Looking for an edge

As Informex opens, a competitive market may make it hard for specialty chemical manufacturers to pass on their high energy and raw materials costs. Buyers of ingredients for custom chemicals are looking at their options.

By Mike Verespej -- Purchasing, 1/13/2005

You've just been given the task of finding a supplier for a key ingredient for a new custom chemical product that your company hopes to bring to market. There are a number of avenues available for you to consider.

But, if you're a regular attendee of Informex, the North American trade show for the custom and fine chemicals industry, you probably already have a hip pocket full of contacts.

Indeed, the trade show, now in its 21st year, acts almost like a global matchmaker for companies who need to find companies who make that custom chemical or the equipment needed to process it. That's especially so since the show moved to Las Vegas (from New Orleans) last year.

That improved access for companies in the Far East increased both the global diversity of the companies in attendance and the representation from the biotech industry because of its heavy presence on the West Coast.

Add in the traditional industries at the show—cosmetics, flavors and fragrances, soaps and detergents, household products, agricultural chemicals, pharmaceuticals and dyes—and Informex has become a virtual magnet for buyers, who comprise the largest group of the show's 4,000-plus attendees.

"A company like Procter & Gamble might come here to find an ingredient maker for a product that they plan to produce," says Diane McMahon, vice president, commercial development. "We have nearly 500 exhibitors who make everything from batch reactors, machines, process machinery and custom chemicals such as the ingredient that causes soaps to bubble."

But Informex 2005, to be held in Las Vegas Jan. 17 to Jan. 20 at the Sands Expo/Venetian Hotel, is more than just an international showcase for exhibitors—more than one-third of them from Europe and Asia—hawking their wares and capabilities. It also offers a compelling lineup of educational workshops designed to keep attendees on the leading edge of industry trends, the newest developments in custom manufacturing, the latest technological advances, shifts in buying patterns, what the competition is doing, the latest chemistries and what they can license.

That's critically needed knowledge to both manufacturers and users of specialty chemicals as the expectation for 2005 is that rising raw material costs will squeeze end-product market prices.

Indeed, makers of specialty chemicals—especially chemical additives and catalysts—can expect tough competition in an expensive energy and raw materials environment. In addition, because many specialty chemical companies target specific markets, they can be affected more by declines or cyclicality in the markets they target and not be able to pass on raw material price increases over the shorter-term.

That's why the show, developed by a 23-member planning committee of industry executives has eight meetings before nailing down the final agenda.

This year's keynote speaker, Dr. James Canton, chairman and CEO of the Institute for Global Futures, will address Informex on Monday evening. His focus: The Innovation Economy and how that will impact the world and the future of business.

Dr. Canton's speech will complete a full day of activities that precede the opening of the exhibition floor the next day.

• There's a half-day educational workshop on both the use of technology to rapidly optimize chemical reactions in R&D labs and on the newest advances in both hardware and software in that arena, complete with case studies from Merck, Pfizer and Hoffman-LaRoche.
• An all-day Exhibitor & Technologies Showcase in which 110 exhibitors provide sneak previews of what's to come with scheduled 15-minute presentations about their products and services.
• Network roundtable discussions on:

1. The use of nanotechnology and structured metals in life sciences.
2. The new Food & Drug Administration (FDA) initiative—announced in November—for greater regulation of dietary supplements and how that will impact the type of ingredients you use and buy for those nutraceuticals.
3. What new opportunities still exist for engineered polymers and how companies can use these low-cost fillers to reduce costs.
4. Effective methods for doing business or for sourcing materials and goods in Eastern Europe.