1 Century-Old Chemical Company Croda Becomes a 'Core' of the Global Vaccine Production Network [Hidden Industry Story]

Started as a British chemical company in 1925
Extracted 'Lanolin Oil' from wool... Supplied raw materials for cosmetics
Acquired US Avanti last year, succeeded in producing key mRNA vaccine raw materials
Announces major transformation from chemical to biotechnology company

Croda International, a British chemical company logo / Photo by Wikipedia capture

[Asia Economy Reporter Lim Juhyung] The messenger RNA (mRNA) COVID-19 vaccines developed by American pharmaceutical companies Pfizer and Moderna are suffering from a global supply shortage. While demand in various countries is soaring, mass production is hindered because these vaccines were created using experimental new technology.

Amid this, a chemical company has emerged as a 'key' player in the mRNA vaccine production supply chain, attracting attention. Located in Yorkshire, UK, 'Croda International' is so crucial that the success or failure of mRNA vaccine production hinges on a chemical substance produced by Croda. How did this company, which had been producing raw materials for cosmetics and leather products for the past century, suddenly transform into a global leader in life sciences overnight?

◆The miraculous particle that made mRNA vaccines a reality

The chemical substance produced by Croda is called 'Lipid Nanoparticles (LNP)'. These are particles made from lipids, a type of biomolecule, which encapsulate drugs inside to protect them from damage by external environments. Since mRNA vaccines developed by Pfizer and Moderna are highly sensitive to external conditions such as temperature, they are coated within these special LNP particles to safeguard them until delivery into the human body.

On the 7th, soldiers received the messenger RNA (mRNA) vaccine produced by Pfizer at the Military Capital Hospital Vaccination Center in Seongnam, Gyeonggi Province. / Photo by Yonhap News

Companies capable of manufacturing LNPs in-house are rare worldwide, and Croda is one of them. Notably, Croda signed a contract last year to supply LNPs for Pfizer’s vaccine, playing a central role in Pfizer’s vaccine manufacturing supply chain. It is no exaggeration to say that the success of overcoming the COVID-19 crisis depends on Croda’s mass production capabilities.

The company’s stock price has also surged significantly. Croda, listed on the London Stock Exchange, is trading at a market capitalization of about ?9.7 billion (approximately 15 trillion KRW), up roughly 35% compared to last year.

◆From extracting oil from wool... Croda’s 100-year history

Croda did not initially stand out in the life sciences field. Founded in 1925 by George William Crowe and Henry James Dow, Croda began as a chemical company. The company name 'Croda' is a combination of the founders’ surnames, 'Crowe' and 'Dow'.

In early 20th century Britain, there were no companies producing 'lanolin oil'. Lanolin oil is a solution extracted from sheep’s wool, used in everything from leather processing to cosmetic ingredients, but Britain relied entirely on imports.

After extensive research and development, Croda developed a new process to extract lanolin oil and succeeded in mass-producing it domestically for the first time in Britain, focusing on both domestic supply and exports.

Kroda's global headquarters for the past century has been Cowick Hall in Yorkshire, England. / Photo by Wikipedia capture

However, Croda’s chemical business was not always smooth. During the initial research on lanolin oil extraction, one of the co-founders, Henry Dow, left the company due to early process failures. When the company began its global expansion, the Great Depression struck, causing further turmoil.

Yet, in the late 1930s, when World War II shook Europe, Croda was selected as a supplier of paint for British warships and tanks, providing a springboard for another leap forward.

After founder George William Crowe passed away in 1949, his son Frederick Wood took over, and since then, seven chairpersons have led Croda. Rather than rapid expansion, Croda has grown over about a century by building a sustainable business with a long-term perspective.

◆A turning point from chemical company to life sciences firm

The turning point for Croda came in April last year. Croda was participating in the acquisition of Avanti, a US company that developed LNP manufacturing technology. The acquisition was a competitive bidding process involving several companies besides Croda. After fierce competition, Croda defeated all rivals and acquired Avanti.

According to Michael Puetz, Croda’s CEO, in a recent interview with the UK media 'The Telegraph', Avanti chose to merge with Croda because of 'trust'. Croda had been in contact with Avanti even before the acquisition process began, and CEO Puetz personally reached out to Avanti over several months to persuade them to merge.

The lipid nanoparticles (LNP) produced by Croda play the role of encapsulating the mRNA vaccine material and protecting it until it is delivered into the human body. / Photo by Hokkaido University, Japan, YouTube video capture

Regarding this, CEO Puetz said, "Avanti, a family-owned company, decided (to merge) because they trusted our relationship. I contacted them two or three times to explain Croda’s corporate culture, and eventually, after several months, we were able to close the deal."

About five months after completing the merger with Avanti, Pfizer became the first in the world to receive emergency use authorization for a COVID-19 vaccine, and Croda, possessing LNP technology, instantly gained global attention. Reflecting on that time, CEO Puetz said, "The Pfizer vaccine was the greatest discovery in the history of pharmaceutical products," and "It is a tremendous source of pride that Croda produces the core raw material."

CEO Puetz also described acquiring LNP technology and succeeding in mass production as "the same moment as when we first made lanolin oil." Just as Croda’s founders completed the lanolin oil extraction method 100 years ago and began global expansion, 21st-century Croda has been able to leap into a new domain as a life sciences company rather than just a chemical firm.

Now at the forefront of the life sciences industry through LNP, Croda is accelerating mass production. Starting this year, Croda plans to invest ?40 million (approximately 6.31 billion KRW) to increase LNP production capacity at its factories in the UK and the US to over 1 kg.