Lure of drugs turns Hoechst's head
15 Jan 2000
Jurgen Dormann, chairman of Hoechst, has signalled a dramatic reversal in his plans for the company by abandoning plans to float off the drugs division, Hoechst Marion Roussel, which provided by far the largest proportion of lacklustre results (see right). Dormann intends to reposition Hoechst as a pharmaceuticals and life sciences company.
The announcement contradicted Dormann's indication at last year's annual results conference that seeking a listing for HMR would be a priority. He now believes that it would be better for Hoechst's shareholders if HMR remains within the company fold.
`Three years ago we set about making our company more flexible,' says Dormann. `Since then, the outlines of a new Hoechst have become discernible, characterised by focus on the innovative growth markets of health care and and agriculture/nutrition, and the expansion of biotechnology as a source of innovations.' New moves in the drugs division include a renewed drive to launch branded and patented drugs `rapidly and extensively onto the markets in various countries'; the foundation of a drug development centre in the US; and a biotechnology centre in Cambridge, Massachusetts, focusing on decoding the genes responsible for conditions like osteoporosis.
Hoechst's non-life sciences businesses are increasingly the subject of joint ventures. Its speciality chemicals operations are being merged with those of Clariant; polypropylene is the subject of a joint venture with BASF; and talks are underway to link up polyethylene with BP Chemicals. PVC was spun into a non-consolidated joint venture with Wacker Chemie in 1993; Hoechst is currently discussing the transfer of its remaining PVC-related operations, chlorine and vinyl chloride production, into this venture.
{{Hoechst, by sector (DM millions)
Sector Operating % profit change
Pharma 2249 +217Agr Evo 232 +47Basic chems 727 -50Specialities 691 +52Trevira 84 -84Plastics 212 -29Tech polymers 195 N/A}}
