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Ashland predicts ISP buy will accelerate pharma unit growth

By Nick Taylor , 17-Nov-2011

Ashland expects integration of ISP and demand for pharma ingredients to drive “accelerated growth” in the next few years.

In August Ashland closed its $3.2bn (€2.4bn) acquisition of ISP to expand in the pharmaceutical ingredient sector. At an analyst day this week Ashland predicted integration of ISP will see growth to 2014 outstrip performance in recent years.

Some of the accelerated growth is really driven by the combination of the two businesses. We have a much stronger channel, as an example, in pharmaceuticals where we now have created a lot more leverage in the business”, John Panichella, president of Ashland Specialty Ingredients, said.

Since buying ISP Ashland has combined the business with its existing functional ingredients unit. The new division, called Ashland Specialty Ingredients, is expected to drive growth at the company.

Given the strength of the ISP and functional ingredients combination, I see our strongest opportunities in the high margin personal care and pharmaceutical markets”, James O’Brien, CEO of Ashland, said in a conference call with investors following fourth quarter results.

Focusing efforts

To take advantage of these opportunities Ashland is “focusing a lot of [its] efforts on the pharmaceutical, personal care and coatings market that make up the majority of our earnings”, Panichella said.

Speaking to in-PharmaTechnologist in August Panichella said combining the businesses will make ordering easier for the “very large number of customers” that worked with Ashland and ISP. Further benefits of the union are now being realised.

Ashland launched an HPMC (hydroxypropylmethylcellulose) facility in our dual Belgium plant about two years ago and the ISP acquisition now gives us almost [two and a half] times the amount of commercial resources selling into pharma”, Panichella said.

In the past two days shares in Ashland have risen six per cent.

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