Aesica looks to Europe and US for expansion

As featured in The Journal 12/05/10

Aesica has revealed plans to make two company acquisitions by the end of 2010.

The firm, which has a head office in Newcastle’s Quorum Business Park and a site in Cramlington, is looking to build on the best year in its history as it pursues plans to treble in size within three years.

Chief executive Robert Hardy said: “By the end of the year, we hope to have made at least two acquisitions, one in Europe and one in the US. For a long time, the big pharmaceutical companies were outsourcing the chemical side of their business, but in the last three or four years there’s been a push to outsource more work in formulation, and we’re hoping to take advantage of that.”

Aesica’s latest expansion plan comes after a year which saw its turnover rise by 57% to £90m from £56.3m in 2008 and profits rise to £15m from £2.2m a year earlier.

Mr Hardy said: “Last year was a great year. It was the best year in our history from a profitability point of view, and this year is on course to be ahead of that. There was a world downturn but the pharmaceutical industry has remained pretty stable.”

Aesica supplies active pharmaceutical ingredients, formulations and custom synthesis products to the global pharmaceutical and biotechnology industries. It was formed in 2004 after a management buy-out of the former BASF site in Cramlington.

It bought a chemical manufacturing site in Enfield, Middlessex, in 2006 from Merck Sharp Dohme, and another from Abbot in Queenborough, Kent, a year later. It employs around 160 staff at its two North East sites and 700 company-wide.

Mr Hardy said: “We’re about four times the size that we were in 2004, with four times as much turnover and four times the staff. We’ve got plans to treble that by 2012.

“The whole pharmaceutical industry is beginning to outsource. Rather than do manufacturing and developing themselves, they outsource to people like ourselves. We’re looking to invest in the research and development side of the business, which we do at Cramlington. We’re also keen to acquire those organisations on the formulation side to promote innovation and gain access to other pharmaceutical companies.”

The company brought in former Intercare Group CEO John Parker as a non-executive chairman and Nick Jones as chief financial officer last summer, while former CFO Adam Sims became the commercial director.

Mr Hardy said: “The change worked very well. We brought in some experience we thought we needed for expansion and it helped us to develop our strategy.”

While the company is eyeing expansion in the US and Europe, it says this does not affect the North East side of the business.

Mr Hardy said: “Most of the companies up here came up when there were grants in the 1970s, the big pharmaceutical firms such as Merck, Glaxo and Pfizer. A lot of these big companies aren’t here anymore. It’s the supply chain that’s still based up here, but the names have changed frequently.

“I think we have a full offering for the chemistry side of the business, which is based in the North East. The facilities we’re looking for outside the UK will be on the formulated side of the business, and the chemistry side would stay in the region.”


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