Service provider Saltigo is reinforcing its position in the stabilising fine chemical custom manufacturing industry by investing in the expansion of its German facility.
The company, a spin-off of Lanxess, spent around €10m to convert an existing plant at its Leverkusen site into a multipurpose current Good Manufacturing Practices (cGMP) facility for the production of active pharmaceutical ingredients (APIs) and intermediates.
The firm said it was experiencing a high demand for this service and that the additional cGMP capacities will be available by mid 2007.
"Making use of an existing plant approved several times by the US Food and Drug Administration (FDA) is allowing us to respond to this demand quickly and with a relatively low level of investment," said Axel Westerhaus, Saltigo's managing director.
European fine chemical companies have gone through a difficult time in the last five years, as they have been struggling to deal with overcapacity, competition from emerging markets - particularly from Asia - and regulatory burdens. As a result, most of the large firms are undergoing important change.
However, there is some positive news on new drug approval, according to recent research, which means the outsourcing of fine chemical intermediates and active pharmaceutical ingredients will pick up, though the market is unlikely to recover to previous levels.
A recent market report from Frost and Sullivan expects the European fine chemicals market, which earned revenue of $10bn (€8bn) in 2005, to reach $13bn in 2009.
The industry could achieve growth of five per cent a year or more, creating at least $500 million a year of additional sales.
This means more business for custom manufacturers, who are now able to make targeted investments to respond to increasing demand.
Saltigo's enhanced production complex will include four modular multi-purpose units, one of which is to be used exclusively for the production of intermediates.
The total annual capacity will be more than 200 metric tons and the system will allow for the use of reaction units between 2.5 and 8 cubic metres, made from various materials.
The company said the move is part of a carefully planned investment strategy to make itself even more attractive to this recovering market.
The firm added that alongside these general cGMP technologies, customers will also have access to challenging chemistries under cGMP conditions, including phosgenations, high pressure hydrogenations, and fluorinations.
"In the future, our main aim will be to consistently expand operations in the areas of pharmaceuticals and specialty chemicals, since these are the cornerstones of our market," said Westerhaus.
Saltigo has recently intiated other investement projects in several of its plants, including an upgrade of small-volume production and a new low temperature unit for the cGMP facility.