Friday, July 6, 2012

Leather technology & the environment

A. SAHASRANAMAN

Vice-Chairman

Chennai Environmental Company of Tanneries (CEMCOT), Chennai

Introduction

India has emerged as a major tanning centre of the world, processing about 3,000-tonnes of raw materials per day. The main centres of tanning include Jullunder in the North; Kanpur, Unnao and Kolkata in the East; and Chennai, Ranipet, Ambur, Vaniyambadi, Pernambut, Erode, Dindigul and Trichy in the South. About 45% of country's total tanning capacity is in the South; 18% in Kolkata; 25% in Kanpur; about 7% in Jullunder and the rest scattered in rural areas.

Being a water-intensive process, tanning generates considerable volume of wastewater. On the average, about 35-m3 of wastewater is generated while processing one tonne of raw material. It is roughly assessed that about 100,000-m3 of wastewater is generated per day by the tanneries in the country.

In the process of leather making, a number of chemicals are also used in the tanning and post-tanning processes. It has been observed that the amount of chemicals absorbed by the leather is not more than 20%; the rest 80% being washed away with the process water. The effluent of tanneries thus carries a huge volume of a cocktail of chemicals. Besides, the solid waste generated while processing hides and skins works out to about 65% of the weight of the raw material. This includes hair, fleshings and trimmings of raw-, semi-processed or finished leather, shavings and leather dust, besides the sludge generated by wastewater treatment plants.

The solid and liquid waste generated by the tanning process thus poses a major challenge of waste treatment and management.

Pollutant discharge standards

The pollutant discharge standards have been specified by respective Pollution Control Boards in different states of the country. Whereas Minimum National Standards (MINAS) have been prescribed by the Central Pollution Control Board (CPCB), the state boards have been authorized to introduce more stringent norms according to the local situation. The standards generally applicable refer to pH, BOD, COD, TSS, TDS, Cr and these vary according to the recipient – such as surface discharge, for irrigation, marine discharge or sewer discharge. Generally there is no limit for TDS prescribed if marine discharge is authorised. With regard to sewer discharge too, depending on the dilution potential available, TDS limits may be modulated.

Nature of liquid waste and treatment process

It is desirable to know a little about the nature of pollutants in the liquid waste.

The liquid waste carries both suspended and dissolved solids. The suspended solids consist of dirt and particles of raw hides shaken off the raw material, some traces of dissolved hair, fleshings, leather pieces, leather dust etc. Generally, these suspended solids are either removed by the screening process, by use of fine screens or settled by chemical process and withdrawn as sludge. These are also removed by biological treatment in the aeration tanks or by anaerobic process. In this manner, pH, BOD, COD, TSS and Cr standards are achievable by physio-chemical and biological treatment in the waste treatment plants. The suspended solids are removed as sludge from the effluent treatment plants. It has been estimated that 3-4 kg of dry solid sludge is generated by treating 1-m3 of wastewater. The process adopted is generally referred to as conventional waste treatment system.

The dissolved solids however pose a major challenge. This consists of ions of sodium chloride, sodium sulphate and carbonates. Traces of dyes are also found. Conventional waste treatment systems do not provide for treatment of dissolved solids. In developed countries the treated effluent high in TDS is diluted in sewage treatment plants before discharge. In some locations, marine discharge is practised. Where such options are absent, such as in Tamil Nadu, for dealing with such pollutants, expensive reverse osmosis (RO) technology only can be employed. The reject of RO system has to be evaporated either by natural process using solar energy or through suitable mechanical system of evaporation. The mechanical process is energy intensive and very expensive.

Solid waste management

With regard to solid waste management, there are a variety of end-uses for the same. Typically, the solid wastes generated in tanneries are converted into by-products as shown in Table 1.

It has been observed that the factories in India converting the solid waste into various products are in the micro- and small-scale sector, employing basic technologies. With more efforts and focus, it is possible to increase value realization from such waste by employing superior technologies and producing better quality and variety byproducts. Italy and Spain have modern factories processing different solid waste of tanneries to high value-added products.

Currently, the sludge generated within tanneries as well as in the ETPs and CETPs is deemed hazardous in India and many other countries because these contain chromium, though in its trivalent form. It is therefore required to dump such sludge in secure landfill. In advanced countries like the USA, such sludge is not treated as hazardous because trivalent chromium is not deemed harmful. Be that as it may, many experiments have been done in India to demonstrate that such chromium in the sludge could be immobilized. In India, bricks, both burnt and unburnt, have been made using such sludge with clay and small quantity of cement. Also manure has been made using sludge and vegetable waste. These products displayed immobilization of chromium. At one point of time, CPCB has allowed use or disposal of sludge containing chromium upto 5000-ppm provided it was trivalent, but this notification was withdrawn sometime later. As of date, such sludge is deemed hazardous in India and hence it has to be disposed in safe and secure landfills. Apart from the cost aspect for creating new secure landfills, land is not easily available in the neighborhood of tannery districts.

Liquid waste management

First, let us briefly deal with the end-of-pipe treatment before looking at process technology options.

The discharge standards vary from location to location, with Kolkata opting for marine discharge standards and Kanpur (Jajmau) for sewer standards. But in Tamil Nadu surface discharge standards have been prescribed, which calls for reaching TDS level of 2100-ppm in treated effluent with chloride and sulphate being less than 600-ppm.

The TNPCB has directed that all tanneries in the state should go in for zero liquid discharge (ZLD) system of treatment with the twin objectives of recovery of process water and prevention of contamination of ground water and soil. The calls for employment of RO/mechanical evaporation systems. In terms of capital investment, it works out to more than Rs. 1.5 lakhs additional investment per cubic meter of wastewater treated. With regard to O&M cost, it is about Rs. 120 per cubic meter, about four times the operational cost of conventional treatment systems. It is noteworthy that 65% of the cost of operation of a ZLD system is accounted for by energy and fuel for boiler.

Of the 15 CETPs in the state, 13 have opted for ZLD system. The rest have the option of sewer discharge. Two ZLD systems are operational at Perundurai and Melvisharam; three covering four CETPs are under stabilization at Thuthipet, Maligaithope and Vaniyambadi; five, covering six CETPs at Pallavaram, Ranipet (3) and Pernabut are to be commissioned before end of March 2012. While the one at Dindigul has the option of sewer discharge, yet it is opting to go for ZLD too. Besides, it is reported that about 50 individual tanneries have their own RO systems.

Though it has been established that technologically it would be feasible to establish ZLD systems, its sustainability is a major question. Some advantages of the ZLD system include recovery of almost the entire wastewater for reuse, less consumption of chemicals due to improved process water and prevention of contamination of soil and ground water by high TDS effluent. In due course of time, the land and ground water contaminated earlier will be able to recoup. But, ultimately, the tanneries have to survive in a fiercely competitive global market!

The issue of sustainability of ZLD system has to be viewed from the points of view of:

Improving process technology thus reducing pollution, especially of TDS;

Stabilising process parameters for O&M of the ZLD system; and

Seeking support of government in critical areas for this unique environmental initiative.

While improvements in process technology may help the situation to an extent, unless strong government support is forthcoming, it is quite likely that the industry will face very serious difficulties, which may result in closure or migration of a good number of tanneries from Tamil Nadu. It will be a pity if this laudable initiative is not enabled to succeed.

Improved process technology

It is against this background that the issue of improved tanning technology has to be viewed. With mounting cost of waste treatment, the question naturally arises as to whether the generation of such voluminous polluting wastewater could be controlled.

The Central Leather Research Institute (CLRI) has been constantly looking for ways of introducing new technologies at different stages, which could reduce both volume and pollution intensity of wastewater.

Water conservation

This is a key objective, as tanneries will be charged as per volume of wastewater discharged.

It involves recycling of various streams of wastewater, such as counter-current soaking, liming, reliming, pickling and chrome liquor. The technology is well demonstrated in actual working environment in tanneries, and besides reducing water consumption, helps improve absorption of chemicals. Current uptake of these technologies has been few and far between. One reason is that many tanners being job tanners do not want to adopt any new process that could impact on quality of leather as others provide the raw material.

Reduction of TDS

This is achieved by:

Enzymatic/other methods of curing of hides and skins, eliminating or reducing salt used for preservation (50% reduction in volume of salt used possible);

Mechanical or manual desalting of hides and skins: about 15% of salt could be removed in this process;

Enzymatic unhairing: this helps eliminate or reduce use of sulphide in the process and recover undissolved hair;

Pickle-less tanning, which reduces TDS by about 30% overall;

Carbon dioxide deliming; and

Chrome recovery and reuse.

These technologies have been adopted only by a few. Minimum duration of preservation is 40-45 days and hide dealers are not confident of any preservative other than salt.

Perhaps charging tanners according to volume and intensity of TDS may help them move towards these technologies.

REACH standards - Residual Substances Limit in the European Union

Limits have been prescribed for 44 chemicals, not all relevant for tanneries. More are on the anvil. CLRI constantly keeps tab, and advises industry in advance of alternatives.

New technologies with multiple objectives

Three step tanning

The approach involves, removal of hair, flesh and fibre opening using biocatalysts and sodium hydroxide at pH 8.5 for cow hides. This is followed by a pickle-free chrome tanning, which does not require a basification step. Hence, this tanning technique involves primarily three steps: dehairing, fibre opening and tanning leading to near zero waste tanning.

Integrated wet finishing process

A compact wet finishing process has been developed for making both upper and garment leathers. The process provides leathers having comparable or even better physical and bulk properties to that derived from conventional wet finishing process. The water consumption is reduced significantly by 73% for processing 1-tonne of wet blue shaved leathers which is one of the pioneering achievements. This success story led the researcher to design and develop process for integrating tanning and wet finishing of leather processing.

Colouring leathers naturally; gains importance

An attempt has been made to colour leathers using natural dyes such as Rhine, Rhine M, Indus, Pacific, Caspian, Henna and modified Logwood. Twenty-four shades were developed using combination of seven natural colorants by mordanting with three metal ions. Sixteen developed colours have potential value in the global leather market in the context of environmentally benign leather processing.

Reverse leather processing through fundamental changes

A new greener and cleaner processing could be developed which will revolutionise the leather tanning industry. Reverse leather tanning works backward from the point where conventional tanning ends. The methodology saves time, energy and chemicals, along with reduction in water usage and pollution load.

Eco-efficient leather processing for clean and green leather

The process involves salt-free curing, lime and sulphide-free beam-house process and post-tanning followed by tanning employing a reverse leather processing technique. The functional performance of the leather is found to be on par with that of conventionally processed leathers. The rationalized leather process reduces the usage and discharge of chemicals and also makes a significant reduction in pollution loads.

Zero emission research initiative for leather – a way forward

Water recycle and reuse method based on zero wastewater discharge from beam house has been developed and standardized at semi-technical scales. In the new methodology, water consumption is reduced from 17-litres to 1.7-litres for one kg of hide in raw to wet blue processing. This approach can, in principle, lead to water renovation and recycle in individual tanneries through applications of membrane and other advanced technologies.

While all these new technologies have been developed b the CLRI with a view to help industry cope with the new challenges faced by them in environment management, given the structure of the industry, with SMEs dominating and many working as job tanners, it is a major challenge as to how to make them take to these very useful technologies.

Stabilising process parameters for the O&M of ZLD systems

As indicated elsewhere, the ZLD system using UF/RO/mechanical evaporators for treatment of tannery wastewater has been introduced for the first time in the world in Tamil Nadu. Even suppliers of RO systems/evaporators are not quite aware of the ideal process parameters as they are dealing with this type of wastewater for the first time. Indian Leather Industry Foundation (ILIFO), Chennai, has some experience of monitoring operation of some ZLD systems in ETPs of tanneries, but such ETPs do not have mechanical evaporators and instead resort to accelerated solar evaporation of the RO reject. Though some data is available for operation of ZLD in ETPs, dealing with the CETPs where wastewater is discharged by a number of tanneries producing different types of products, poses a different set of problems.

RO is basically a filter with very minute apertures and through which wastewater is passed at great pressure to filter out the dissolved solids. Physical parameters such as pressure, back washing for periodical cleaning of the membranes etc. can be controlled. But with regard to the impact of specific pollutants that cause blockage, corrosion, scaling, etc. there are no benchmarks yet. Reasonable precautions have been taken to arrest all pollutants, including organics through DMF and organic scavenger prior to applying wastewater on the RO.

Suffice it to say that the O&M operators, contractors and suppliers are jointly working towards stabilizing the process parameters. The longer the life of the UF/RO membranes and the evaporator, the lower will be the O&M cost of the system over a period of time.

Areas of Government support

Support of the government is critical for survival of the industry at this juncture. The industry has no doubt demonstrated its sincerity towards complying with the TNPCB direction regarding ZLD system, despite heavy cost. But, now the government must extend a helping hand to enable the industry remain competitive.

Concessional power tariff

As pointed out earlier, power and fuel for boiler are main contributors to O&M cost of ZLD system – working out to about 65% of the cost of operation. The power tariff for ZLD systems is on usual industrial/commercial rates. It is learnt that for sewage treatment plants operated by municipalities, the power tariff is different. If the sewage treatment systems in the tannery districts were operational, there may have been no need for the ZLD system at all. It is therefore desirable that the concessional tariff extended to sewage treatment plants may be also extended to the ZLD systems operated by the industry. This will provide some relief.

Recovery & usage of salts

The as yet unresolved issue of what to do with the solid salt recovered from the ZLD system needs tackling. Some efforts are underway to segregate these different salts and either use or sell these. After a technology is found, we have to find an investor to invest in a plant to recover different salts.

TNPCB had initiated discussion with the industry and R&D institutions in this regard. It is appropriate that the TNPCB may engage its experts to find other alternative means of use or disposal of the same. The CETPs will have to keep the recovered salt stored in safe condition until a viable alternative emerges.

Crisis fund for CETPs

The members of all CETPs are generally from the SME sector, many of who lead a hand-to-mouth existence. If any upheaval takes place in the marketplace, they would be the first to suffer.In order to ensure that such temporary setbacks do not result in the ZLD systems not being able to collect the O&M cost from members, a way out has to be found. A designated fund may be created to be kept at the disposal of a state agency, to extend interest-free loan to such CETPs as may need it, for meeting such crisis situations. Generally CETPs should be able to overcome such difficulties in a season or two.

Temporary closure of CETPs

From a technical point of view, it has to be realized that the ZLD system, like any other system, is liable to face sudden technical problems necessitating temporary closure for repair etc. But it would de virtually difficult to halt production in tanneries, as they would have commitments to meet. It is therefore for consideration that over a one-year period CETPs be allowed discharge effluent, after secondary and tertiary treatment, or after RO, for a maximum of 20 days, at any rate, not more than 3 days consecutively on any one occasion. Such a provision is necessary to avoid tanneries resorting to subterfuges when faced with a crisis.

Assistance for technology upgradation

The ZLD systems may need upgradation at an interval at an interval of five years or so. When major capital expenditures are required to be made, such investments may be treated as upgradation and the CETPs made eligible to drawn assistance from the Government towards capital expenditure, to extent of 50%. Wherever alternative to ZLD may exist or emerge, such as dilution by sewage or marine disposal, tanneries should be encouraged to avail such alternatives.

Way forward

ZLD systems now demanded in Tamil Nadu may, in future, become the norm in other parts of the country. In fact, some other countries, including Italy, are closely watching the developments in India.

If this is an irreversible situation, it makes sense for tanners to look for ways and means of:

Conserving use of water in the process;

Achieve better absorption of chemicals in leather; and

Reduce the generation of TDS to the maximum extent feasible.

Evaporation of rejects is a very expensive component of treatment cost and therefore, it makes eminent sense to reduce TDS content in effluent to the maximum extent by suitable in-process control measures. Modern and new process technologies can only provide answers. Bio-processing is a promising alternative.

It is necessary for tanners to have an open mind to embrace these new opportunities. It is equally necessary for the government to keep an open and sympathetic mind and extend a helping hand to the industry to overcome teething troubles in the initial years. There may be initial hiccups, but if the objective is clear and the technology provider is confident, there is no reason why the industry cannot move ahead in this direction.

(Lead lecture at LERIG 2012 held at CLRI, Chennai, on 28 January 2012)

New natural resource base in the chemical industry – only a matter of time

s raw materials become increasingly scarce and expensive and the effects of global warming become progressively evident, the scientific, business and government communities along with society at large are developing strategies aimed at a structural transition from the fossil-based economy to the bio-based economy. Chemical production is no exception. Although only about 8% of total oil production output is supplied to the chemical industry, increasing the proportion of renewables in the feedstock mix appears to have definite advantages.

The list of benefits includes a reduction in CO2 emissions from fossil sources, access to complex structures produced by natural synthesis and higher consumer acceptance of bio-based products. This, of course, assumes price competitiveness and a characteristics profile, which is at least comparable, and that depends on high raw material and process efficiency. Examples include plastics, bio-based solvents, surfactants and lubricants where biodegradability and the avoidance of harmful emissions are primary considerations. REACH regulations could also lead to increased use of bio-based substances in the chemical industry.

Bio-based polymers

According to information published by the trade association Plastics Europe, around 265-mt (million tonnes) of plastics were produced worldwide in 2010. That equates to 6% of global oil consumption, which was nearly 4-bt (billion tonnes) (BP Statistical Review of World Energy, 2011). In contrast, only 0.7-mt of bioplastics were produced during that year. Growth however has been forecasted to be enormous. According to current estimates presented by Hans-Josef Endres (University of Applied Sciences and Arts in Hannover, Germany) during a talk in November 2011, the figure is now approaching 1.7-mt, which equates to an annual increase of 20%.

Bioplastics are however a heterogeneous group, which includes bio-based as well as fossil-based plastics as long as they are biodegradable. Traditional biodegradable plastics are made from the natural polymers cellulose and starch. Then in the 1990's, the thermoplastic polymer polyhydroxybutyrate (PHB), which is used by bacteria as energy storage, was placed on the market under the trade name Biopol. This was the first biopolymer, which was used as a compostable alternative to PE in packaging applications. In recent years, however, the approach has been not to use biopolymers directly. Instead biotechnology or chemical techniques are employed to extract monomers from renewable feedstock to provide a basis for new (functional analogue) or traditional (structural analogue) polymers.

Currently the most popular functional analogue bio-based plastic is polylactic acid (PLA). PLA has properties similar to those of conventional mass-produced thermoplastics and can be processed on existing production lines. Because it is compostable, PLA has considerable potential for throwaway packaging such as beverage cups and plastic food packaging trays. One disadvantage of PLA is its low melting point, which makes it unsuitable for items that are exposed to heat.

Biotechnology and chemical techniques are used in combination to make the lactide polyester. Sugar or starch is fermented to make lactic acid, and a chemical dimerization process is then used to produce lactide. Finally, ring-opening polymerization is performed on the lactide monomer.

Industrial production of PLA got underway in 1994. Worldwide production capacity exceeded 110,000-tpa in 2010. Production plants are located in the US, the Netherlands and China, and additional production facilities are scheduled for construction in countries like Thailand. According to information provided by Hans-Josef Endres (Bioplastics and Biocomposites Institute at the University of Applied Sciences and Arts in Hannover, Germany), production capacity is expected to double by 2015. Although PLA has good biocompatibility because it is bio-based, development of recycling or composting infrastructure could drastically improve its biocompatibility. Intensive research is currently underway on how to do that. At the moment for logistical reasons, incineration is the only option.

An entirely different approach is used for the production of bio-based polyethylene (PE). PE is not biodegradable, but established recycling paths exist, at least in Europe. By making the platform chemical ethylene from renewables, the existing value-added chains starting from the production of different plastics and continuing right through to the end-of-life scenarios can be utilized.

In 2010, Braskem of Brazil launched production of a bio-based structural analog using bioethanol as the base. Two additional PE plants, as well as production facilities for polypropylene and PVC, have been announced with an expected completion date of 2015. PE production capacity will double. According to the 'World Bioplastics' study published by the Freedonia Group in 2011, Brazil is expected to start production of fully bio-based PET on an industrial scale by the end of the decade.

The higher degree of functionalization (alcohol and acid groups) of bio-based monomers compared to fossil feedstock can be exploited in a variety of plastics applications. To cite some examples, bio-based dicarboxylic acids (succinic acid) and polyols (castor oil, 1,3-Propandiol) are used in bio-based polyesters. Polyols are also used in polyurethane. Dehydration of lactic acid produces acrylic acid, a monomer of polyacrylic acid. Other acrylate polymers can be made through esterification of acrylic acid with castor oil or epoxidized vegetable oils. Butadiene, which is used in the production of synthetic rubber, can be made from ethanol. Castor oil derivatives are used in polyamides.

Many of these examples involve fine chemicals currently sold in niche markets where special functionality provides a unique selling point, which justifies the higher product price. These features may include biodegradability or surface-specific properties such as reduced foaming in beverage cups as in the case of PLA. Further market penetration depends not merely on production costs and availability. Complete recycling systems are also needed to ensure resource-efficient production (and use).

Bio-based lubricants

According to information contained in the 'World Lubricants' report published by the Freedonia Group in 2011, worldwide demand for lubricants was 36.7-mt in 2010. That figure is expected to rise to around 42-mt by 2015. The German Agency for Renewable Resources (FNR) reported that more than 1-mt of lubricants are used in the country each year, including 35,000-tonnes of biolubricants (3 %).

Biolubricants are not the same as bio-based lubricants. They include all lubricants that are readily biodegradable, regardless of whether they are bio-based, mineral-based, made with recycled oil or synthetic. Because this terminology is used, bio-based lubricants are not listed separately. Price is (still) an impediment to widespread use of biolubricants, which are two to three times more expensive than conventional lubricants, according to a market study conducted by Global Industry Analysts.

In contrast to mineral-based lubricants, bio-based lubricants are generally made from vegetable oil. Depending on requirements, they are used either in their native state (natural ester) or they are chemically modified (synthetic ester). The range of applications for bio-based lubricants covers the entire spectrum of conventional lubricants, including hydraulic oil, multi-function oil, engine and transmission oil, lube oil and grease and special oils. The European Committee for Standardization (CEN) recommends a biogenic content in excess of 25 % (CEN Technical Report 16227).

Because of their long service life, low toxicity and fast biodegradability, bio-based lubricants are particularly attractive for environmentally-sensitive applications. Offshore wind power generation is a particular challenge.

Although work is still in the R&D phase, there are already indications that bio-based lubricants may be suitable for wind power applications. By nature, bio-based lubricants provide better lubrication than comparable mineral-based products. They contribute to improved system operation in a number of ways, and they have good handling characteristics and superior filterability. A new research project (Win Lub II) has been launched to assess the suitability and compatibility of bio-based lubricating grease and hydraulic oils at major component manufacturers under the direction of Fuchs Europe Schmierstoffe.

Bio-based solvents

In a study carried out on behalf of the German Ministry of Economics and Technology (BMWi), the Fraunhofer Institute for Systems and Innovation Research (ISI) estimated that the global solvents market is in the region of 19.7-mt per annum. At least 12.5% of the total market volume could be produced from biomass, but the current figure is only 1.5%. Solvents are fluids that are able to dissolve, dilute or extract other substances, without changing the chemical composition of the substances or of the solvents themselves. Solvents belong to the aromatic and aliphatic hydrocarbon, alcohol, ketone, ester, ether, glycol ether and halogenated hydrocarbon groups.

Production of most solvents is based largely on fossil feedstock. Due to sustainability and environmental protection considerations, the spectrum is expected to shift towards bio-based solvents. The list of new bio-based solvents includes things like fatty acid methyl esters, which are also used in biodiesel, and esters of lactic acid with methanol (methyl lactate) or ethanol (ethyl lactate), as well as natural substances such as D-limonene, which is obtained from the rind of citrus fruits.

Another trend is to replace conventional organic solvents with biogenic solvents. Conversion of bio-based succinic acid or furfural (a by-product of the cellulose industry) to tetrahydrofuran (THF) is one example.

Bio-based surfactants

Bio-based surfactants (surface-active molecules) are produced by microbial fermentation or enzyme-catalyzed reactions.

Surfactants normally contain both hydrophobic and hydrophilic groups. In the case of bio-based surfactants, at least one of these groups is made from renewable resources.

The bio-based hydrophobic group is usually made from coconut oil or palm kernel oil. A hydrophilic group is normally made from carbohydrates such as sorbitol, sucrose or glucose. The use of animal fat has significantly decreased.

In contrast, the market for bio-based surfactants is expanding. Due to their good biodegradability and low to zero toxicity, they are used in specific applications by the paint, cosmetic, textile, agricultural, food and pharmaceutical industries. The mining and ore processing industry uses them as an emulsifier to facilitate oil production and for biological cleanup of contaminated sites.

Outlook

Given the scenario described at the beginning of the article, bio-based products are clearly in the ascendency. The question is not whether the chemical industry will exploit a new resource base. It is only a question of when. Biological feedstock has been used for a long time to make surfactants, so the transition should be relatively easy, assuming that adequate bio-based alternatives are available.

In the plastics sector, it appears that eco criteria will not initially be the prime consideration in the search for bio-based alternatives. Instead, the feedstock will simply be substituted, as is the case with PE and other plastics derived from ethylene. However, the availability of ethylene made from ethanol will be a limiting factor – 8.5-mt of bioethanol would be needed just to supply a substitute for the 5-mt of ethylene used each year in Germany. That is ten times the country's current production capacity!

Thursday, July 5, 2012

‘Shale gas brings about exceptionally bright outlook for US chemical industry’

LOW-COST FEEDSTOCK:

The past two years have seen a dramatic change in the outlook for US chemical companies. In 2010, the industry seemed well rationalised, but with few opportunities for significant revenue growth and - outside of R&D - little expansionary investment. However, with commercialisation of shale gas in the US, the industry has seen a remarkable turn of fortune, according to a recent KPMG report.

According to KPMG's chemical industry specialists, the outlook for US chemical companies feels overwhelmingly upbeat. With a new and abundant source of low-cost feedstock, the US market has suddenly transformed to become one of the most advantageous markets for chemical production in the world.

Abundant reserves of shale gas in the US has driven down the natural gas price and created a massive competitive advantage for US companies. The cost implications for the US chemical industry have been impressive. Generally, a ratio of 5-1 between crude oil and gas prices is enough to make the US chemical environment 'favourable'. At today's prices, the disparity is more like 9-1, creating lasting advantages for US producers.

Need to cultivate emerging markets

However, according to KPMG, there remain a number of risks on the horizon. The first - and likely most problematic - is that the exponential addition of new capacity in the chemical industry will lead to an oversupply that outstrips demand within the national market, returning the industry to the cyclicality that was such a problem in the past. Tied to this are the growth projections for global chemical sales. While the US economy has returned to growth, overall it remains a mature market, which cannot absorb all of the announced new capacity. Similarly, Europe and Japan have seen somewhat sedate growth, while the emerging markets have boomed ahead with China, India and Latin America in the lead.

"Clearly, US chemical companies will need to place strong focus on developing their supply lines into the new growth economies, and this will require a significant transformation of operating models for US companies who have traditionally been focused on the domestic marketplace," said Mr. Mike Shannon, global and US leader of KPMG's chemicals and performance technologies practice. "The opening up of many emerging markets to import growth can be a slow and complex process, and US chemical companies need to take actions today that will guarantee markets for products to be produced in four or five years time," he added.

PROJECT PROGRESS

Sabic-ExxonMobil jv moves ahead on speciality elastomers project

The 50:50 joint venture of Sabic and ExxonMobil – Al-Jubail Petrochemical Company (Kemya) – is going ahead with the construction of a world-scale speciality elastomers facility at the Jubail complex in Saudi Arabia.

The companies have approved the next stage of project development – engineering, procurement and construction (EPC). The facility will have the capacity to produce up to 400,000-tpa of rubber – including halobutyl, styrene butadiene, polybutadiene and ethylene propylene diene monomer (EPDM) rubbers – thermoplastic speciality polymers, and carbon black to serve local markets, the Middle East and Asia. Kemya has awarded the EPC contract for the elastomers facility to Technip, Tecnicas Reunidas and Daelim. The facility is expected to be completed in 2015.

Sabic and ExxonMobil Chemical have collaborated closely since 1980 when they established the joint venture to produce polyethylene, ethylene and propylene. The new synthetic rubber project represents a significant broadening of this portfolio.

Along with the elastomers facility an High Institute for Elastomer Industries; a vocational training centre in Yanbu; a product application centre in Riyadh; and thermoplastic polyolefin compounding and inventory management facilities in Jubail will also be set up.

DOWNSTREAM DEVELOPMENT

Saudi Arabia to promote plastic park

Saudi Aramco Entrepreneurship Center Company Ltd (Wa'ed) and Sadara Chemical Company have agreed to promote the PlasChem Park in Jubail Industrial City II in the eastern province of Saudi Arabia to local small and medium enterprises. The park is presently a effort between Sadara and the Royal Commission for Jubail and Yanbu to establish an industrial park for chemical and conversion industries in Jubail.

Wa'ed is a newly formed company, wholly-owned by Saudi Aramco, as a major financer and incubator of new businesses in Saudi Arabia. The park will be located next to the Sadara complex in Jubail to enable the establishment of downstream businesses.

CRUDE OIL TRENDS

'Global oil consumption growth slows down in 2011'

Global oil consumption increased by 0.7% in 2011 to reach an all-time high of 88.03-mbpd (million barrels per day), according to new research conducted by the Worldwatch Institute. This rate of increase was considerably slower than in 2010, when oil consumption rose by 3.3% following a decline of 1.3% in 2009 due to the global financial crisis.

China's oil consumption increased by 5.5% in 2011, and China accounted for about 85% of global net growth in oil use. An increase in oil consumption of 5.7% in the former Soviet Union contributed another 37% of net growth. But these increases were offset by declines in the US and European Union, where oil consumption fell by 1.8% and 2.8% respectively, according to Worldwatch Climate and Energy Research Associate, Ms. Shakuntala Makhijani.

The gap in oil consumption between countries in the Organisation for Economic Co-operation and Development (OECD) and all other countries narrowed further in 2011, with the two groups respectively accounting for 51.5% and 48.5% of total oil consumption. Oil remained the largest source of primary energy worldwide in 2011, but its share fell for the twelfth consecutive year to 33%.

Oil production trends

To meet continued growth in demand, global oil production rose for the second year in a row, by 1.3% in 2011, to reach 83.58-mbpd. Most of this increase was driven by higher production in OPEC countries, which overall grew by 3% in 2011. Meanwhile, oil production in non-OPEC countries fell 0.1%. Oil production growth was slow compared with natural gas and coal production, which grew by 3.1% and 6.1%, respectively, in 2011.

Political unrest in the Middle East and North Africa had a significant effect on oil production in certain countries in the region. Output in Libya fell 71% in 2011 – from 1.7-mbpd (2% of global production in 2010) to just 0.479-mbpd (0.6% of global output) due to the disruptions related to the civil war. At the same time, tense political situations and violence in Iran, Syria and Yemen resulted in production declines of 0.6%, 13.7% and 24%, respectively, in 2011. The global impacts of the April 2010 Deepwater Horizon offshore drilling rig blowout and oil spill have been limited thus far, with reviews in most countries finding that existing safety requirements suffice to prevent similar accidents. Despite expanding offshore drilling efforts, the share of offshore oil is expected to remain steady at 30% of global oil production, due declining output from North Sea and Mexican offshore oil wells. Deepwater oil production is expected to constitute a growing portion of this production and is projected to go from 6% of total global oil supply today to 9% by 2016.

"Against the backdrop of fluctuating oil prices and concerns about supply risk, many countries are paying more attention to their dependence on imports and the stability of the countries they purchase oil from," said Ms. Makhijani. "In 2011, the US imported 60% of the oil it needed, Europe imported 90%, and imports accounted for 68% of China's oil consumption."

Leading oil exporters

The Middle East remains the world's largest oil exporter, accounting for 36.2% of exports in 2011 and a growing share of the global market. The Soviet Union and the Asia Pacific region were the second and third largest exporters, with shares of 15.9% and 11.4%, respectively. Oil exports from North Africa fell by 32.8% in 2011 due largely to the disruptions in oil production caused by political instability in the region. Exports from the US grew by 19.4% in 2011, faster than in any other region, but they accounted for only 4.7% of the global market.

PETROLEUM INFRASTRUCTURE

Honeywell bags project to automate Kenyan fuel storage terminal

Honeywell has won a $2.4-mn project to deliver a full automation solution for Petrocity's Greenfield Konza terminal storage facility in Kenya. The project includes comprehensive solutions for the pipeline receipt system, tank farm, truck loading system, and terminal automation, through 'Experion' Process Knowledge System (PKS) and Terminal Manager. It also includes all industrial security, emergency shutdown (ESD) and fire & gas (F&G) systems.

The new terminal facility is situated on the Nairobi-Mombasa highway and will cater for Nairobi's growing demand for fuel, which accounts for more than 50% of the country's oil consumption. It will have a capacity to handle 120-mn litres of gasoline, diesel and kerosene – enough stock to fuel Nairobi for up to two months – with infrastructure for product receipt, storage and distribution.

CLEANUP COSTS

DuPont, Koch's Invista settle environmental case

DuPont Co has settled a $745-mn lawsuit brought by Koch Industries Inc's Invista unit over safety and environmental problems at plants once owned by DuPont. Terms of the settlement were not disclosed.

Invista is a large fibre and polymer producer that once comprised DuPont's textiles and interiors business, and which Koch purchased from DuPont for about $4.4-bn in 2004. Four years later, Invista sued to recover clean-up costs at facilities transferred in that sale, accusing DuPont of misleading it about health and safety conditions there.

DuPont had countered that it was not responsible to cover clean-up costs because Invista had violated contractual terms relating to environmental indemnification. A non-jury trial expected to run eight weeks began on June 4 in the US, but was put on hold as the settlement was being worked out. In April 2009, the US Department of Justice said Invista agreed to pay a $1.7-mn civil fine and spend up to $500-mn to correct environmental problems at plants in seven US states.

Invista had earlier disclosed more than 680 regulatory violations to the US Environmental Protection Agency after auditing 12 facilities it had bought from DuPont. The Justice Department had called the accord the largest under the EPA's audit policy.

Invista has several well-known brands including Lycra fibre and Stainmaster carpet, and also makes nylon, which DuPont had invented in the 1930s.

FLUOROCHEMICALS

Arkema to expand PVDF production in France

French chemicals major, Arkema, is planning to invest around €70-mn to expand production capacity of its 'Kynar' brand of polyvinylidene difluoride (PVDF) at its the Pierre-Bénite site in France.

This capital expenditure plan will help increase by 50% fluoropolymer production capacity in Pierre-Bénite by 2014. It also entails major technological advances such as the implementation of an innovative high purity process, a new effluent treatment plant, and a contribution to investments for the implementation of the site's technological risk prevention plan. The investment will consolidate the production chain around the Pierre-Bénite site, as well as the Saint-Auban site, which produces the monomer for some of the fluorogases.

In addition to European facilities at Pierre-Bénite, Saint-Auban and Zaramillo, Arkema operates world-scale fluorochemicals facilities in China and the US.

COLLABORATION

PPG to license titanium dioxide technology to Chinese firm

US-based paints major, PPG Industries, has signed an agreement with China's Henan Billions Chemicals Co Ltd, by which PPG will license certain chloride-based technologies to Henan Billions for use at the firm's titanium dioxide (TiO2) refinement facilities in China. PPG has also inked a long-term purchase agreement for titanium dioxide with Henan Billions. Commercial terms of the agreements were not disclosed. PPG intends to use the chloride-based TiO2 manufactured by Henan Billions for various end-use applications, including paints and other coatings. The TiO2 also would be available for sale to third parties, a PPG release said.

"This agreement with Henan Billions provides further evidence of PPG's commitment to utilise our existing expertise to expand and secure additional global supply of titanium dioxide," said Mr. Charles Kahle II, PPG Chief Technology Officer and Vice President, coatings R&D. PPG previously manufactured titanium dioxide using the chloride process at its chemicals facility in Natrium, USA, and sold titanium dioxide pigment for coatings and other end-use applications.

Sabic inks pact with German research organisation

Saudi Basic Industries Corporation (Sabic) and Fraunhofer-Gesellschaft, a leading German organisation for applied research, have recently signed a multi-year agreement in the Netherlands to jointly develop advanced technologies in areas such as light-weight construction and renewable energy.

Sabic is especially keen on research cooperation in fields such as light-weighting products, including polymeric materials and composites, and solar energy technology.

GREENER OPTIONS

Wacker eliminates boron-containing additives from silicone lubricant pastes

Wacker has launched novel silicone lubricant pastes for the fitting of cable accessories for the transmission and distribution (T&D) industry. The pastes are free of boron-containing additives and therefore particularly environmentally- and user-friendly. Silicone pastes are used in many applications including as anti-friction and release agents, lubricants and sealants, as heat-sink media and for damping and insulating electrical components.

In the past, small amounts of trimethyl borate were added in the production of silicone pastes. This improved the stability and shelf-life of the products. However, the additive can release boric acid, which has been listed as a hazardous substance by the EU since 2009 and classified as a 'Substance of Very High Concern' by the European Chemicals Agency (ECHA) since 2010.

Wacker said that it had stopped using this additive and instead started employing pyrogenic silicas and other additives that are not subject to mandatory labelling. "By modifying the formulation in this way, Wacker is now the first company to offer a completely boric-acid-free range of silicone pastes," a company release said.

SPECIALITY CHEMICALS

Forbo drops plans to sell construction-adhesives unit

Forbo Holding AG, the Swiss maker of floor coverings, has abandoned a sale of the remnants of its adhesives business after talks with potential suitors ended.

Forbo evaluated the strategic options and pursued talks with interested parties in the business, which has annual sales of CHF100.4-mn ($105-mn), the company said. It plans to keep construction-adhesives within the group over the long term.

The company's Chief Executive Officer has largely dismantled the bonding division, selling an industrial-adhesives unit to H.B. Fuller in March for CHF370-mn. The CEO now considers having construction-glues sitting within the related flooring business as the best way forward, though the situation could still be revisited at a later date.

Adhesive makers are consolidating to build scale and expand their operations globally, with Henkel AG recently agreeing to buy an adhesives operation from Cytec Industries Inc for $105-mn. An additional litmus test to gauge investor interest in construction chemicals will be Wendel SA's possible sales of aluminates and admixtures units, valued at a potential €1-bn.

Forbo's construction adhesives unit has 270 employees and its main markets are the Benelux region, Germany, Russia, and Eastern Europe. Production facilities are located in the Netherlands, Germany and Russia, Forbo said.

BETTER SERVICE

PolyOne expands innovation centre in China

PolyOne Corporation has opening its expanded customer-focused innovation centre in Shanghai, China. The centre has doubled in size and added new capabilities that will enable the company to better collaborate and develop customer-centred innovations, a company note said.

"The Shanghai Innovation Center expansion underscores our commitment to collaborating with customers on specialised solutions that improve their profitability and speed to market," said Mr. John Van Hulle, President of PolyOne Global Color, Additives and Inks.

In addition to the Shanghai centre in Asia, PolyOne also has innovation centres in Suzhou and Singapore and R&D facilities in Shenzhen, Tianjin, Dongguan and Thailand.

DKSH acquires Australian speciality cables distributor

Swiss firm DKSH has acquired ElectCables Pty Ltd, one of Australia's largest independent distributors of flexible cables and related equipment. ElectCables specialises in supplying cables to major industrial sectors including electrical, data, contracting, mining, and manufacturing.

ElectCables will be integrated in DKSH's technology business unit.

REGULATORY APPROVAL

Wacker gets EU approval for using cyclodextrin as food ingredient

Germany's Wacker has said it has received approval from the European Commission for the use of gamma-cyclodextrin as a food ingredient for foodstuffs and beverages in the European Union (EU).

Cyclodextrins are ring-shaped sugar molecules, which Wacker bioengineers from plant-based raw materials such as corn or potatoes. In food applications, cyclodextrins can mask an unpleasant taste, stabilise sensitive food ingredients such as vitamins or increase the bioavailability of certain active agents. EU approval of gamma-cyclodextrin thus opens up a series of new applications in the European food industry for Wacker.

Wacker highlighted scientific studies, which showed that gamma-cyclodextrin is an ideal source of glucose that has a low impact on blood sugar and blood insulin levels. As it is tolerated well even when taken in large quantities, gamma-cyclodextrin is an ideal ingredient for foodstuffs whose purpose is delayed glucose release. Furthermore, cyclodextrins can also mask odour and taste, for instance the bitter taste of green-tea products and ginseng preparations, without diminishing the benefits of the bitter substances. Moreover, the bioavailability of functional ingredients, such as curcumin or coenzyme Q10, can be increased with the aid of cyclodextrins, the company said.

GREEN PROCESS

Oleon opens glycerine -based propylene glycol plant in Belgium

Belgian oleochemical firm, Oleon, has started up a new manufacturing plant for producing 'bio' propylene glycol (PG) from glycerine in Ertvelde, Belgium. The plant is the first of its type worldwide, leveraging a highly sustainable production process developed and licensed by BASF and jointly realised with Oleon.

Historically, PG has been produced by means of hydrolysis from propylene oxide, which is obtained from crude oil. The starting material employed at the Ertvelde site is glycerine, primarily obtained from fats and oils generated as by-products of oleochemical production. As an additional benefit, the glycerine-based process used at the Ertvelde site requires fewer production steps than hydrolysis, increasing the efficiency of Oleon's 'bio' PG production.

BASF not only researched the glycerine-based production technology it realised with Oleon, but also supplies the chemical catalysts that are key enablers for the advanced bio PG production process.

PROJECT UPDATE

Solazyme commissions integrated algal oil bio-refinery in US

US-based renewable oil and bioproducts company, Solazyme Inc, has commissioned its first fully integrated bio-refinery (IBR) in Peoria, Illinois (USA), to produce algal oil.

Solazyme has been running routine fermentations at commercial scale since 2007 and began running fermentation operations at the Peoria facility in Q4 2011. With the successful production of algal oil from the integrated facility in June, Solazyme has met its start-up goals for the facility on schedule.

The IBR was partially funded with a federal grant that Solazyme received from the US Department of Energy (DOE) in December 2009 to demonstrate integrated commercial-scale production of renewable algal-based fuels. The demonstration/commercial-scale plant will have a nameplate capacity of two million litres of oil annually.

To maximise capital efficiency, Solazyme bought the existing Peoria fermentation facility in May 2011 and began retrofitting the former PMP Fermentation Products plant into an integrated demonstration/commercial-scale facility that will produce renewable tailored triglyceride. Solazyme has been operating at semi-commercial scale through contract manufacturers since 2007.

Solazyme and Bunge break ground on oils production facility in Brazil

Solazyme and Bunge Global Innovation, a wholly-owned subsidiary of Bunge have broken ground on a 100,000-tpa renewable oil production facility adjacent to Bunge's Moema sugarcane mill in Brazil. The plant is targeted to be operational in the fourth quarter of 2013.

LONG TERM CONTRACT

Praxair to supply gases to Chinese coal-to-chemicals project

Praxair China has signed a long-term supply contract with Yankuang Guohong Chemical Co Ltd and Yankuang Group to supply industrial gases to its coal gasification process for the production of methanol and downstream chemicals at its chemical park in Zoucheng city, in northern China.

Praxair will construct a large air separation facility with a capacity of 3,000-tpd (tonnes per day) of oxygen and purchase Yankuang Guohong's existing air separation units. The new plant is scheduled to start up in late 2014 and will replace Yankuang Guohong's existing air separation units. The liquid oxygen, nitrogen and argon produced from the existing air separation plants and the new facilities will be integrated with Praxair China's liquid production and distribution network in the region.

This will be the fourth large capacity air separation plant of 3,000-tpd or greater that Praxair has won in China. Two of these plants, of similar capacity, have been built and are currently operating in Zhenjiang, Jiangsu province and Wuwei, Anhui province, to supply customers in the coal based chemical industry. All of these plants are under long-term sale-of-gas contracts.

Cole-Parmer presents range of fluid handling & lab equipment at ACHEMA

Cole-Parmer, a leading player in fluid handling, life science, general laboratory products, instrumentation, and equipment, presented a wide range of fluid handling and lab equipment at the global chemical engineering expo, ACHEMA 2012, held during 18-22 June in Germany.

The company showcased its 'Masterflex' high-performance peristaltic pumps that serve the biotechnology, chemical, industrial, research and development, manufacturing, and pharmaceutical industries, among others. In addition to the 'Masterflex C/L' (compact/low flow), L/S (laboratory/standard), and I/P (industrial/process) pumps, various tubing styles and pump heads were on show to demonstrate application-based pumping systems.

Lab equipment featured at the stand included rotational viscometer, which offers greater chemical resistance and the ability to withstand chemically corrosive materials. Other highlights included the 'StableTemp' modular block heaters that provide flexibility to heat different sizes of microtubes, centrifuge tubes, vials, microplates, and PCR strips or tubes; the 'Stir-Pak' high-speed, low-torque overhead stirrer system that allows users to customise components to suit their mixing application and 'Oakton' thermometers.

ENERGY EFFICIENCY

AkzoNobel to employ unique caustic soda evaporation system

AkzoNobel Industrial Chemicals will apply a unique caustic soda evaporation system to its new membrane electrolysis plant at the Industry Park Höchst in Frankfurt, Germany. The system will enable 20% energy savings and will be supplied by Alfa Laval.

The evaporation system will concentrate caustic soda from 32 wt% solution to 50 wt% solution based on evaporation and condensation heat exchangers. By combining the advantages of different types of heat exchangers it is, for the first time, feasible to concentrate caustic soda in a four-effect evaporation system. This unique Alfa Laval design will enable energy savings of 20% compared to the best traditional designs. The installation will be built at AkzoNobel's new membrane plant in Frankfurt, which will have a capacity of 275,000-tpa of caustic soda.

Germany's PCC planning DME production in Russia

PCC SE of Germany and JSC Shchekinoazot of Russia have formed a joint venture for manufacturing aerosol quality dimethyl ether (DME) in Russia. DME is primarily used in the cosmetics industry as a blowing agent for hairsprays as well as for the manufacture of insulating foams (one-component PU foam).

The production plant with a capacity of 20,000-tpa will come up at the site of JSC Shchekinoazot, which will also supply the key raw material – methanol – from its facility. Production start is slated to begin in 2014.

FORECAST

HIV generics set to dominate the antivirals market

Generics are predicted to take over the antiviral drugs market, especially in the case of HIV medication, as a series of patent expiries will open opportunities for ambitious companies to seize huge revenue, according to a new report by healthcare experts, GBI Research. The report states that an increase in the patient population and reforms in government policies will work together to encourage the rise of generic pharmaceutical powers.

While it is estimated that, in 2010, generics accounted for 18.9% of the market share in the global antivirals market, this market share is forecast to grow to reach 29.2% by 2018. This is largely due to a series of patent expiries expected to hit the antiviral market, which will act to raise the value of generic antiviral drugs to over $9-bn by 2018, the report revealed.

Major patent expiries

Generics in the HIV market, in particular, accounted for an estimated majority market share of 46% in the total generic antivirals market during 2010. HIV generics are expected to create a boom in the market, due to a loss of patent exclusivity for key antiviral drugs. The generic market is currently dominated by products such as zidovudine, didanosine, stavudine and lamivudine. However, many major patent expiries are expected during the period till 2018, including Sustiva (efavirenz) and Kaletra (lopinavir + ritonavir) in 2013, Prezista (darunavir ethanolate) in 2014, and major Nucleoside Reverse Transcriptase Inhibitors (NRTIs) such as Trizivir (abacavir sulphate/lamivudine/zidovudine), Epzicom (lamivudine and abacavir) and Emtriva (emtricitabine) in 2016. "By 2018, billions of dollars' worth of industry revenue will be lost from the expiry of these brand name products, and the race will be on for generics manufacturers to create new superstar drugs to make the most of this unmet need in the market," the report said. Generics within the antiviral market are forecast to grow at a CAGR of 10.5% during 2010-2018.

In December 2011, Teva launched generic Combivir in the US market as a combination tablet containing lamivudine and zidovudine, indicated in combination with other antiretroviral agents for the treatment of HIV-1 infection. Combivir had annual sales of approximately $556-mn in 2010.

MEGA DEAL

Bristol-Myers Squibb teams up AstraZeneca in $7-bn deal for Amylin

Bristol-Myers Squibb has agreed to buy Amylin Pharmaceuticals, the maker of a promising new diabetes drug, in a complicated deal that is valued at about $7-bn. To help finance the transaction, Bristol-Myers is teaming up with AstraZeneca, which will pay about $3.4-bn in cash and will share in the profits from Amylin's sales.

It is the latest deal by major drug companies to refill their product pipelines with new treatments, especially as older successful products lose their patent exclusivity.

Under the terms of the deal, Bristol-Myers will pay $31 a share in cash for Amylin, which is a 10% premium to the company's closing share price on June 29. It is also 51% higher than Bristol-Myers's original bid in February, which Amylin rejected but used as the basis for an auction of itself.

As part of the deal, Bristol-Myers will assume debt and will make a payment to buy out Amylin's former partner, Eli Lilly & Company.

Bristol-Myers has been seeking new products to replace revenue from its top seller, the blood thinner 'Plavix', which began facing generic competition in May after generating $7.1-bn in sales last year.

Besides Bristol-Myers and AstraZeneca, others that reportedly made bids for Amylin included Novartis, Merck and Sanofi-Aventis. Drawing these companies' attention is Bydureon, a treatment for Type 2 diabetes that is injected once a week. It is a refinement of Byetta, which was introduced in 2005 and requires twice-daily injections. Both are derived from a hormone in the saliva of the Gila monster, a poisonous lizard found in the Southwestern United States and in Mexico. The two drugs are in the class known as GLP-1 receptor agonists, which mimic the effect of glucagon-like peptide, a hormone that increases insulin production when blood sugar is high.

Albemarle expands API production at US facility

US-based speciality chemicals firm, Albemarle Corporation, has announced that its FDA-registered South Haven, Michigan site has expanded and upgraded its multi-product cGMP active pharmaceutical ingredient (API) manufacturing facility. This expansion is the latest in a series of projects at the South Haven site to increase capabilities and production throughput. In the past two years, the number of custom API projects has more than doubled at the South Haven site. 

BRIGHT OUTLOOK

New report forecasts impressive growth for Russian pharma industry

The Russian pharmaceutical industry will continue to expand due to government initiatives and increased healthcare spending, predicts a new report by healthcare business specialists, GlobalData. The report states that Russia's efforts to boost its pharmaceutical sector have been rewarded with strong and steady growth and the increased implementation of domestically produced treatments.

The country's pharmaceutical market soared from a 2005 valuation of $6.6-bn to almost three times that in 2010, when it was worth approximately $18.7-bn, climbing at a remarkable Compound Annual Growth Rate (CAGR) of 23%. GlobalData expects this growth to continue at a less staggering, yet still impressive, CAGR of 9.5% to reach $46.4-bn by the end of 2020. This surge in value is attributed to the introduction of national programmes such as Health in 2006, and PharmMed 2020, which made its debut in 2009. As part of the latter, Russia has significantly increased R&D spending in the field of drugs innovation and created opportunities for the development of the healthcare industry. The Russian government has laid out goals to increase the domestic share of the pharmaceutical market to 50% by 2020, and the share of domestic innovative drugs to 60% by the same year.

Barriers to growth

The report also highlighted the challenges facing the industry in Russia, including lack of clarity in regulatory systems and language barrier that results in foreign multinational corporations (MNCs) facing problems when attempting to register drugs and medical devices.

On average, it takes 24 months to register a new drug in an application process that must be carried out in Russian. This often proves restrictive for MNCs who want to progress without seeking legal advice from local distributors or consultants. Furthermore, according to a new law that came into effect in 2010, foreign manufacturers must also conduct clinical trials in Russia prior to registration, and the results of international trials will only be accepted if they were conducted with the participation of Russian patients.

Entries called for CPhI Pharma awards

Event organiser UBM Live has invited exhibiting companies at the forthcoming CPhI Worldwide expo and concurrent events to participate in the annual 'CPhI Pharma Awards'.

The awards will honour companies and organisations breaking new ground in formulation, drug delivery systems, medical devices, packaging, chemical and bio manufacturing. The 'Best Innovation in Pharma' category will have a gold, silver and bronze winner. Additionally, there will be one winner each for the inaugural 'Best Sustainable Pharmaceutical Packaging Award' and the 'Best Sustainable Stand Design Award'.

The CPhI Worldwide expo runs from October 9 to 11 at the Feria de Madrid in Spain and winners of the CPhI Pharma Awards will be announced on October 9. The call for the awards is open till 27 July 2012.

"The CPhI Pharma Awards offer a unique and dedicated platform for companies to showcase groundbreaking innovations in front of a global audience. They exist to encourage and celebrate the spirit of continued innovation and advancement in the pharma industry and we are pleased that they have had such positive feedback over the last nine years," noeted Mr. Greg Kerwin, Pharma Portfolio Director.

2011 award winners

Last year in Frankfurt, Glycotope won the gold award for the 'GlycoExpress' platform technology designed to optimise the glycosylation of antibodies and other glycosylated therapeutics. Acuros took silver for its novel disposable device for the continuous delivery of small volume parenteral drugs, which uses an osmotic actuation and needs no power supply. The bronze went to Johnson Matthey Catalysts for its 'Colour-Tag-Protein' technology that is used as a direct marker for protein expression, speeding up the development of new bioprocesses.

PRICE MOVEMENT

Lanxess announces price hikes

German speciality chemicals company, Lanxess, has announced global price increases for ion exchange resins and inorganic pigments, effective from July 1, 2012. The inorganic pigment prices are being increased by a minimum of Euro 100 per metric ton. At the same time, Lanxess' wholly owned subsidiary Saltigo GmbH will increase its prices worldwide for its active ingredient 'Saltidin', used in insect repellents, by up to 15% because of the rise in raw material costs.