that is expected to come on stream in the second half of this year.

The company has also set up ACORIS Research, a new facility at Pune that is exclusively dedicated to contract research and contract manufacturing, he said.

“Currently, we are expanding our capacities to cater to the increasing demand of our customers. We have invested substantially across our sites,” Hiremath said.

Over the last few years, big agchem firms have been trimming their portfolios to concentrate on higher value products.

Germany-based BASF cut its agchem portfolio down from 300 to 130 active ingredients from 2001 through 2006. Switzerland-based Syngenta has cut its portfolio down from 120 to 80 actives, and Bayer CropScience dropped 29 actives from its portfolio between 2000 and 2006.

Weylchem, a German firm, is another fine-chemical contract-manufacturing company that is benefiting from the outsourcing trend.

“We are busy,” said John Wetzel, vice president of marketing. “I haven’t seen it like this since the mid-’80s, shortly after outsourcing in the West really got going. We find ourselves in similar circumstances to our customers and are outsourcing some of our own projects in order to focus on the strategic ones.”

To discuss issues facing the chemical industry go to ICIS connect

By: Feliza Mirasol
+1 713 525 2653

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.

Printer Friendly