Media Coverage
Fine Chemicals Producer Ash Stevens: Making Quality an Issue
Chemical Week
March 22, 2010
By Alex Scott
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Privately owned Ash Stevens (Detroit, MI), a producer of pharmaceutical fine chemicals, says it has enjoyed a lift in sales during 2009 despite the tough global operating environment. Sales have been boosted by the return of some of the company’s former U.S. pharmaceutical customers after their concerns about the quality of supplies from contract manufacturers in developing countries, Ash Stevens says.
Ash Stevens says the trend may have been caused by recent crises in the Chinese chemical supply chain with cases including the contamination of the blood-thinning drug heparin, and the introduction of melamine into foodstuffs. A real concern with both of these cases is that they were “not the result of accidental contamination but willful” behavior, says Ash Stevens’ CEO Stephen A. Munk.
Munk predicts Ash Stevens will have an “outstanding year” in 2010. The company recorded sales in 2007 of about $11 million, rising to about $13.5 million in 2008 and to roughly $20 million in 2009. Staff numbers have also been increasing: Some 10 years ago the company had 45 staff. That number has increased to about 70 today.
“Sales are strong-I’m certainly bullish about the next couple of years,” Munk says. An area of concern for the company, however, is that some of its customers have some pharmaceuticals that are set to face patent expiry from the end of 2011. “Certainly this is an issue we face,” Munk says.
Munk questions whether the overall fine chemicals market is also growing. “I don’t get the sense that this has been happening in the past year,” he says.
Ash Stevens has been punching above its weight in its role as a manufacturer of active pharma ingredients (APIs) for drugs approved by U.S. FDA that are new chemical entities (NCEs). Since about 2002 around 100 NCEs have been introduced to the market and Ash Stevens initially has been the sole producer of three of them, Munk says.
Financial growth has enabled the company to invest $2.5 million in new technology, including a hydrogenation cell that it brought online during 2009 at River View in Detroit. The new facility features modern bays with three vessels. Additionally, the company has built new offices at the site.
The company’s largest reactor vessels have a capacity of 500 gallons. The company is evaluating options for introducing 1,000 gallon reactors. It has yet to decide whether to expand its existing facilities or build on a greenfield site. “We are looking to fulfill that market need” for larger production volumes, Munk says. “This would open up a whole new customer base, so we are very enthusiastic. I would expect these plans to be paid for with cash-not by adding debt,” he says.
When it comes to regulatory compliance, Ash Stevens is positioning itself as a safe pair of hands. “Some [pharma] people have been experiencing regulatory issues and poor communication” from Chinese suppliers in particular, Munk says. Developing pharmaceuticals “is an experimental science-and sometimes these experiments fail.” How quickly you communicate if projects don’t go according to plan is important, he says.
As part of its activities in this area, one year ago the company hired a chemical engineer as its chief compliance officer. “Regulatory compliance is what we have to sell compared with those producers based outside the west,” says Munk, who worked in the pharmaceuticals sector before heading up Ash Stevens. “One of my career goals is that I don’t want to hurt anyone whether it’s patients or workers,” he says.
Socma recently awarded Ash Stevens two Silver Awards for achievement in environmental, health, safety, and security (EHS&S) performance. The awards recognize the firm’s commitment to performance improvements in EHS&S planning and operations as well as employee training and engagement.
“This is a very highly regulated industry. It’s about managing the risks of our customers. We are meeting these requirements. ” Munk adds.