a project, once it becomes evident that the objectives cannot be reached. in a typical project the overall responsibility for the economic and technical success lies with the project champion. he is assisted by the project manager, who is responsible for the technical success. in custom manufacturing, a typical project starts with the acceptance of the product idea, which originates mainly from business development, by the new product committee, followed by the preparation of a laboratory process, and ends with the successful completion of demonstration runs on industrial scale and the signature of a multiyear supply contract, respectively. the input from the customer is contained in the "technology package". its main constituents are (1) reaction scheme, (2) target of project & deliverables (product, quantity, required dates, specifications), (3) list of analytical methods, (4) process development opportunities (stepwise assessment), (5) list of required reports, (6) safety, health and environment (she) issues, (7) materials to be supplied by customer and (8) packaging & shipping information the technical part of a project usually determines its duration. depending on the quality of the information contained in the "technology package" received from the customer and the complexity of the project as such, particularly the number of steps that have to be performed; it can be any time between 12 and 24 months. depending on the number of researches involved, the total budget easily amounts to several million us dollars. markets fine chemicals are used as starting materials for specialty chemicals. the latter are obtained either by direct formulation or after chemical/biochemical transformation of intermediates to active substances. life sciences, primarily pharmaceutical, agrochemical and food and feed industries are the main consumers of fine chemicals. market size fine chemicals account for about 4% of the universe of chemicals. the latter, valued at $2,500 billion, is dominated mainly by oil-, gas-, and mineral-derived commodities (~40%) on one hand and a large variety of specialty chemicals at the interface between industry and the public on the other hand (~55%). the global production value of fine chemicals is estimated at $85 billion, of which about 2/3, or $55 billion are produced captively and $30 billion represent the global revenues of the fine chemical industry. the corresponding figures for the major user, the pharmaceutical industry, are $32 billion and $23 billion, respectively. for a number of reasons, such as the lack of statistical data and the somewhat equivocal definition it is not possible to exactly determine the size of the fine chemical market. table 5: breakdown of fine chemicals market by major applications size ($ billion) total a.i.captivemerchant life sciencespharmaceuticals553223 agrochemicals15114 various specialty chemicals15105 total fine-chemical industry855332 in table 5, the approximately $85 billion fine chemical market is subdivided into major applications according to their relevance, namely, fine chemicals for pharmaceuticals, agrochemicals and specialty chemicals outside life sciences. furthermore, a distinction is made between captive (in-house) production and merchant market. pharmaceutical fine chemicals (pfcs) account for two-thirds of the total. out of the pfc value of $55 billion, about $23 billion (~40%) are traded, and $32 billion (~60%) are the production value of the pharma industry's in-house production. within life science products, fine chemicals for agro, and —at a distance— for veterinary drugs follow in importance. the production value for fine chemicals used for specialty chemicals other than pharmaceuticals and agrochemicals is estimated at $15 billion. as the leading specialty chemical companies, akzo nobel, dow, dupont, evonik, chemtura and mitsubishi are backward-integrated, the share of in-house production is estimated at 75%, leaving a merchant market of approximately $5 billion. pharmaceuticals the pharmaceutical industry constitutes the most important customer base for the fine chemical industry (see table 4). the largest companies are pfizer, usa; roche, switzerland, glaxosmithkline, uk; sanofi aventis, france, and novartis, switzerland. all are active in r&d, manufacturing and marketing. pharmaceuticals containing more than 2000 different active ingredients are in commerce today; a sizable number of them are sourced from the fine chemical industry. the industry also has a track record of above-average growth. the fine chemical industry has a keen interest in the top-selling or "blockbuster drugs", i.e. those with worldwide annual sales in excess of $1 billion. their number has increased steadily, from 27 in 1999 to 51 in 2001, 76 in 2003, and then levelled off. table: 6 top 10 (20) proprietary drugs 2010 brand api company sales 2010 ($ bn) 1lipitoratorvastatinpfizer11.8 2plavixclopidogrelbristol-myers squibb sanofi-aventis9.4 3remicade*infliximabj&j, merck, mitsubishi, tanabe8.0 4advair/ seretidesalmeterol + fluticasoneglaxo smithkline8.0 5enbrel*etanecerptamgen, pfizer, takeda7.4 6avastin*bevacizumabroche6.8 7abilifyaripiprazolebristol-myers squibb otsuka6.8 8mabthera/ rituxan*rituximabroche6.7 9humira*adalimumababbvie (before: abbott)6.5 10diovan & co-diovanvalsartannovartis6.1 total top 1077.5 sales of the top 20 blockbuster drugs are reported in table 6. the apis of 12 of them are "small" (lmw) molecules. averaging a mw of 477, they have quite complex structures. they typically show three cyclic moieties. 10 of them exhibit at least one n-heterocyclic moiety. five of the top 10, up from none in 2005, are biopharmaceuticals. the largest-selling non-proprietary drugs are paracetamol, omeprazole, ethinylestradiol, amoxicillin, pyridoxine, and ascorbic acid. the innovator pharma companies require mainly custom manufacturing services for their proprietary drug substances. the demand is driven primarily by the number of new drug launches, the volume requirements and the industry's "make or buy" strategy. a summary of the pro's and con's for outsourcing from the pharma industry's perspective is given in table 7. as extended studies at the stern business school of the new york city university have shown, financial considerations clearly favor the "buy" option. table 7: pro's and con's for outsourcing api manufacture pro's con's concentrate on core activities (innovation & marketing) deploy your financial resources for more profitable investments benefit from f.c. industry's know how and expertise eliminate long lead times to build and validate a manufacturing facility free capacity for new product introductions avoid risks of using hazardous chemistry loss of tax benefits resulting from production of apis in tax havens dissemination of intellectual property loss of know how job losses under-utilization of in-house production capacity teva and sandoz are by far the largest generics companies (see also chapter 6.3.2). they differ from their competitors not only in sales revenues but also because they are strongly backwards integrated and have proprietary drugs in their portfolios. they also vie for the promising biosimilars market. several thousand small or virtual pharma companies focus on r&d. albeit on just a few lead compounds. they typically originate mostly from academia. therefore, their r&d strategy is more focused on the elucidation of the biological roots of diseases rather than developing synthesis methods. agrochemicals agrochemical companies are the second largest users of fine chemicals. most products have a "pharmaceutical heritage". as a consequence of an intensive m&a activity over the past 10–20 years, the industry now is more consolidated than the pharmaceutical industry. the top 10 companies, led by syngenta, switzerland; bayer cropsciences, germany: monsanto, usa; basf crop protection, germany, and dow agrosciences, usa have a share of almost 95% of the total 2,000,000 tons / $48.5 billion pesticide output in 2010. since the 1990s the r&d effort is focused mainly on gene modified (gm) seeds. at both monsanto and dupont's seed subsidiary, pioneer hi-bred, gm seed businesses already account for more than 50% of total sales. 100 new lmw agrochemicals have been launched in the period 2000–2009. however, only 8 products achieved sales in excess of $100 million per year. generics play a bigger role in the agro than in the pharma industry. they represent some 70% of the global market. china national chemical corp, a.k.a. chemchina group, is the world's largest supplier of generic farm chemicals. mahkteshim agan, israel, and cheminova, denmark follow on the ranks 2 and 3. apart from these multibillion-dollar companies, there are hundreds of smaller firms with sales of less than $50 million per year, mainly in india and china. the incidence of the cost of the active ingredient is about 33%; i.e., much higher than in drugs. depending on the climatic conditions affecting crop yields, consumption and prices of agrochemicals are subject to wide fluctuations from year to year, impacting also the suppliers. the molecular structures of modern agrochemicals are much more complex than in older products, but lower than of their pharma counterparts. the average molecular weight of the top 10 is 330, as compared with 477 for the top 10. in comparison to reagents used in pharmaceutical fine chemical syntheses, hazardous chemicals, e.g. sodium azide, halogens, methyl sulfide, phosgene, phosphorus chlorides, are more frequently used. agrochemical companies sometimes outsource just these steps, which require specialized equipment, on toll conversion deals. with exception of the pyrethroids, which are photostable modifications of naturally occurring pyrethrums, active ingredients of agrochemicals rarely are chiral. examples within herbicides are the world's longstanding top-selling product, monsanto's round-up (glyphosate). syngenta's cyclohexadione-type mesotrione and paraquat dichloride. within insecticides, the traditional organophosphates, like malathion, and pyrethroids such as γ-cyhalotrin are being substituted for by neonicotinoids, like bayer's imidacloprid and syngenta's thiamethoxam and pyrazoles, such as basf's fipronil. chloranthaniliprole is the most important representative of du pont's award-winning anthranilic diamide family of broad spectrum insecticides. within fungicides, the strobilurins, a new class, are growing rapidly and already have captured more than 30% of the $10 billion global fungicide market. syngenta's azoxystrobin was the first product launched. also basf's f-500 series, a.o. pyraclostrobin and kresoxim-methyl, bayer cropscience, and monsanto are developing new compounds in this class. combination pesticides, such as monsanto's genuity and smartstax are more and more frequently used. other specialty chemical industries apart from life sciences, specialty chemicals -and therefore also their active ingredients, commodities or fine chemicals, as the case may be- are used ubiquitously, in both industrial applications, such as biocides and corrosion inhibitors in cooling water towers, and consumer applications, such as personal care and household products. the active ingredients extend from high-price / low-volume fine chemicals, used for liquid crystal displays to large-volume / low-price amino acids used as feed additives. table: 8: other specialty chemicals industries industrysales ($ billion)attrac-tivenessproducts animal health~ 20♦♦♦typical a.h. products derive from human medicines, e.g. reconzile, dubbed "puppy prozac". paraciticides are the largest product category. good growth prospects in fish farming. adhesives & sealants~ 60♦♦uses extend from household, e.g. paper gluing, to high-tech specialty products for assembling electronic parts, automotive and aircraft construction. biocides~ 3♦largest applications are wood conversation and water treatment. a.i.'s mainly commodities catalysts & enzymes~ 15♦catalysts (automotive, polymers, petroleum processing, chemicals) / enzymes (detergents / technical enzymes, food & feed) = 80 / 20 dyestuffs & pigments~ 10♦mostly based on large volume aromatic compounds, e.g., letter acids .asian dyestuff prod, > 106 mtpa. some niche products, e.g. colour shifting pigments electronic chemicals~ 30♦♦♦sizeable and growing demand for fine chemicals, e.g. octafluorocyclobutane for etching. for liquid crystals and organic light emitting diodes (oled). flavours & fragrances~ 20♦♦~3000 molecules are used, e.g. (-) menthol ,polycyclic musks , vanilline, linalool, geraniol, heterocyclics, 2-phenylethanol) food & feed additives40-50♦♦mainly amino acids (l-lysine , l-methionine, ...), vitamins (c , niacin, riboflavin, ...), artificial sweeteners (aspartame, splenda) and carotenoids specialty polymersna♦♦aerospace: fluorinated poly ethylene/propylene,, polyether ether ketones , polyimides, precision parts: aramides , polybenzazoles *fine chemicals merchant market size, growth potential examples of applications in eight areas, ranging from adhesives to specialty polymers, are listed in table 8. overall, the attractiveness for the fine chemical industry is smaller than the life science industry. the total market, expressed in finished product sales, amounts to $150–200 billion, or about one fourth of the pharma market. the embedded fine chemicals account for an estimated $15 billion (see table 5). further disadvantages are the backward integration of the big players, e.g. akzo-nobel, netherlands; ajinomoto, japan; danone, france; everlight chemical industrial corp., taiwan; evonik-degussa, germany; givaudan and nestlé, switzerland, novozymes, denmark, procter & gamble, and unilever usa. last but not least, innovation is rather based on new formulations of existing products, rather than the development of new fine chemicals. it is most likely to happen in application areas unrelated to human health (where nces are subject to very extensive testing). target products and services global sales of proprietary drugs are estimated $735 billion in 2010, or almost 90% of the total pharma market. global sales of generics are about $100 billion, or just over 10% of the total pharma market. due to the much lower unit price, their market share will be close to 30% on an api volume/volume basis.