Bug business booms

David Knott
London
[email protected]

In its laboratories, BASF Microcheck Ltd., Nottingham, U.K., grows bacteria at amazing rates, and it aims to achieve similar multiplication of its sales.

Microcheck cultivates bugs that are a major problem in a number of industries, including oil and gas. These are used only to test the company's products.

Walter Guthrie, R&D manager at Microcheck, said: "Wherever you've got water, you'll get bugs. In the oil and gas industry, sulfate reducers, slime formers, and degraders are the main problems."

The Desulphovibrio species are sulfate-reducing bacteria that excrete sulfur, requiring expensive clean-up programs if they invade reservoirs and push sulfur levels above specified limits, or if they contaminate stored oil.

The slime formers are the Pseudomonas and Escherichia species, which can block pipelines, while Aerobacter and Bacillus are species that can degrade drilling muds, for example.

Microcheck's main biocides for the oil and gas industry are bronopol and gluteraldehyde, sold mainly to service companies for use in drilling operations, water treatment, and oil storage installations.

Molecule hunters

Microcheck is currently developing a number of new biocides that may ultimately find application in the oil and gas industry.

"We are constantly looking for molecules with an activity profile offering control of a wide range of microbes," said Guthrie. "Then we look at where these molecules can be applied."

The three main methods of hunting for interesting new molecules are in-house research, links with universities, and technology transfer from other companies that have found molecules they cannot exploit themselves but that they think another company could develop to mutual benefit.

Serendipity

Phil Jones, Microcheck managing director, said another factor in finding useful molecules is serendipity: Some are found by chance.

Jones said a measure of serendipity preceded the creation of Microcheck in July 1998. In 1995, parent company BASF AG bought the pharmaceuticals business of Boots plc, also based in Nottingham.

This included a biocides portfolio that fitted snugly with BASF's own preservatives business, so Microcheck was formed to combine these interests to cash in on an anticipated anti-microbes boom.

Oil and gas business accounted for 17% of Microcheck's £30 million ($48 million) sales last year, said Jones. The biocides market is fragmented: Microcheck holds 2% of the global market, while the leader holds only 7%.

Jones said that BASF's backing will enable Microcheck to grow "organically" and make acquisitions at a time when the biocides market is facing great restructuring and yet is expected to grow by 4-6%/year.

"The market is changing every day," said Jones. "Expansion is one reason, but regulation and restructuring are others. Many companies are now making decisions about whether biocides is a core business or not."

Jones reckons this combination of market growth and divestment will enable Microcheck to increase sales five-fold over the next 5 years, through acquisitions, partnerships, and licensing.