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Ashland completes ISP takeover and predicts customer benefits

By Gareth MacDonald+

25-Aug-2011

US chemicals maker Ashland says completion of ISP takeover means simplified supply chains for drug and cosmetics industry customers.

The $3.2bn (€2.2bn) acquisition, announced in June , completed yesterday in a deal that saw ISP become part of Ashland Aqualon Functional Ingredients, which has been renamed Ashland Specialty Ingredients.

Kentucky, US-headquartered Ashland said the move doubles the size of its highest-margin business unit and will mean more than half of its revenues come from outside North America. The firm also predicted that the new business will soon contribute around half of its EBITDA.

Ashland Specialty Ingredient’s new president, John Panichella, told in-Pharmatechnologist.com the takeover should streamline supply chains for a number of players in the pharmaceutical and cosmetics manufacturing industry.

A very large number of customers were buying from both of us and now they only have one call to make. The transaction should simplify and ease the process for customers.”

Panichella also moved to reassure existing ISP customers, explaining that there will be no change in product quality or manufacturing processes and that the Certificates of Analysis (CoA), labelling and all production specifications for chemicals will remain in place.

Our goal is for the transition to be accomplished with no disruption in customer service, product quality or supply,” he continued, adding that while no immediate changes in distribution operations are planned “a complete analysis…will be conducted to see if there are any areas that could be organized more efficiently.”

Integration process

Panichella also set out how the ISP integration process will work, explaining that a key motivation for the deal had been the lack of manufacturing capacity overlap between the two organisations.

“When you look at the plants, ISP brings strength in acetylene polymers and production from maleic anhydride and methyl vinyl ether, while Ashland holds strong cellulosic production capabilities. While we play in the same markets we come at the market from different directions.”

He also confirmed that there will be no immediate changes in the way the quality of manufacturing operations are managed “because we recognize that our customers rely upon the quality of the products we manufacture. Maintaining the high quality of our products is paramount.

If a change should occur that would impact customers Ashland will follow U.S. Food and Drug Administration notification of change guidelines.”

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