American Cyanamid Company was a leading American conglomerate which became one of the nation's top 100 manufacturing companies during the 1970s and 1980s, according to the Fortune 500 listings at the time. Founded by Frank Washburn in 1907, the company grew to over 100,000 employees worldwide, and had over 200,000 shareholders by the mid-1970s. Its stock was traded on the New York Stock Exchange under the symbol ACY. It was repeatedly reorganized after the mid-1990s, merged with other firms, and saw brands and divisions sold or spun off. The bulk of the former company is now part of Pfizer, with smaller portions belonging to BASF, Procter & Gamble and other firms.
Although originally a manufacturer of agricultural chemicals the product line was soon broadened into many different types of industrial chemicals and specialty chemicals. The company then diversified into synthetic fibers, pharmaceuticals, surgical products, plastics, and inorganic pigments prior to World War II; and later added, by acquisitions, cosmetic and toiletry products, perfumes, building products, home building, and several smaller product categories following World War II.
Video American Cyanamid
Organization
Cyanamid --as the company was commonly called-- produced an immense range and variety of products. Its activities were organized into 10 operating divisions, whose names are suggestive of the products manufactured. They were:
- Organic Chemicals (dyes, elastomers, melamine, desulferization catalysts, many others);
- Industrial Chemicals (paper chemicals, acrylic plastics, plastics additives, many others);
- Fibers (acrylic fibers);
- Pigments (titanium dioxide);
- Consumer Products (shampoos, perfumes and other fragrance products, household cleaners);
- Agricultural (animal feed additives, veterinary pharmaceuticals, fertilizers, pesticides, plant growth regulants, many others);
- Lederle Laboratories (antibiotics, vitamins, vaccines, many others; and Davis & Geck, surgical sutures and devices);
- Formica Corp. (subsidiary, making decorative laminates and kitchen countertops, and pre-pasted vinyl wall coverings);
- Cyanamid of Canada (fertilizers, other products, and sale of U.S.-made products in Canada); and
- Cyanamid International (sale of company products throughout the world).
? Additionally, the company had several joint ventures, such as
- Jefferson Chemical (partner: Texaco) and
- CyRo Industries (partner: Rohm & Haas).
There were also a number of smaller companies acquired over the years, such as an industrial safety products distributor and Bloomingdale Aerospace, which produced lightweight aircraft panels built on hexagonal core material.
In 1972, Cyanamid acquired a home building company, Ervin Industries, and invested heavily to expand that business over the next eight years. The company's thrust was Planned Unit Developments, or PUDs, which were housing developments built around private golf courses. Hence, Cyanamid became at one point the largest operator of golf courses in the U.S. After sustaining losses in excess of $100 million, Cyanamid discontinued the business and sold the real estate and other assets.
The operating divisions had their own research activities, manufacturing facilities, and sales forces. Functions common to all divisions were organized and administered at the corporate level, by nine service divisions:
- Law (patent and trademark filings and protection, defending lawsuits, compliance with legal requirements);
- Engineering and Construction (plant/process design and building);
- Transportation and Distribution (warehousing, shipment, logistics);
- Purchasing (sourcing raw materials and supplies);
- Personnel (hiring, compensation, compliance);
- Public Affairs (public relations, Annual Report, Washington office);
- Treasury (financial management);
- Controller (accounting, financial reporting); and
- Corporate Development and Planning (strategy, long-range planning, capital investment analysis, staff to the Executive Committee).
Additionally, the office of the Corporate Secretary handled such matters as maintaining registration of the various subsidiary companies, fulfilling reporting requirements in various jurisdictions, stockholder notifications, and similar administrative tasks.
Maps American Cyanamid
Innovations and product development
Over the years, Cyanamid scientists developed numerous important new chemical, pharmaceutical, and medical products. Perhaps the most significant is Tetracycline, discovered by a Lederle researcher in 1945. The Davis & Geck branch developed the first synthetic absorbable suture, trademarked Dexon, during the 1970s, based on an ingenious glycolic acid polymer (thus utilizing a natural body protein, which reduced inflammation and scarring).
Also of particular note, Cyanamid research scientists employed at Lederle Laboratories developed Triamcinolone and Methotrexate. Triamcinolone is a widely used corticosteroid, sold both generically and under many brand names, including Cyanamid's Aristocort brand. The name Triamcinolone includes a reference to the parent corporation, in the AMC letter combination. A derivative drug, Triamcinolone acetonide, is one of the ingredients of Ledermix - an endodontic (tooth's root canal) lotion used between sessions. The name Ledermix similarly bows to its origins at Lederle Laboratories.
Methotrexate is used broadly in cancer treatment and treatment of autoimmune diseases, and many other conditions. In higher dosages, it is highly toxic and its use is thus often followed by administration of calcium leucovorin, which acts as an antidote.
Cyanamid also pioneered the development of antibiotic feed additives (products containing subtherapeutic levels of various antibiotics). These are added to foods normally supplied to cattle, swine, and other animals (or added to drinking water). The subsequent widespread of these feed additives prompted concern and an enduring controversy about whether these drugs initiate antibiotic resistance in the animals, and whether such resistance (if it occurs) leads to antibiotic-resistant strains which can affect humans.
Cyanamid developed many chemicals based on cyanamide chemistry, or more broadly nitrogen-based chemicals. Perhaps the most important was melamine, an extraordinarily strong and durable thermosetting plastic material. It is now among the most widely produced industrial chemicals in the world. Cyanamid also was a major producer of acrylonitrile, and its derivative, acrylamide. From these, the company produced a variety of flocculants, plastics, paper chemicals, and resins such as permanent-press resins for clothing.
Cyanamid had not only many "firsts", but eventually several "onlies"--products of which it was the only producer. One was tuberculosis vaccine, another was Sabin polio vaccine. Cyanamid was the sole producer of buttons for U.S. military clothing.
Cyanamid invented the first chemiluminscent product, marketed initially as "light sticks"--plastic tubes about 3/4" in diameter and about 6" long. These were energized by bending the tube slightly, to snap a fragile glass cylinder inside, mixing the two chemicals contained, causing them to emit a soft green light. Later developments included long flexible tubes, worn as necklaces; and colors including red, yellow, and blue. Trademarked Cyalume, the products became widespread as novelties; but the light produced was insufficient for, say, reading or as safety indicators. Other applications included marker lights carried in marine life rafts and flotation jackets (ships and airplanes), to help locate victims of crashes or sinkings, at night. An unexpected use of Cyalume was in deep-sea squid fishing. Light sticks were attached to long, multi-hook fishing lines, which reportedly caused squid to swarm and take the hooks in a frenzy.
Brand names
The name Cyanamid was known mainly industrially and among agricultural producers. The broad public knew the company principally by its abundant brand names, including Aristocort, Aureomycyin, Formica, Sanitas (wall coverings), Breck (shampoos), Creslan (acrylic fibers), Old Spice, Nina Ricci, Jacquiline Cochran, Melmac, Cyalume, Pine-Sol, Combat, Centrum, Stresstabs, Dexon, and numerous others.
Headquarters and operating facilities
The company moved from its New York City headquarters at 30 Rockefeller Plaza to Wayne, New Jersey, in 1963, creating modernistic facilities on a forested site adjacent to a large reservoir and waterfowl preserve. The property now serves as the world headquarters for Toys R Us.
Cyanamid had significant chemical manufacturing facilities in Bound Brook, New Jersey, Bridgewater, New Jersey, Linden, New Jersey, Hannibal, Missouri, Willow Island, West Virginia and the suburbs of New Orleans. There were several small ammonia/urea/ammonium nitrate plants throughout the Midwest, producing fertilizers for agricultural use.
The medical operations were headquartered and had their main manufacturing and research facilities in Pearl River, New York. Agricultural operations were headquartered in Princeton, New Jersey. Titanium Dioxide was produced at a large plant outside of Savannah, Georgia. Toiletries were produced principally in the Shulton complex in Clifton, New Jersey. Acrylic fibers were manufactured at a large facility outside Pensacola, Florida, from 1958 until 1996, when the plant was sold to Sterling Fibers, Inc. Phosphates (for fertilizers) were produced in Florida as well. Additionally, Cyanamid had smaller manufacturing and research facilities in Connecticut, Massachusetts, Maryland, and other places.
Lederle Laboratories - maker of Pipercillia (a penicillin substitute for those who were allergic), Centrum, Stresstabs vitamins and Orimune the Sabin oral polio vaccine - was Cyanamid's pharmaceutical division. Davis & Geck was the company's medical device operation, managed as a part of Lederle (not as a stand-alone division of Cyanamid). Its Consumer Products division included Shulton products, primarily Old Spice cologne and after-shave lotion, Breck shampoo, and Pine-Sol household cleaner; a variety of fine fragrance products were sold under licenses, including such brand names as Nina Ricci, Pierre Cardin, Tabac, and others. Melmac was Cyanamid's trademark for plastic kitchenware (produced and marketed by other firms, licensing the Melmac name).
Strategic issues
Cyanamid's enormous range and diversity of products was in some ways a strategic blunder. It added great complexity in managing the corporation because of the vast differences in advertising and promotion among different types of products, differing forms of distribution, differing characteristics of various markets, different types and scales of manufacturing needed, and the very large numbers of companies Cyanamid competed against.
Also, making many different products of a particular type--many with relatively small sales volume--added considerably to costs, hurting profitability. For example, in the early 1970s, the Shulton line had been enlarged to about two dozen brand names of men's toiletry products, without any appreciable product differentiation among the lines. Profits improved greatly when the minor products were discontinued and the company concentrated on the Old Spice brand. Similar improvements occurred when the acrylic fibers product group was cut from about 30 types and sizes of fibers to a single product which could be produced in great volume. Another example was that Cyanamid produced hundreds of different dyes, many in only one or two small batches a year; and profits improved when the number of dyes was cut in half.
The difficulties extended into problems of managing at the higher levels. Knowledge and know-how gained in one area of the company were often not very useful in another area. Hence it often became unproductive to transfer executives from one operating division to another because they had to learn the new business from the ground up, and they had to unlearn principles or truisms from their former business areas. At the senior officer level, it became difficult for the top executives to contribute insightfully to decisions needed in businesses unfamiliar to them. Matters such as inventory management, production scheduling, pricing, and consumers differed dramatically among the businesses, sometimes leading to disputes about the "right" or "best" approach to a particular problem. As a result, key decisions were often made at the Divisional level, with senior officers merely rubber-stamping them without fully understanding the strategic or financial implications.
Also a problem arising from the company's diversity was making research decisions. The nature of successful research in discovering new chemicals differs widely from the approaches needed for discovering beneficial and safe new pharmaceuticals, or discovering effective pesticides and herbicides--not to mention the duration and magnitude of research needed to validate, say, a plastics additive or rubber chemical versus that needed to ascertain efficacy, applicability, dosage levels, and safety for a new drug.
By the late 1970s, Cyanamid recognized these difficulties, and delegated major decision-making responsibility to a number of Strategy Boards which were specialized by product area. These Boards included subsets of the company's Executive Committee, involving only those persons with first-hand experience in the relevant areas. The only persons common to all Strategy Boards were the Chairman/CEO and the Director of Corporate Development and Planning.
Legal issues
Cyanamid was involved in the tetracycline litigation.
In its last years, the company was involved in numerous legal issues related to its earlier environmental pollution. During the 1970s, tens of millions of dollars were spent on effluent treatment - such as a $15-million tertiary water treatment plant in Bound Brook, NJ, which returned to the Raritan River water that was cleaner than the river itself. Tens of millions more were spent in efforts to clean up large wastewater pools which had decades of accumulation of toxic, carcinogenic, and teratogenic chemicals. These are considered by the U.S. Environmental Protection Agency (EPA) to be among the most toxic chemical waste sites in the U.S. Cyanamid merged with American Home Products in 1994, and AHP changed its name to Wyeth which was then purchased by Pfizer in 2009. Responsibility for the clean-up of these sites remained with the site owner during these corporate transitions. Remediation began at Bound Brook in 2007 and Pfizer took over the site in 2009.
The 575-acre Superfund site at Bound Brook-Bridgewater had a history of flooding. It was flooded in the 1930s and again in August 1971 during Hurricane Doria, at which time the plant sustained major damage to its facilities and equipment. In 2011, during Hurricane Irene the site once again flooded, but this time all manufacturing had ended and all buildings had been torn down. However, impounds and wastesites remained with consequent leakage of benzene and numerous other chemicals into the Raritan River and adjacent land, apparently including residential sites. Subsequent testing showed no evident danger to humans, but the calamity intensified the extensive cleanup work already underway and the EPA announced another remediation plan for the site in September 2012.
In the United Kingdom, the company was involved in a well-known legal case, American Cyanamid Co. (No 1) v Ethicon Ltd. (1975), which set the test for awarding an interim injunction in England and Wales and set down what became known to lawyers as the American Cyanamid principles. The American Cyanamid principles are also applied under public procurement law when the high court determines whether to lift the automatic suspension of the power to award a public contract when an application has been made to the court to challenge the lawfulness of a proposed contract award.
Acquisition and breakup
The company merged with American Home Products (AHP) in 1994. At that time, the purchase price, $9.5 billion, made it the second-largest industrial acquisition in U.S. history to that point. Various operations were sold or spun off, such as making Formica Corporation a stand-alone company. American Home Products eventually changed its name to Wyeth Corporation (one of its subsidiaries), and in 2009 Wyeth merged with Pfizer, becoming a subsidiary of the world's largest pharmaceutical company.
After the AHP acquisition, the Cyanamid conglomerate was disassembled over a period of years. The Pigments division was sold to National Lead Company. The Old Spice product line, and some others, were sold to Procter and Gamble. Formica Corp. was taken private in a management buyout, and later went through a series of ownership changes, and is currently owned by Fletcher Building, headquartered in New Zealand.
The $1.7 billion agricultural business was sold in 2000 to the German chemical giant BASF, raising BASF agricultural sales to $3.6 billion (1999 pro-forma), making it one of the top three agricultural companies in the world.
Most of the chemical businesses of American Cyanamid are now operated by a spun-off successor company known as Cytec. Cytec was acquired by Solvay Group in December 2015 to form the Cytec Solvay Group based in Brussels, Belgium.
See also
- Indiana Harbor Belt Railroad Co. v. American Cyanamid Co.
- List of Superfund sites in New Jersey
Sources
- Kepos, Paula (1993-12-17). International directory of company histories. ISBN 978-1-55862-323-1.
- Pederson, Jay P.; Kepos, Paula; Grant, Tina (1994), International directory of company histories, 8, St. James Press, pp. 23-24
- Ingham, John N (September 1983). Biographical dictionary of American business leaders. ISBN 978-0-313-23907-6.
- "American Chemical Industries". Industrial & Engineering Chemistry. 22 (3): 301-302. 1930. doi:10.1021/ie50243a025.
References
External links
- Wyeth web site
- BASF - partial acquisition of American Cyanamid in 2000
- United States Court of Appeals for the Fourth Circuit. N°02-1235. American Cyanamid Company, Plaintiff-Appellee v. St. Louis University, Defendant-Appellant. St. Louis University (SLU) paid a $16 million Missouri statecourt judgment to the family of a boy who became paralyzed after receiving Orimune, an oral polio vaccine and sought contribution from American Cyanamid Company, the parent company of the vaccine manufacturer.
- Criterion Catalysts & Technologies - introduction to Criterion's catalytic reforming (mentions spin-off from American Cyanamid and the two Shell companies)
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