Coatings - AkzoNobel

Developments in the Business Units
ORGANON – PRESCRIPTION DRUGS
Sales NLG 2,880 million (1997: NLG 2,540 million)
Another successful year for 75-year-old Organon
Organon celebrated its 75th anniversary in 1998.
Mr. Saal van Zwanenberg founded Organon in Oss, the
Netherlands, in 1923. From its modest beginnings
Organon has grown into a well-regarded and respected
healthcare company with almost 10,000 employees
(including 1,500 in R&D), having subsidiaries in
55 countries and selling its products in virtually every
country in the world.
In 1998, Organon achieved a 13 percent increase in
sales and a significantly higher operating income.
In Europe, sales rose 10 percent. Growth rates of more
than 25 percent were achieved in France, Spain,
Sweden, Denmark, and—in Eastern Europe—the Czech
Republic, Slovakia, and Rumania. In the Americas sales
increased 38 percent, with the United States as the star
performer at 67 percent growth. In Asia we faced a
setback in sales of about 20 percent due to the
economic and financial crisis. In Australia we did
exceptionally well, with sales rising by 35 percent.
Sales growth by product group breaks down as follows:
Contraception 5 percent, Hormone Replacement
Therapy (HRT) 15 percent, Fertility 33 percent, and
Central Nervous System (CNS) 52 percent. In
Contraception the final outcome in the scientific debate
about the second and third generation oral
contraceptives was: there is no difference in the
prevalence of thrombosis. The political outcome in one
country remains uncertain.
In the United States, Mircette® oral contraceptive was
launched, and its acceptance looks very positive. In HRT
we continue to develop our unique tissue-specific Livial®
brand into a leading product in the market of
treatments of climacteric complaints and prevention of
osteoporosis. In Fertility our rapidly growing
Puregon®/Follistim® recombinant FSH product was very
successful. In CNS we have the ambition to increase the
worldwide market share of our novel Remeron®
antidepressant to 6 percent by the year 2000.
AKZO NOBEL ANNUAL REPORT 1998
27
PHARMA
Our R&D focuses on innovation, with 16 to 17 percent
of sales being spent in this field. New R&D facilities are
under construction or planned in the United Kingdom,
the United States, and the Netherlands. Our R&D
strategy is to establish contacts with outside centers of
excellence, simultaneously building a high quality,
creative, and competitive R&D organization.
In Processing, we are concentrating our efforts on
efficiency and improvement of equipment to meet high
quality requirements. Production facilities in France,
Spain, and Korea were sold to third parties.
Besides our R&D and Processing efforts, we will
continue to focus on:
• HSE: implementing ISO 14001 standards;
• competitive intelligence: using contemporary IT facilities
to optimize business decisions;
• health economics: demonstrating cost-effectiveness to
convince new decision-makers;
• Information Technology: integrating business functions
and facilitating international communication;
• logistics: creating higher customer-added value and
optimizing inventories;
• time-to-market: reducing the time lag between
regulatory approval, price approval, and product
launch.
ORGANON TEKNIKA – HOSPITAL SUPPLIES
Sales NLG 1,010 million (1997: NLG 950 million)
Strong volume growth
Strong volume growth was the striking feature in 1998,
for both Pharmaceuticals and Diagnostics. Operating
income was well ahead of 1997. Sales and operating
income were negatively impacted by lower rates for
various currencies, such as the yen and the U.S. dollar
that declined in the second half of 1998, and by the
recession in Southeast Asia.
R&D focuses on Pharmaceuticals, mainly for
anesthesiologists, and on the special Diagnostics fields
of Immunodiagnostics, Microbiology, Hemostasis, and
Nucleic Acid Diagnostics. Organon Teknika’s
international headquarters were moved in November
1998 from Turnhout, Belgium, to Boxtel, the
Netherlands, and integrated with the European R&D,
manufacturing, and distribution facilities to improve
operational efficiency.