Sigma-Aldrich increases profit and sales
Positive organic growth in research and SAFC businesses
Sigma-Aldrich increased its profit by 1% to US$94m in the fourth quarter of 2010 on sales of $582m, up from $573m in the same period in 2009. For the full year, the US life science and technology group reported a profit of $384m on sales of $2.3bn.
Fourth-quarter sales showed positive organic growth in both the Research and SAFC businesses. SAFC achieved the best quarterly sales in 2010, boosted by sales of materials and precursors for semi-conductor and LED applications as well as in industrial cell culture media for biological drugs.
‘SAFC had a good year with growth of 9.2%,’ said SAFC president Gilles Cottier. In terms of percentages, growth in Q4 was lower than the other three quarters, but this was due to the disproportionate effect of sales in Q4 2009 relating to H1N1, he explained.
Sales of raw materials and industrial media for biologicals were very strong, and growth was also boosted by some of the capabilities in which the company invested in the past few years, notably viral particle technology and high potency manufacturing facilities. Intermediates also performed well, partly due to the economic recovery, but also to growth in sectors like diagnostics.
SAFC is currently building facilities in China and India that are due for completion in the third quarter of 2011. The will be dedicated to sourcing, QC and packaging of chemical intermediates to supply the local markets.
‘This will support our business locally in these markets to help us grow them and give us better control over and better understanding of the quality and the supply chain of these materials that we are will source into China and India,’ said Cottier.
Although still in its early stages, the licensing of the ZFN technology acquired in 2009 is going well, although the sales volume directly associated with it is minimal at present.
‘We are starting to license the technology to key major players and we have many more in the pipeline,’ said Cottier. ‘We are looking at building around this technology – not just to sell the enzymes and the custom cell lines but to build an entire platform of innovative new cell lines for bioproduction with the media that will be developed and optimised for them. ‘But it is not a short-term project – it is a multiyear project that will probably reap most of the benefit over the next two or three years. It is part of our long-term investment in biologicals.’
The area of the business facing the greatest challenges is the general small molecule API capability. ‘In terms of small molecule fine chemicals players, I think there are still too many of them and I don’t think they are all going to survive,’ Cottier stated. ‘There is too much capacity so unless you have a differentiating capability it is going to be a tough game because it will be a cost game especially in the US and Europe.’
