Altana AG

views updated

Altana AG

ORIGINS IN THE 19TH CENTURY

EMERGING FROM THE VARTA BREAKUP IN 1977

BECOMING A FOCUSED CHEMICALS BUSINESS

PRINCIPAL SUBSIDIARIES

PRINCIPAL DIVISIONS

PRINCIPAL COMPETITORS

ORIGINS IN THE 19TH CENTURY

Altana was created as part of the breakup of the Varta AG conglomerate in 1977. The new company took over Varta’s chemicals, pharmaceuticals, food, and cosmetics operations. Yet Altana traces its own history back to 1873, when Dr. Heinrich Byk founded a chemicals factory in Berlin. Byk began producing chemicals for both industrial and commercial markets, and over the following decades evolved into the basis of the later Altana Chemie’s Additives & Instruments division. At the same time, Byk’s company also began developing pharmaceuticals. This led to the development of euphyllin, used to treat bronchial ailments.

Byk died in 1915. By then, Byk had developed a close working relationship with the Gulden family, which operated the paint company Leibziger Farbwerke. In 1917, the Byk business was merged with the Gulden family operation, and changed its name to BYK-Guldenwerke Chemische Fabrik AG. The merged company continued to grow through the 1920s, expanding its range of chemical operations to include cold asphalt in 1929. In 1931, the company bought Ernst Lomberg-Photochemische Produkte, a company originally founded in 1892. The company added the Lomberg name to its own following the acquisition. The company’s coatings business took off in 1935, when it launched the first in the longstanding Anti-Terra line of wetting and dispersing additives.

The war years nearly ended the company’s existence, however. Following the outbreak of the war, BYK’s business suffered greatly, and only the intervention of Günther Quandt, chairman of the future Varta AG, saved the company. In 1941, Quandt bought up majority control of the BYK chemicals business. Nonetheless, bombing raids through the end of the war succeeded in destroying some 90 percent of BYK’s headquarters and production facilities.

Following the war, BYK moved its headquarters to Constance, in what became West Germany, and, renamed as BYK-Gulden, relaunched production. The postwar period saw a dramatic rise in the Quandt family’s holdings, despite Günther Quandt’s 18-month internment as a “mitlaüfer” (Quandt’s ex-wife married Joseph Goebbels in 1931; Quandt and his two sons all became members of the Nazi party in the 1930s, and Quandt’s main businesses made use of slave labor during the war). When Günther Quandt died in 1954, his sons Herbert and Harald took over at the head of the family’s holdings. Over the next two decades, the Quandt family’s operations, which officially adopted the name Varta AG only in 1973, swelled to a conglomerate of more than 200 companies involved in a wide range of industries.

BYK-Gulden also grew strongly during this period. The company moved its headquarters to Wesel in 1962, where it built new, larger production facilities for its own steadily diversifying product line. The company also began developing international operations, notably establishing an additives production subsidiary in the United States in 1964. Also during the 1960s, other members of the future Altana joined the Varta group, including Rhenania GmbH, acquired in 1969, which produced coatings for can and foil packaging. During this time, BYK-Gulden merged its additives business with the pharmaceuticals operations of Mallinckrodt Inc., creating the joint venture BYK-Mallinckrodt Chemische Produkte GmbH.

EMERGING FROM THE VARTA BREAKUP IN 1977

Into the late 1970s, however, the Quandt family had decided to refocus Varta around the production of batteries. In 1977, therefore, the group was broken up into three new companies. Majority control of each company was then turned over to different members of the Quandt family. As such, Susanne Klatten, granddaughter of Günther Quandt, became majority shareholder in the new Altana, regrouping Varta’s pharmaceuticals, chemicals, food (or dietetics, specializing in infant formulas), and various other holdings. Most of these companies were sold off by the end of the 1970s.

The BYK operations, together with the group’s pharmaceuticals business, played the major role in Altana’s development over the next decade. The company had continued to find success with its drug development, with such strong-selling products as Riopan, an ulcer treatment, introduced in 1954, and Ebrantil, a high blood pressure medication, released in 1976. In 1979, BYK-Gulden built a new production site in Singen that specialized in the development of new active substances. This effort later led to the development of the group’s blockbuster drug, Pantoprazole, a treatment for gastrointestinal disorders that became a huge international success for the company following its launch in 1994.

COMPANY PERSPECTIVES

Our values and our know-how have made us into what we are and show how ALTANA is different from other companies. In the past years ALTANA has enjoyed increasing success as an international and innovative company in the fields of pharmaceuticals and specialty chemicals.

BYK also continued to expand its chemicals side, launching a subsidiary in Japan in 1980, and moving its U.S. operations to a larger facility in Connecticut in 1981. The company also established chemicals subsidiaries in France. In 1984, the BYK-Mallinckrodt joint venture was abandoned and a new company, BYKChemie GmbH, was established as Altana’s fully owned additives subsidiary. The following year, BYK-Chemie expanded through the purchase of a stake in Labotron, an additive measuring instruments manufacturer in Gerestsried, Germany. Altana acquired full control of Labotron in 1986.

These acquisitions paved the way toward the creation of a new dedicated chemicals division, called Altana Chemie, in 1986. The new division grouped BYK’s operations in the United States, Japan, and France together with BYK-Gardner and the coatings operation, Rhenania. By then, Altana had added a new business area, through its purchase of software developer DAT in 1985.

The company’s chemical division continued to grow through the end of the decade, notably through the purchase of instruments producer Gardner Lab in the United States in 1989. That company was placed under BYK-Labotron, which took on the new name of BYK-Gardner. The company also expanded its chemicals operations into a new product category, through the acquisition of Dr. Wiedeking, based in Kempen, Germany. The Wiedeking company was one of the leading European specialist producers of wire enamels for the electrical industry. The company boosted its new enamels division again in 1992, when it acquired Italy’s Deatech.

KEY DATES

1873:: Heinrich Byk founds chemicals factory in Berlin.
1907:: Company achieves first pharmaceuticals success with euphyllin, for treatment of respiratory problems.
1917:: Byk merges with Leibziger Farbwerke and becomes BYK-Gulden.
1931:: Company acquires Ernst Lomberg Photochemische Produkte.
1941:: Günther Quandt buys BYK-Gulden, which is placed in Varta AG conglomerate.
1946:: BYK-Gulden moves headquarters to Constance, Germany.
1962:: BYK-Gulden moves headquarters and production to Wesel.
1964:: Company establishes subsidiary in the United States.
1977:: Breakup of Varta creates new company, Altana, with chemicals, pharmaceuticals, food, and other holdings.
1979:: Altana launches production of active substances in Singen.
1980:: Altana launches subsidiary in Japan.
1986:: Company acquires Labotron, a maker of additive measuring instruments, and creates dedicated chemicals division, Altana Chemie.
1989:: Altana acquires Gardner Lab in the United States; enters production of wire enamels with purchase of Dr. Wiedeking in Germany.
1992:: Company acquires wire enamels specialist Deatech of Italy.
1995:: Altana restructures around core of chemicals and pharmaceuticals; acquires DS Chemie of Bremen, Germany.
1997:: Altana launches production in Shunde, China.
2001:: Altana acquires Italy’s Syntel SpA.
2003:: Company restructures operations, creating two companies, Altana Chemie AG and Altana Pharma AG.
2005:: Company announces plan to sell Altana Pharma and refocus around Altana Chemie; acquires Eckart GmbH and adds production of metallic-effects pigments and metallic printing inks.
2006:: Company sells Altana Pharma Nycomed for EUR 4.5 billion; acquires Rad-Cure Corporation.

BECOMING A FOCUSED CHEMICALS BUSINESS

Altana Chemie’s product diversification continued into the 1990s, as it entered the wax additives sector through the purchase of Cera Chemie BV, based in the Netherlands. The company next boosted its packaging coatings wing, buying the French operations of Rhenacoat.

The worldwide success of Pantoprazole, and the strong growth of the Altana Chemie division, led Altana to restructure its operations in 1995. In that year, the company sold its dietetics and software divisions, regrouping around a core of pharmaceuticals and chemicals.

The chemicals division maintained its steady growth through the 1990s. Acquisitions remained an important part of Altana Chemie’s expansion through the decade and into the mid-2000s. In 1995, for example, the company acquired DS-Chemie, based in Bremen, Germany, which produced sealing compounds. The following year, Altana Chemie added Spain’s La Artistica, another sealing compound producer, and the United States’ PD George Company. The chemicals division also expanded its operations deeper into the Asia-Pacific region, adding sales offices in China, Taiwan, and Malaysia. By 1997, Altana Chemie had launched production in the Chinese mainland, creating Shunde-Rhenacoat, based in Shunde, to produce special coatings for the packaging market.

Altana also deepened its penetration of the electrical sector, buying Italy’s Camattini, and Tongling Siva Insulating Materials, in China, in 1998. The company then boosted its sealants operations, taking over Germany-based Terra Lacke in 2000. The company further developed its Chinese presence through the creation of BYK-Chemie Tongling in 2001. In that year, the company also acquired Italy’s Syntel SpA, a wire enamels producer, which was subsequently merged into Deatech in 2003.

By then, Altana Chemie had regrouped into three primary business units, namely Additives & Instruments, Coatings & Sealants, and Electrical Insulation. Following that reorganization, the company formally changed the name of its chemicals operations to Altana Chemie AG, while its pharmaceuticals businesses were regrouped under the newly named Altana Pharma AG.

Altana Chemie maintained its steady expansion into the mid-2000s. In 2003, the company bought Beck Electrical Insulation and Beck India, the former based in Hamburg, Germany, the latter in Pune, India. The following year, the company opened its fourth manufacturing site in China, launching Altana Electrical Insulation Zhuhai. The group had also been developing a new sophisticated additives technology, using nanotechnology to develop barriers to prevent gas diffusion in plastic. This effort came to fruition in 2004, with the launch of the industry’s first nano-additives in 2004.

The year 2005 represented a turning point for Altana Chemie. In August of that year, the group reached an agreement to acquire Furth, Germany-based Eckart GmbH. The addition of Eckart enabled Altana to enter an entirely new product segment, that of metallic-effect pigments and metallic printing inks. The purchase, completed in October 2005, also added more than EUR 300 million to the division’s revenues, enabling it to top the EUR 1 billion mark for the first time.

The Eckart purchase also led holding company Altana AG to announce its decision to redevelop its two primary divisions as independently operating companies. This proved a prelude, however, to the company’s announcement in 2006 that it intended to sell its pharmaceuticals division and instead refocus around a new core of specialty chemicals manufacturing. Part of the motivation behind this change of strategy was Altana Pharma’s relatively shallow new drug pipeline and its over-reliance on Pantoprazole. Yet that drug’s patent was set to expire by 2009. With only limited prospects for a new blockbuster in its lineup, Altana AG decided the time was right to narrow its focus. In October 2006, the company announced that it had agreed to sell Altana Pharma to Nycomed, in a deal worth EUR 4.5 billion.

In the meantime, Altana had taken steps to boost its chemicals operations, and particularly its new inks division. In March 2006, the company agreed to buy Rad-Cure Corporation, which specialized in the manufacture of overprint UV coatings, as well as adhesives for the packaging sector. This purchase followed on the acquisition of another prominent inks and pigment group, Kelstar. The newly refocused Altana had emerged as a global leader in each of its specialty chemicals markets.

M. L. Cohen

PRINCIPAL SUBSIDIARIES

ALTANA Chemie AG; ALTANA Electrical Insulation Co. Ltd. (China); ALTANA Inc. (U.S.A.); Beck Electrical Insulation GmbH; Beck India Ltd.; BYK-Chemie (Tongling) Co. Ltd. (China); BYK-Chemie Asia Pacific Pte. Ltd. (Singapore); BYK-Chemie GmbH; BYK-Chemie Japan KK; BYK-Chemie USA Inc.; BYK-Gardner GmbH; BYK-Gardner USA; DS-Chemie GmbH; ECKART America L.P.; ECKART GmbH & Co. KG; Kelstar International Inc. (U.S.A.); Rhenania Coatings GmbH; Shunde-Rhenacoat Coating Co. Ltd. (China); Terra Lacke GmbH; The P.D. George Company (U.S.A.); Tongling City (China); Tongling SIVA Insulating Materials Co. Ltd.; Zydus ALTANA Healthcare Private Ltd. (India).

PRINCIPAL DIVISIONS

Additives & Instruments; Coatings & Sealants; Electrical Insulation; Effect Pigments.

PRINCIPAL COMPETITORS

Sun Chemical Corp.; Liksin Corp.; Environments Inks Encoding; Belcar S.A.; Kohl and Madden Inc.; Flint Group; Toyo Ink Manufacturing Company Ltd.; Sakata Inx Corp.; Tokyo Ohka Kogyo Company Ltd.; SICPA S.A.