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LANXESS 12/02/2007

Saltigo – an experienced partner for innovative customers

Leverkusen – Saltigo GmbH, a wholly owned subsidiary of LANXESS, will focus its appearance at this year's Informex in San Francisco on its services for customers from various innovation-driven branches of industry. "To be successful, it is essential to have experienced, highly skilled and well-trained employees, a broad spectrum of technologies and modern, market-oriented production plants," explains Dr. Axel Westerhaus, Saltigo's Managing Director.

"After a phase of restructuring and reorganization, Saltigo is now ideally positioned not only to more efficiently develop its existing customer contacts throughout the world, but also to appeal to new customers and market segments," says Westerhaus. To this end, Saltigo is currently strengthening its sales and marketing workforce. For the further modernization of production facilities in Leverkusen and Dormagen, LANXESS plans a further EUR 30 million investment in addition to the EUR 50 million already invested.

"We can look back on a successful business performance. This is an additional motivation along the way to achieving our financial goals for this business," adds Westerhaus. Working together with the 1,400-strong workforce, it is important to consistently strive towards operational excellence and to further improve cost structures. New working time models and more flexible deployment of personnel are expected to help Saltigo adapt to the changing demands of its customers. One prominent example of this is the growing pressure to cut costs in the health care sector, which is affecting the entire pharmaceutical industry.

Fast-growing business in the pharmaceutical segment The pharmaceutical business line achieved double-digit sales growth last year. "We have recently launched a number of new projects with key pharmaceutical companies in Europe and the United States," says Ann Gidner, Head of Marketing & Sales in the business line Pharma. The large overall market for pharmaceutical intermediates and active ingredients continues to offer opportunities for further growth. All in all, Gidner sees significant expansion potential for Saltigo's pharmaceutical custom manufacturing for the U.S market: "Recently, many innovative pharmaceutical projects have originated in small pharmaceutical companies in North America. Projects in the early life-cycle phases of products – characterized by lively patent registration activity and proprietary synthesis processes – are a particularly attractive area of activity for Saltigo."

In an effort to meet the constantly growing demand for pharma intermediates and active ingredients under CGMP (Current Good Manufacturing Practice), Saltigo is now spending around EUR 10 million on an additional production facility in Leverkusen. "It should be possible to begin production there before the end of 2007," says Dr. Karl-Heinz Duchene, head of Manufacturing Strategy in the business line, commenting on the current state of planning. The new multi-purpose plant contains a range of 2500 - 8000 liter steel and glass lined vessels and isolation equipment and has a total capacity of more than 200 metric tons a year. The fast progress of the new facility has benefited from an engineering and quality management team with proven track record of GMP facility implementation.

Another of Saltigo's key areas of activity is that of "challenging chemistries", which refers to the handling of hazardous substances and the safe control of highly exothermic processes. "Even though such processes require an enormous amount of experience and very often special equipment, they are frequently superior to all other less complex alternatives. For this reason, we expressly concentrate on challenging chemistries to produce products of high yield and purity, to avoid the production of waste and to lower manufacturing costs," says Gidner. Examples include reactions with phosgene, concentrated acids, fluorine compounds and organometallic reagents such as Grignards and organolithium compounds.

Agrochemicals from Saltigo – from initial development to maturity In the field of agrochemicals, Saltigo sees its strengths – as it does in the pharmaceuticals segment – in offering the customers additional services along with the products supplied. These range from general synthesis planning and process development, joint campaign planning and supply chain optimization – specifically, the minimization of inventories on the customer and supplier side – to providing advice and the necessary assistance for the registration of substances. Dr. Uwe Brunk, head of the Agrochemical business line at Saltigo says: "Especially with regard to this comprehensive range of services, it is obvious that the value of an offer cannot be reduced to the lowest denominator of the price per kilogram. The lowest price is not always the best offer and therefore many of our customers are concentrating on the "total cost of ownership". In this regard, the call for long-term strategic partnerships is becoming louder. We are always very keen indeed to comply with these demands."

All in all, says Uwe Brunk, the research based agrochemicals industry is currently facing two major challenges: to increase profitability sustainably and to maintain a high degree of innovation. Many companies are now considering outsourcing solutions to improve efficiency. “With multiple production plants and a comprehensive technology portfolio on one integrated site, our value proposition to the agrochemical industry can be favorably compared with our customers' own production. We are experienced in the production of active ingredients and have a highly effective system to avoid cross-contamination. Our customers, who include almost all the major agrochemical companies, have successfully audited our system on several occasions," adds Uwe Brunk.

The decline in new active ingredients in the agro industry means that service providers like Saltigo must pursue new ways of doing business if they want to be successful. Uwe Brunk is nevertheless very optimistic and gives a number of examples: "Quite recently, we were struck by the growing trend described in the patent literature of a core building block with varying substituents for many new molecules in development. We developed an elegant, cost-efficient synthesis for this building block which enables our customers to take the corresponding active ingredients to market quickly and inexpensively. We are also developing various services for the constantly growing market segment of "proprietary off-patent" products for our customers."

Attractive markets for specialty chemicals The Specialty Chemicals business line has established itself as a highly competent and efficient service provider for the polymer, imaging, consumer and electronics industries. "Our customers appreciate in particular the fact that we can accompany them through the entire product life-cycle, from the initial lab quantities via the pilotation stage to commercial production," explains Dr. Thomas Gernot, Marketing Manager for Specialty Chemicals.

Chemicals for the innovative and strongly growing electronics industry are synthetically and technologically challenging, making this an attractive market for Saltigo. Dr. Andreas Depta, Business Manager for Electronic Chemicals at Saltigo says: "We have the necessary resources and experience to keep pace with the dynamically changing demands of this industry and supply our customers with the substances they need on a reliable basis." Typical examples are various functional and process chemicals that are used to manufacture many millions of liquid crystal displays (LCDs) every year.

Numerous specialty chemicals are required for the production of organic light emitting diodes (OLEDs). Saltigo is able to provide innovative solutions for their synthesis. "Aromatic amines, for example, can be built very effectively by means of catalytic coupling reactions such as the Buchwald-Hartwig method. In this case, Saltigo has the necessary license, know-how and practical experience to perform these reactions on an industrial scale in ton quantities," explains Dr. Lars Rodefeld, head of Process Development at Saltigo Specialty Chemicals.

The Specialty Chemicals business line also serves as a partner to other industries. A broad technology portfolio and consistent protection of intellectual property are the key differentiators which make Saltigo stand out as an excellent partner for innovative customers in the energy segment or in nanotechnology. Starting with the selection of the synthetic route, through the development of economical processes and their safe scale-up, to the development of efficient analytical methods and including aspects of chemical legislation – it is all covered by the company's broad service portfolio, tailored individually to the needs and wishes of the customer.

Saltigo employs some 1,400 people around the world and achieved sales of approximately EUR 400 million in 2005. Further information on the company’s entire service range and comprehensive technology portfolio can be found at www.saltigo.com.