KemFine buys Avecia Fine Chemicals

KemFine, the fine chemicals business created via a management buyout from chemicals group Kemira last year, has acquired Avecia Fine Chemicals' business based in Grangemouth, Scotland.

In April, Avecia said it planned to close another unit at Grangemouth, which makes oligonucleotides, because of an exodus of clients and projects.

But the KemFine offer related to Avecia's large-scale chemical manufacturing plant that has been performing well.

The companies said the combined business will create 'a major new force in the global fine chemical sector', with a strong position in the supply of contract manufacturing services to the agrochemicals, pharmaceutical and specialty chemical industries.

The acquisition includes all Avecia Fine Chemicals' assets and operations on the 65-hectare site.

All 310 Avecia Fine Chemicals' employees are included in the transaction.

In 2004, the business recorded sales of £38 million (€56m).

Financial details of the acquisition were not disclosed.

This is the latest in a series of divestments for Avecia, which has been steadily timming down its activities to focus on core business.

It recently completed the sale of its organic light emitting diodes (OLED) materials and polymer electronics businesses to Merck KGaA for €50 million, and earlier this year spun out some of its pharmaceutical activities into a new business called Reaxa.

Meanwhile, it sold off a nitroglycerin unit at the end of last year.

Since cutting the apron strings of its parent, KemFine has been investing internally in its three key business areas - custom manufacturing of advanced intermediates for the pharmaceutical industry made to Good Manufacturing Practice (GMP) standards, as well as intermediates and active ingredients for the agrochemical industry - and has the stated aim of acquiring other businesses in these areas.

Ulf Bjorkqvist, CEO of KemFine, said: "The two businesses are an excellent fit and our combined technology strengths and asset capabilities will provide significant opportunities for growth from our dual manufacturing bases in Finland and Scotland."

Avecia Fine Chemicals will operate as KemFine UK Ltd with immediate effect.

Tom Shields, formerly vice president of Avecia Fine Chemicals, has been appointed managing director of KemFine UK and will be based at the Grangemouth site.

External links to companies or organisations mentioned in thisstory: KemFine Avecia