Fine Chemical - Research and Development

Research and Development

The overall emphasis of fine chemical R&D is more on development than on research. The main tasks are (1) designing, respectively duplicating and adapting in case of custom manufacture, and developing laboratory procedures for new products or processes; (2) transferring the processes from the laboratory via pilot plant to the industrial scale (the scale up factor from a 10g sample to a 1ton batch is 100,000); and (3) to optimize existing processes. At all times during this course of action it has to be ensured that the four critical constraints, namely, economics, timing, safety, ecology and sustainability are observed . R&D expenditures in the fine chemical industry are higher than in the commodities industry. They represent around 5–10% versus 2–5% of sales. On the business side, product innovation must proceed at a more rapid pace, because life cycles of fine chemicals are shorter than those of commodities. Therefore, there is an ongoing need for substitution of obsolete products. On the technical side, the higher complexity of the products and the more stringent regulatory requirements absorb more resources. Many economic and technical parameters have been proposed to enable a meaningful assessment of single projects and project portfolios. Examples are attractiveness, strategic fit, innovation, gross/net present value, expected profits, R&D expenditures, development stage, probability of success, technology fit, potential conflicts with other activities of the company and realization time. Most of these parameters cannot be determined quantitatively, at least during the early phases of a project. The best way to take advantage of a project portfolio is to develop and use it in an iterative way. By comparing the entries at regular intervals, for instance, every 3 months, the directions that the projects take can be visualized. If a negative trend persists with one particular project, the project should be put on the watch list.