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  October 18, 2004
Volume 82, Number 42
p. 22

Move into new facilities in New Jersey is part of larger revamping in pharmaceutical chemicals


Rhodia made two announcements in recent weeks regarding its pharmaceutical chemicals unit, Rhodia Pharma Solutions. On Aug. 31, the company said Pharma Solutions' Chambers Works facility, a site rented from DuPont at the chemical giant's sprawling Deepwater, N.J., complex, had "come on-line," less than a year after Rhodia began moving its North American pharmaceutical services operations there.

Three weeks later, the company announced a 25% staff reduction at the pharma chemical unit's Dudley, England, facility and the discontinuation of some small-volume production.

While the announcements reflect the business' establishment of a new center in the pharmaceuticals breadbasket of New Jersey, they also indicate that reorganization and downsizing continue to impact the unit as Rhodia completes a corporate-wide overhaul.

EXIT ONE Muhs (left) and Green have moved shop to space at DuPont's Deepwater, N.J., complex, situated at the crossroads of the U.S. drug industry.

That overhaul was initiated last October when incoming Chief Executive Officer Jean-Pierre Clamadieu detailed a thorough restructuring plan that would cut the number of enterprises within the French firm from 17 to nine. Some $870 million worth of businesses would go. Clamadieu declared that Rhodia would focus on three overall areas going forward--home, personal care, and industrial ingredients; coatings; and pharmaceuticals.

Clamadieu, the former head of Rhodia's pharmaceutical and agrochemical business, committed to pharmaceutical chemicals despite the fact that Rhodia's 2000 acquisition of ChiRex, composed of former Sterling Drug and Glaxo Wellcome assets, for $545 million is cited as a key factor in the financial distress that forced the restructuring.

Rhodia has spent the past year consolidating its North American pharmaceutical services operations--including ChiRex facilities in Boston and Malvern, Pa.--at the Chambers Works facility, which most recently was used by Bristol-Myers Squibb. With 17 manufacturing units, ranging from 30 to 750 gal, the New Jersey site offers services ranging from process development to Phase III clinical trial production and small-volume manufacture of active pharmaceutical ingredients (APIs).

The Chambers Works operation is also meant to cater to customers seeking smaller scale production of targeted, high-potency drugs, which, according to Nick Green, president of Rhodia Pharma Solutions, is predominantly a U.S. phenomenon. With facilities in Dudley and nearby Annan, Scotland, focused on pharmaceutical intermediates and large-scale API manufacture, as well as plants in France, China, Thailand, and Brazil, Rhodia is hoping to use the New Jersey site both to home in on the U.S. market and to anchor a $300 million-per-year full-service business that can take customers from process development through to large-scale manufacturing.

Much of Green's job since coming onboard last year has been bringing Rhodia's far-flung pharma operations into focus around major facilities in the U.S. and the U.K. Rhodia, which supplies large-volume analgesics such as aspirin in addition to custom manufacturing, still does some pharma manufacturing at nearly 20 sites worldwide. "We had a sizable presence in pharmaceuticals, but it was cleverly disguised in the general business," Green says, adding that Pharma Solutions brings it under an umbrella to show the full power of the offering.

"Normally, consolidation means downsizing, but in this case it means clearly the opposite," he says.

Peter Pollak, a private consultant and former head of Lonza's pharmaceutical fine chemicals operation, still sees the consolidation at Rhodia in the context of downsizing. He points to the large number of facilities listed on the company's website and the financial troubles experienced by the parent company as indications of obstacles for the pharma group. He also questions whether Rhodia's full-service strategy is any different from that of other major pharmaceutical chemical firms.

Green says this view ignores improvements that have been made at Rhodia on the corporate level, as well as the reorganization of his business this year. He notes that Clamadieu has exceeded his target on proceeds from divestitures, largely with the sale of Rhodia's food and industrial phosphates business. While recognizing that full service is a trend in pharmaceutical custom manufacturing--one that Rhodia helped pioneer with the ChiRex purchase--Green sees real differentiation in the company's approach based on quality and capabilities.

GREEN CLAIMS the Chambers Works plant--with fully contained manufacturing, high- and low-temperature capabilities, and glass-lined stainless steel vessels--is second to none in North America. He adds that Annan is a world-class current Good Manufacturing Practices-certified facility acquired from Glaxo.

Wolfgang Muhs, Rhodia's vice president for development services, adds that technology is an important hook. Muhs notes that Rhodia has expertise in a range of important technologies, including hydrolytic kinetic resolution and aromatic bond formation, both key chiral synthesis techniques.

Although he will not disclose capacity figures, Green says Chambers Works is currently operating at a level comparable with the combined Boston and Malvern facilities prior to the move. The challenge now, he says, is to communicate the new strategy at Rhodia and show customers the new facility. "When customers come in and see, they are usually ready to do business," Green says. "We are getting the message out through the age-old practice of sales."

  Chemical & Engineering News
ISSN 0009-2347
Copyright © 2004

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