Akzo integrates Diosynth and Organon

Akzo Nobel has said it intends to integrate its two human pharmaceutical businesses, Diosynth and Organon, into one operating business unit.

The integration combines key competences of Diosynth and Organon in order to provide a targeted approach for the Company's human pharmaceutical activities. To support this development, Akzo Nobel intends to invest €60m in Oss, the Netherlands, to build a state-of-the-art parenteral production facility. A new biotechnology research facility in Cambridge, Massachusetts, US, will also be created.

Toon Wilderbeek, member of Akzo Nobel's board of management said: 'This is a logical move, following initiatives to improve profitability and a strategic shift to actively seek partnerships. It is not primarily about costs, and it is much more aimed at building the business in a way that will move us forward.'

The integration of the key competences of Diosynth and Organon offers a number of benefits:

• it will leverage its combined know-how, technologies, people and facilities to capitalise on market opportunities.

• reduce complexity and thus support the strategy of partnerships in development and marketing and sales.

• combining forces will bring optimised investment decisions and strengthen management of the entire supply chain. It also allows the Company to combine biotechnology activities in Organon and Diosynth into one platform.

The Cambridge location has been chosen to create the new biotechnology research facility because of its high concentration of medical research institutes, universities, and hospitals. The biotechnology industry is also well established in the area.

The investment in the new parenteral facility confirms Akzo Nobel's commitment to its pharmaceutical activities and the importance of the production site in Oss. Construction of the facility is expected to start early in 2005. It will be operational in 2007.

It is expected that the integration will result in 60 redundancies, roughly 50 of which will be in Oss and the remainder in Roseland, NJ, US.

As of January 2005, the two entities will operate as a single business unit called Organon. Diosynth's third party business will remain a reliable partner for its customers and will continue to trade under the name Diosynth.