Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (1) | Ignore Thread Prev | Next
Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 743  
Subject: “Mallinckrodt 125th Year Anniversary: Qual Date: 4/10/2011 7:09 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
“Mallinckrodt 125th Year Anniversary: Quality, Integrity, Service,” by Raymond F. Benetele, Mallinckrodt, Inc., St. Louis, MO, 1992. This 144-page paperback tells the story of one of America's oldest chemical companies. Mallinckrodt was founded in 1867 at Mallinckrodt's Farm in Bremen, north of St. Louis, by German immigrants. Emil Mallinckrodt and his cousin Julius had settled in the St. Louis area to farm in 1831. His son Edward developed an interest in chemistry and had a home laboratory. On this basis, in 1864, he and brother, Otto were sent to study in Germany under Prof. Karl Fresenius. Apprenticeships in German chemical works were included. On their return in 1867, they established G. Mallinckrodt & Co., Manufacturing Chemists. Their products were chemicals sold mostly to pharmacies–aqua ammonia, spirits of nitrous ether, acetic and carbolic acid, chloroform, and burnt alum (used in baking powder). Competitors were companies like ER Squibb, Charles Pfizer, Powers-Weightman, and Rosengarten & Son, all located in the East. Mallinckrodt dominated the rapidly expanding western market as the only supplier west of the Mississippi River. Meticulous attention to quality was always the watch word.

Anhydrous ammonia was an early addition. Edward Mallinckrodt saw potential to supply ice plants that used Carl von Lynde's ammonia compression machine. Their numbers grew from 35 in 1879 to over 2000 by 1900. Mallinckrodt soon became the leading supplier. (The business was sold in 1928 as home refrigerators became available.) Photographic chemicals was another product line adopted as photography transitioned from cumbersome wet plate technology to dry plates such as those offered by Eastman Kodak. In the 1890s, opiate processing was begun to make morphine and codeine. Others included hydrogen peroxide, tannic, gallic, and pyrogallic acids. In 1887, a plant was established in Bergen, NJ, to make potassium and mercury compounds.

Son Edward, Jr., joined the company after completing a degree in chemistry at Harvard. He believed in chemical research. One early endeavor was the “ether lab” which investigated the purification and stabilization of anesthetic grades of ether. By 1914, they had developed improved packaging. Barium sulfate was commercialized in 1913 as an x-ray contrast agent.

Mallinckrodt is perhaps best known for its laboratory chemicals sold under the AR brand (analyzed reagent). This business began in 1922, and was kickstarted by the 1914 embargo on German goods. Until that time most chemicals sold in the US were imported from Germany. (In addition international cartels of the age drove competitors out of business.) In 1917, the Trading with the Enemies Act allowed US companies to use German process technology. Mallinckrodt began manufacture of phenobarbitol and sedative potassium bromide. Manufacture of aluminum stearate, a lubricant additive for the Model T Ford was begun. Iodeikon, an iodinated x-ray contrast agent for the gallbladder, was developed in the 1920s from cooperation with the Washington University School of Medicine.

Changes in the drug industry impacted the company in the 1930s. Competitors began to supply pharmacies with manufactured preparations reducing their needs for their own compounding. Mallinckrodt resisted competition with its own customers. During the Great Depression, Mallinckrodt accepted losses and avoided layoffs. Instead workers were kept busy fixing equipment, painting fences, and cleaning yards.

During World War II, Mallinckrodt was an early processor of uranium. All of the uranium used in the famous atomic pile experiment was supplied by Mallinckrodt. The work to supply tons of uranium compounds was begun on April 17, 1942, and continued until 1966. Until mid-1943, Mallinckrodt was the exclusive supplier of uranium compounds for the Manhattan Project. Initial work was done at a government plant on Destrehan St., in St. Louis, which operated from 1946 to 1958. In 1955, the US govt undertook the construction of a $70MM plant at Weldon Springs, MO to manufacture uranium compounds: uranium trioxide, uranium dioxide, uranium tetrafluoride, and uranium metal. Mallinckrodt operated the plant under contract until 1961. In 1956, a plant at Hematite, MO began production of nuclear fuel for commercial reactors and nuclear powered ships. In 1961, increasing competition, and slowing growth caused management to merge the commercial business into a jv with Olin Matheson and Nuclear Development Corp. of America. As the need for weapons grade uranium moderated, AEC ceased production at Weldon Springs in 1966, and Mallinckrodt's contract with AEC ended the following year.

Mallinckrodt was a family company until 1954, when non-voting shares were offered to the public with voting shares retained by the family, primarily by Edward, Jr. Efforts to develop new business lines proved troublesome. Processing columbium for the US government was unprofitable. A venture into purified silicon for the semiconductor industry was too costly. A series of acquisitions followed. Calsicat, a manufacturer of catalysts was acquired in 1964. Nuclear imaging began in 1966, with the acquisition of Nuclear Consultants, a supplier of radiopharmaceuticals. Additional x-ray contrast agents were developed. Technology acquired with Washine Chemical in 1968, resulted in the production of APAP, the active ingredient in Tylenol at a plant in Raleigh, NC beginning in 1971. Initially the business complemented opiates manufacturing providing prescription pain pills with limited amounts of opiates (and reducing security issues for pharmacists). Mallinckrodt became the leading supplier.

Management confronted a series of challenges. In addition to the losses in columbium processing, they held $1.5MM in Penn-Central commercial paper when bankruptcy was declared. Shortages of opium caught the company with expensive contracts when prices moderated.

New corporate headquarters were built in St. Louis County in 1977. A new production and distribution center was constructed in Paris, KY in 1978. A plant in Dieburg, West Germany was acquired in 1980.

Edward Mallinckrodt, Jr., passed away in 1967. His voting shares were willed to Washington University and Harvard University. In response to concerns about a board of directors composed of university appointees, Mallinckrodt was acquired by Avon in 1982, but the cosmetics fit was awkward and corporate cultures conflicted Avon sold the business to International Minerals & Chemical Corporation in 1986. The book ends as International Minerals & Chemicals changes its name to Imcera, and later to Mallinckrodt, moving its headquarters to Chesterfield, MO. (In an effort to reduce cyclicality of earnings, IMC spun off its fertilizer minerals mining business into what is now Mosaic once the Mallinckrodt acquisition came to fruition.)

Mallinckrodt was split into two group companies, Mallinckrodt Medical and Mallinckrodt Specialty Chemicals. Eventually Mallinckrodt was acquired by Tyco. Most of Mallinckrodt Specialty Chemicals was sold in pieces. The AR line was sold to JT Baker. Originally called Mallinckrodt-Baker, it is now known as Avantor. Mallinckrodt Medical became Covidien. Covidien continues to manufacture APAP, numerous generic pharmaceuticals and to medical imaging agents including x-ray contrast agents. Avantor is headquartered in Phillipsburg, NJ; Covidien in Dublin, Ireland.

Those interested in the chemical industry will find this an informative read. At one time most chemical companies were family enterprises. Some managed to grow into goliaths. Others matured at a smaller size and disappeared. Mallinckrodt seems to have been one that made an auspicious beginning, but somehow failed to take wing and soar. Experts can debate why. Are some more adept at choosing the best opportunities for growth? Or are they merely lucky?
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (1) | Ignore Thread Prev | Next

Announcements

Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Macro Economics

Looking at Currency Ratios
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement