Search

In Changzhou, a few hours’ drive northwest of Shanghai, engineers are busily erecting a series of large industrial buildings on a 37-acre plot. The site belongs to Shanghai Syn-The-All Pharmaceutical (STA), the chemical manufacturing subsidiary of WuXi AppTec, China’s largest provider of pharmaceutical research services. When construction is completed around 2020, the site will include nine commercial production facilities for active pharmaceutical ingredients, or APIs. It will be a surprising amount of manufacturing capacity for a company that is now mostly a provider of laboratory services. But WuXi is confident that if it builds, customers will come. It’s a scenario much feared by Western contract manufacturers of drug ingredients. They have watched WuXi expand from a single lab in 2000 to a Chinese research outsourcing behemoth with more than 8,000 employees and sales that are expected to approach $700 million this year. That growth occurred as drug companies eagerly signed ...

Part-time rice farmers in Japan can treat their paddies with herbicide on their way to the office in the morning. All they have to do is toss in a packet the size of a tea bag that dissolves and protects the whole paddy. The technology was developed by Japanese companies that grasped that most of their country’s rice growers aren’t full-time farmers. In the field of malaria control, Sumitomo Chemical came up with an equally elegant and practical tool. Fifteen years ago, the Japanese firm was the first company to develop a low-cost insecticide-impregnated mosquito net endorsed by the World Health Organization. Featuring a lightweight polyethylene mesh, the nets are effective for at least five years. Nowadays, as many as 800 million people use them, the firm says. Dwarfed by their competitors abroad, Japanese pesticide companies punch above their weight when it comes to innovation. Drawing strength from an attractive ...

To anyone who visited Taiwan in the 1980s, the idea that the island would ever be a model of sustainability and best environmental practices sounds ludicrous. Back then, public buses spewed thick g...

A vinyl chloride leak at a ChemChina facility in the northern China city of Zhangjiakou caused a huge blast that killed 23. Most victims of the Nov. 28 explosion were sitting in trucks that were waiting outside the factory, run by Hebei Shenghua Chemical Industry, a subsidiary of the state-owned firm. In a statement on its website, ChemChina said, “The occurrence of this accident reflects serious problems in our safety management.”

The giant contract research firm WuXi Apptec has raised nearly $1 billion from a stock listing in Hong Kong. The company plans to use the proceeds to expand capacity, acquire other research and manufacturing contractors, and shore up its capital base. The firm made the listing at a time when stock market conditions in Hong Kong are relatively weak. Still, the listing was slightly oversubscribed and netted the company $966 million. About a third of the proceeds will go toward new facilities in China and the US. In China, WuXi will spend $188 million at seven sites, including several clinical trial facilities and a manufacturing facility for viral vectors and plasmid DNA in Wuxi, China. In Hong Kong, WuXi will spend $65 million on a new R&D center. WuXi is spending $65 million in San Diego on a bioanalytical lab and commercial-scale plant that will produce cell and gene therapy

We study how labor mobility affects optimal transfers in a federation and the fi scal imbalances that arise because of constraints on federal tax-transfer policies. Fiscal imbalance — a deviation from the optimal fi scal gap — occurs when the second-best allocation of resources in a federation cannot be achieved because fi scal transfers do not or cannot undo fi scal externalities among regional and federal governments. Under reasonable circumstances, we fi nd that labor mobility increases the optimal fi scal gap, that is, increases the transfers required to achieve the second-best optimum. In a decentralized federation, the optimal fi scal gap cannot be achieved. In the absence of labor mobility, vertical fi scal externalities will apply. Regional governments will overspend, which will induce the federal government to create a negative fi scal imbalance to contain the size of its tax rate, assuming it can commit to future transfers. If the federal government cannot commit, regions will overspend even more and federal transfers will be excessive, leading to a positive fi scal imbalance. In both cases, mobility of labor mitigates the fi scal imbalance by reducing the tendency of regions to overspend.

Nippon Shokubai will build yet another acrylic acid plant, this time in Indonesia. The Japanese firm will spend $200 million on a 100,000-metric-ton-per-year facility in Cilegon that is set to open in 2021. Last month, the firm opened a similar-size plant in Antwerp, Belgium. Acrylic acid is used to produce superabsorbent polymers for diapers and other applications. Shokubai calls itself the world’s largest maker of superabsorbents.

Nippon Shokubai completed the construction of two facilities: one to produce superabsorbent polymers and the other to produce the key ingredient acrylic acid. Built at a cost of $400 million, both plants at the firm’s site in Antwerp, Belgium, have an annual production capacity of 100,000 metric tons. Separately, Sumitomo Chemical finished building a 100,000-metric-ton methionine plant at its site in Ehime on the southeast island of Shikoku in Japan. The plant brings Sumitomo’s total production capacity for the poultry feed additive to 250,000 metric tons annually.

Novartis will inject $40 million into Cellular Biomedicine Group (CBMG), a Chinese firm that will produce Novartis’s Kymriah CAR T-cell treatment for people with cancer in China. Although Kymriah h...

AGC will build a facility at its site in Chiba, Japan, that will use mammalian cell culture to produce antibody-based drugs. The firm, formerly called Asahi Glass, says the plant will be the first in Japan to make such cell culture drugs on a contract basis. AGC has been aggressively expanding its drug contract manufacturing business. In July, it announced the expansion of a small-molecule pharmaceutical chemical plant, also in Chiba. In 2016, AGC acquired the biologics firms Biomeva and CMC Biologics.

TWO YEARS AGO, Endo Pharmaceuticals began to transform itself into an innovationdriven drug company. The Pennsylvania-based firm, which until then was mostly a supplier of branded and generic pain-management drugs, now has eight drug discovery programs under way, and it expects to be running as many as 12 by next year. Yet the company has no laboratories of its own. “We probably would not have started these programs if we had had to build our own capabilities,” says Ivan Gergel, Endo’s executive vice president for R&D. In lieu of labs, Endo is relying on the research capabilities of companies based in India. Endo has hired eight senior research scientists in the U.S. to manage its relationships with those firms. In India, Gergel says, the company’s programs employ 70 to 80 scientists who work full-time in labs dedicated to Endo. Gergel reckons it’s doing all of this for about one-quarter of what it would have cost ...

WHEN IT COMES TO energy generation, China welcomes new approaches. Philip Liu, an entrepreneur from Arizona, has raised $60 million, largely from Chinese investors, for a large-scale demonstration plant he is building in southern China that will turn oil shale into fuel for the local chemical industry. The carbon-rich waste from the plant will feed into an adjacent facility that will produce a low-cost fuel for power and gasification plants. “I don’t think I could have implemented this project in the U.S.,” says the Chinese-born Arizonan. “But in China, when they trust the management team, the investors will put the money down—and quickly.” AuraSource, the U.S.-based company that Liu founded, developed the oil shale technology at R&D facilities in Shanghai after licensing the basic processes from Chinese research centers. AuraSource’s experience is just one illustration of the opportunities that exist in China in the alternative energy field. China has become a magnet for all ...

The government of Jiangsu, a highly industrialized province on China’s east coast, has set a goal of shutting down within three years 1,000 chemical plants that use older technology or are located near the Yangtze River. The government says its goals are reducing pollution and promoting higher-tech industries. Jiangsu will order the relocation or shutdown of chemical plants that don’t comply with safety and environmental regulations as well as plants that operate less than 1 km from the Yangtze. The measures will also affect the steel, coal, and power industries.

Shin-Etsu Chemical will invest about $990 million to expand its silicones business worldwide over the next two and half years. The Japanese firm plans to spend about $450 million to expand its silicone monomer plants in Japan and Thailand, $450 million on facilities for downstream products in six countries, and $90 million on shipping facilities and other business infrastructure. Between 2013 and 2017, Shin-Etsu’s silicone sales increased by 32%, while margins swelled by 63%. The largest silicone producer in Japan, Shin-Etsu sells the materials worldwide in powder, liquid, and rubber form. They are used in applications including cosmetics, contact lenses, and solar panels. Shin-Etsu’s bold bet on its silicone business comes shortly after it made a comparably large commitment to its polyvinyl chloride business. In July, Shin-Etsu announced that its U.S. subsidiary Shintech will spend $1.5 billion in Louisiana to expand a polyvinyl chloride plant and build facilities for the

Sumitomo has acquired a $45 million stake in JOLED, a Japanese firm that is about to build the world’s first plant to produce electronic displays via printing. Organic light-emitting diode (OLED) displays are currently produced using a vacuum deposition method that results in significant waste of expensive materials. By contrast, the printing method applies circuitry directly onto a glass or plastic substrate. Expected to come on-line in 2020 in Nomi, Japan, JOLED’s plant will be able to process 20,000 glass substrates per month.

The China National Drug Administration has approved for the first time a second-generation DNA sequencer produced by sequencing giant Illumina. The news comes as China becomes a strategically important, but tough, market for Illumina and other foreign producers of genome sequencers. The CNDA-approved device is a MiSeqDx, a type of instrument that Illumina first cleared for market launch in the U.S. in 2013. Its next-generation sequencing (NGS) capabilities mean that it conducts high-throughput DNA and RNA screenings much more quickly and cheaply than earlier types of sequencers. The firm will market the system primarily to clinical laboratories that conduct patient diagnostic tests. Saluting the news, Garret Hampton, Illumina’s executive vice president of clinical genomics, said that “more medical institutions and patients will now have access to the latest NGS technology.” The Chinese market has been growing in importance for Illumina and is now its second largest foreign market after Europe.

Mitsui Chemicals is expanding capacity in Japan and Singapore. On Jurong Island in the Southeast Asian city-state, the firm will boost by 10%, to 225,000 metric tons per year, production capacity for its Tafmer elastomer. The material is used as a resin modifier and soft-molding material in a variety of industries, including automotive and packaging. Separately, at its Ichihara plant in Japan, Mitsui will increase by 20,000 metric tons per year its production capacity for Lucant hydrocarbon-based synthetic oil. Lucant is used as a viscosity modifier in car drivelines, industrial lubricants, and greases.

“Dying to Survive,” a low-budget movie popular in China this summer, depicts a peddler of aphrodisiacs who tries to smuggle cancer drugs from India that were too expensive at home. The film’s success highlighted public discontent with drug access in China. Now the Chinese government is taking one step to address the discontent: It has launched a program to speed the review and approval of dozens of drugs sold abroad but not yet approved in China. Foreign companies that had long complained about the arduous path to product launch in China, the world’s second-largest drug market, are seeing the results. On Aug. 20, Roche saluted China’s expedited approval of Alecensa (alectinib), a treatment for certain types of lung cancer. Sandra Horning, Roche’s chief medical officer, commented that the approval “represents a significant regulatory shift, with the approval received under unprecedented timelines.” The drug was first approved in Europe just eight

Slapping a 25% tariff on $200 billion worth of Chinese imports would raise the prices of countless products and damage U.S. companies, representatives from the chemical industry told the Office of ...

The U.S. has ratcheted up the trade war with China with the release of a long list of Chinese-made commodities, worth $200 billion in total, targeted for a 10% tariff. Numerous organic and inorganic chemicals are on the list. The U.S. move is a reaction to China’s decision on July 6 to push ahead with a 25% tariff on $34 billion worth of U.S. imports, including many plastics. The Chinese action, in turn, was a response to an earlier U.S. decision to add a 25% tariff on $50 billion worth of Chinese goods. Those products were announced in two groups—worth $34 billion and $16 billion, respectively—in April and June. The U.S. says its actions aim to force China to change predatory practices in technology transfer, intellectual property, and innovation. Because China is both a major market and a key supplier, the trade row will have a profound impact on the

A long-rumored merger of two of China’s largest state-owned chemical firms seems to be moving ahead. According to the Chinese news organization Caixin, the State-Owned Assets Supervision & Administration Commission is engineering the merger of the chemical trading and production firm Sinochem with China National Chemical Corp. (ChemChina), a conglomerate that owns dozens of chemical plants. Sinochem’s chairman, Ning Gaoning, will oversee the merged company, Caixin reports. The merger is reportedly China’s condition for endorsing ChemChina’s $43 billion acquisition of Syngenta.

Shares in the Chinese lithium-ion battery maker Contemporary Amperex Technology (CATL) surged 44% on their first day of trading on the Shenzhen Stock Exchange last week. The company’s performance mirrors that of other cleantech and biotechnology firms that listed in China and Hong Kong over the past year. CATL, already one of the world’s largest producers of lithium-ion batteries, raised the funds to finance its expansion as demand for electric vehicles grows in China, it said in a filing to the Shenzhen exchange. The company picked a good time for its initial public offering (IPO), as the stock issue was priced at a healthy 23 times its annual earnings per share. Other Chinese technology firms have listed in China and Hong Kong in recent months with comparable success. PharmaBlock, a custom maker of chemicals used in pharmaceutical research and production, saw its shares hit their maximum allowed price increase for

Change is coming to another big drug company in Japan. Just weeks after Takeda Pharmaceutical struck a deal to acquire Shire for $62 billion, Astellas says it is downsizing operations in its home country, a rare move for a Japanese firm. As part of a new corporate strategy, Astellas will shutter several subsidiaries in Japan. The list includes Astellas Research Technologies, a unit employing 200 people who primarily perform preclinical research and manage the company’s lab animals; a Japanese sales subsidiary; and an employee training outfit. Astellas will offer voluntary retirement packages to employees affected by the closures. Altogether, it forecasts that 600 of its staff will opt to leave. Separately, Astellas is selling Astellas Analytical Science Laboratories, an internal testing lab, to the analytical services firm Eurofins. About 140 employees are involved. Eurofins plans to upgrade the labs so they can offer services to other customers as well as

A benzene tank exploded on May 12 at the Secco Petrochemical facility in Shanghai, killing six people. According to the Shanghai Administration of Work Safety, the six were employed by a contractor, Shanghai Aijinke Engineering Construction Service, and were repairing the tank. The cause of the explosion remains unclear, the safety administration says. Sinopec became the sole owner of Secco last year after its 50% partner BP sold its stake for $1.7 billion. Centered around an ethylene cracker with an annual capacity of 1 million metric tons, Secco produces a range of basic chemicals.

The Japanese ink and pigment maker DIC is working with Checkerspot, which recently emerged from the Illumina Accelerator business incubator, to develop new polyols. The two will focus on polyol-based adhesives, coatings, inks, and lubricants using Checkerspot’s research facilities in Berkeley, Calif. Checkerspot uses genomics to develop molecular building blocks found in nature but not yet in industry.