After 65 years Buckman adjusts its brand

Buckman Laboratories has announced that it will 'rebrand' itself, shed the 'laboratories' and become Buckman. In an announcement which resembles a rite of passage, Buckman has decided to shorten its name and recognise, 'Its growth from a small laboratory selling a few chemicals to a global supplier .......... ' C'est la vie. For the skeptic, this is just one of those meaningless and costly exercises. For the branding enthusiast it is a chance to refresh the message given to customers.

Buckman is undergoing changes and was a fully grown company many years ago. In the last few years it has faced challenges so perhaps now is the time to go for it and drop the Laboratories! Most of us knew the company as Buckman anyway so loosing the long name is a help!

Even "The Chemical Company", BASF finds the going tough - what of the rest?

BASF announced that it will temporarily close 80 plants world-wide and cut production at a 100 more in a move which will affect over 20,000 workers over the next two months.  In effect, BASF will reduce output by 25%.

Three weeks ago, BASF said it was coping with declining demand and that 2008 sales would top last year's EUR 97.5 bn with operating earnings matching 2007 (EUR 7.32 bn).  All has changed.  BASF has now issued a profits warning for this year. 

In the view of the FT and industry experts, the move by BASF is a pre-cursor to a huge bout of restructuring among Europen companies, including job cuts and factory closures.  

Where does this leave the paper chemicals industry?  

For the stong companies:

• BASF is in the process of acquiring Ciba on the wave of their gloomy announcements.  So, tough times for Ciba under their new masters.  
• Kemira - has recently announced significant lay-offs and a restructuring programme.
• Ashland and Hercules are well placed to take advantage of the current climate, further  investing in Europe would be folly, but they could help in the market consolidation.  However, a recent Forbes.com article puts Ashland in a different light - Trashland!
• Dow Chemical - announced last week that a fall in demand would force them into a restructuring before year end.

Then there are the question marks:

• Nalco - quiet at the moment but in need of a freshening up.  Their cost-cutting waves have left them rather thin on the ground.  Rumours abound.
• Clariant was struggling before the economic crisis - time to make some significant strategic and tactical moves? Don't hold your breath, but desperate times require desperate measures.  The share price is moving close to being considered a 'penny stock'.  Their leading global paper group (technical and manufacturing) in the UK is on schedule to shut before year end in what appears to be an attempt to protect their high-cost Swiss base.  A good move when the Swiss franc gains against sterling?!
• Eka Chemicals - solid in their protective Akzo Nobel net but again, the economic crisis may force some moves affecting paper chemicals which is not core business for the mighty Akzo.  The inability to sell National Starch has been a recent issue.
• Buckman - recently there has been news that this smaller company has struggled, but it is not beyond them to find an innovative way forward.  They are more agile than the larger companies.

As we have stated many times in this weblog, the Chinese paper chemical companies are well positioned to take advantage of the Chinese growth market and further squeeze the sluggish European and North American manufacturers, cutting down their options to show any future growth.

Difficult times, for sure, but there are opportunities for the sharp strategic thinkers.

Buckman USA to move leather technologies into its performance chemicals division

Effective 1st October, 2008, Buckman USA (Buckman Laboratories Inc) will incorporate the activities of their leather technologies group within the performance chemicals division.

This move affects only the USA domestic market, and has no effect on other regions of the world.

The intention stated by the company is to take advantage of complementary technical, product and sales expertise. To the outsider, this looks like a 'cost-saving' opportunity.

Buckman Laboratories to close library in Memphis

Buckman Laboratories, a successful private-owned paper chemicals company has decided to cahnge how it does some things and do away with its famous library in Memphis. The news feed states that:

Buckman Laboratories is eliminating 23 jobs, but it's not because of the economy.

"Over the last few years, we've grown from $330 million to $550 million (in sales) and done it profitably," said Lela Gerald, spokeswoman for the Memphis-based chemical manufacturer. "There are new things we need to be doing and old things we don't need to be doing."

For example, Buckman is cutting its library staff from four to one and using marketing firms instead of having an internal operation because of the need for ad agency help, Gerald said.

Buckman has 1,500 employees worldwide including 300 in Memphis.

Some additional comments are given in a Memphis Public Library blog.

Bromine Activated Chloramine - Buckman vs BCL

In an interesting patent case, Bromine Compounds Limited (BCL) contested Buckman Laboratories Pty Ltd, South Africa's right to use 'bromine activated chloramine' as a biocide in the manufacture of paper - marketed by BCL under the trademark of 'Fuzzicide'. The patents were filed by BCL a daughter company of Israel Chemicals Limited (previously known as Dead Sea Bromine Group), in a number of countries.

It all started in March, 2005 when BCL instituted proceedings against Buckman Laboratories in South Africa for a patent infringement arising out of Buckman’s use of BCL's proprietary technology at several paper mills in South Africa.

BCL's press release (Nov 2, 2006) states that, 'In its counterclaim, Buckman admitted that the invention falls within the scope of the patent; however, Buckman argued that BCL patent
lacked novelty. On July 29 2006 the court rejected Buckman's argument, and further ordered that Buckman cannot use their competing process, and an inquiry into the damages suffered by BCL as a consequence of the infringement is to be held.'

Buckman requested leave to appeal which was opposed by BCL but upheld and the contest ended up in the Supreme Court of Appeal of South Africa where the following order was made (details are available on SAFLII):

a) The appeal is upheld with costs including the costs of two counsel
b) The order made by the court a quo is replaced with the following order:
(i) The plaintiff's (BCL) action is dismissed with costs including the costs of two counsel
(ii) The defendant's (Buckman) counterclaim for the revocation of SA Patent 92/4018 is granted, and subject to what is ordered in subparagraph (iii) below, the patent is revoked
(iii) The revocation order granted in subparagraph (ii) is provisional. It will become fully operative in respect of the patent concerned, if the patentee does not within one month file notice of an application to amend such patent, or if having filed such application, the patentee withdraws it. If an application as aforesaid is made and not withdrawn, it shall be decided at the hearing of such application whether or not the revocation order is to be put into operation.
(iv) The plaintiff (BCL) is ordered to pay the defendant's (Buckman) costs in respect of the
counterclaim including the costs.

The text of the appeal judgment makes interesting reading and this case raises questions regarding how many 'articles of commerce' are being patented for uses where the 'inventive step' is difficult to justify. The issue is usually that once a patent examiner has ruled that a patent is acceptable, it is very expensive, and risky to challenge the ruling and so nothing is done. It is more likely that something will happen when a company decides to enforce a patent and the defendant stands his/her ground and puts up a good defence.

Bromine activated chloramine (BAC) technology is marketed as Deilurit by BK Giulini and Spectrum XD3899 by Hercules with the latter having success in the paper industry. The ruling only covers the South African patent - should the remaining patents be challenged? Ammonium bromide mixed with sodium hypochlorite.

Cellulases in bio-refining

Doug Yoder of Buckman makes some comments on the commercial use cellulases in bio-refining, especially in mills which are 'refiner limited'.