13:16 PM | September 17, 2012 | —Lindsay Frost and Robert Westervelt
Chemical revenues and operating earnings were up again in 2011 as industry recovery continued. BASF claimed the top spot for the sixth straight year in CW’s Billion-Dollar Club, our ranking of companies by chemical revenues. ExxonMobil claims the second spot, and Sabic is now number three. Dow Chemical was pushed out of the second spot, to number four. The median revenue gain in dollar terms for all companies in the ranking was 12%.
The ranking highlights the rapid rise of new giants from Asia and the Mideast. Europe has ten companies in the top 20, and Asia has five. U.S. now only has three producers in the top 20, and the Mideast has two. In 2000, there were 11 European firms and six U.S. firms in the top 20. Three Asian companies made up the remainder that year.
Companies in high-growth economies posted some of the strongest gains, as did fertilizer makers. Indorama had the largest overall gain, 92%, on strong volume growth and acquisitions. Honam Petorchemical revenues rose 47% in 2011. In the Mideast, Sabic and IPIC both notched revenue gains of more than 30%.
Strong agricultural markets pushed revenues up for Agrium, CF Industries, Eurochem, Mosaic, and PotashCorp. All notched gains of more than 30%.
Worldwide growth in chemical production slowed in 2011, and the debt crisis in Europe caused a considerable slowdown in the second half, but firms still saw solid 2011 gains. Sales in emerging markets “have almost tripled in the past 10 years and accounted for approximately one-third of total sales, excluding oil and gas, in 2011,” BASF said in its 2011 annual report. “Growing demand was accompanied by increasing raw material costs, which we were largely able to pass on to the market,” BASF says.
Sinopec, which has seen some of the biggest revenue gains in the past decade, says its board in 2011 refined the company’s business strategy to focus on increased efficiency, safe production, and improved energy savings as well as reduced emissions. The chemical business “achieved excellent results through market expansion, management improvement and structure adjustment,” says Wang Tianpu, vice chairman and president of Sinopec. Demand for chemical products increased at a more moderate pace in 2011, and “prices for chemical products declined from the first quarter highs, and slumped in the fourth quarter,” Tianpu says.
Sabic says new products and ventures helped the company grow—including an agreement with Sinopec to collaborate on polycarbonate production, as well as other agreements with Mitsubishi, Rayon, Montfibre, ExxonMobil and Asahi Kasei in specialties. Sabic also started production at its Saudi Kayan petrochemical complex at Al-Jubail, Saudi Arabia. “New projects and capacity growth are integral to [Sabic’s] future performance. When combined with an increasingly diverse product portfolio, the company reduces market risk significantly and establishes a platform to better serve our customers’ needs and facilitate [its] long-term strategic objectives,” says Mohamed Al-Mady, vice chairman and CEO of Sabic.
Dow posted double-digit gains in revenue and earnings for the year. The company says a strong R&D pipeline and the benefits of lower-cost feedstocks bolstered results. “We delivered these results in the midst of an often unpredictable economic environment, which is validation of the resilience of our company,” Dow chairman and CEO Andrew Liveris said in the company’s 2011 annual report. Overall, Dow says that despite a slowdown in the global economic recovery, it “remained focused on strategy, delivering revenue and earnings growth, expanding its global footprint, and launching new, innovative solutions that address customer and consumer needs.”
Larger diversified chemical makers and industrial gases firms continued to be industry’s biggest spenders. BASF spent $2.9 billion on projects in 2011, Sabic spent $2.8 billion, Dow, $2.7 billion, and Sinopec, $2.6 billion. The sharp ramp-up of spending at industrial gas makers continued in 2011 with Air Liquide, Praxair, Air Products, and Linde all ranking in the top 10 for capital expenditures.
Agricultural and flavors and fragrances producers posted the highest R&D spending ratios. Monsanto, Syngenta and flavors and fragrances producer Givaudan reported the highest R&D spending rations, with 11.7%, 8.5% and 7.5% of total sales, respectively.
Industry as a whole will likely not be able to match 2011 growth rates with forecasts for 2012. Demand has slowed globally and second-half forecasts are being cut. BASF in July cut its 2012 global chemical production growth forecast to 3.5% from the 4.1% rate it expected earlier in the year. Recession in Europe and deceleration in China are the cause.
* All figures in millions of U.S. dollars. Ranking includes companies with chemical revenues of more than $3 billion for fiscal years ending September 30, 2011 through June 30, 2012.
a Excludes oil and gas; b includes intersegment sales; c excludes refining; d excludes pharma and/or other non-chemical businesses;
q fiscal year ended March 31, 2012; qq fiscal year ended June 30, 2012; qqq fiscal year ended September 30, 2011; qo fiscal year ended Oct. 31, 2011; qm fiscal year ended May 31, 2012; qa fiscal year ended August 31, 2011; na not available; nm not material.
Exchange rates used for dollar conversion based on rates at end of each company’s respective fiscal year. Exchange rates include $1=1.85 Brazilian reals; 0.64 British pound; 6.34 Chinese renminbi; 0.77 euro; 3.75 Saudi Arabian riyal; 1150 South Korean won; 0.935 Swiss franc as of December 31, 2011. $1=50.87 Indian rupees; 82.82 Japanese yen; and 3.06 Malaysian ringgit as of March 31, 2012.
Several companies with substantial chemical operations do not publicly report chemical revenues. These companies include ChemChina, Koch Industries, and Petrochina. Chemical sales for Sabic and integrated oil firms include intersegment sales. Data sources include company reports, regulatory filings, and Thomson Reuters (New York).:
|2011 ranking||Year ago ranking||Company (headquarters)||2011 chemical sales in millions $||Change from last year||2011 total sales in millions $||Chemical revenues as percent of overall sales||2011 chemical operating income in millions $||Change from last year||2011 capital spending in millions $||2011 chemical R&D in millions $||2011 chemical employees|
|3||4||Sabic (Saudi Arabia)||62,469||34.2||50,640||nm||10,285||31||2,838||219||40,000|
|4||2||Dow Chemical (U.S.)||59,985||11.8||59,985||100||3,601||29||2,687||1,646||51,705|
|5||5||Sinopec (China) b||58,170||29.1||395,374||15||3,991||71||2,553||71,607|
|6||6||Royal Dutch/Shell (Netherlands; U.K.)b||46,963||18.5||470,171||10||634|
|8||8||LyondellBasell (The Netherlands) c||37,333||20.0||51,035||73||3,301||62||793|
|9||10||Mitsubishi Chemical (Japan) d, q||32,658||2.1||38,223||85|
|10||9||Ineos Holdings (Switzerland)||27,530||-3.1||27,530||100||1,850||na||12,807|
|11||12||Total (France) b||26,841||8.5||239,362||11|
|12||13||Bayer (Germany) d||22,011||6.5||47,340||46||1,346||14||1,152||1,244||35,800|
|13||18||Formosa Plastics Group (Taiwan)||21,869||-7.6||74,719||29||27,205|
|14||14||Akzo Nobel (Netherlands)||20,343||3.8||20,343||100||1,576||13||692||433||57,240|
|15||SK Innovation (Korea) d||19,900||60,600||33||686||na|
|17||16||Air Liquide (France)||18,736||3.7||18,736||100||3,114||3||46,200|
|18||15||Sumitomo Chemical (Japan) d, q||18,274||-0.3||23,511||78||639||-34||23||18||29,839|
|21||21||Reliance Industries (India) a, q||16,922||11.2||70,105||24||1,776||-17|
|22||28||Toray Industries (Japan) d, q||16,832||8.1||-||1,387||10||13||7||40,227|
|23||19||Mitsui Chemicals (Japan) d, q||16,801||15.8||18,701||90||489||12,782|
|25||PTT Global Chemical (Thailand)||15,643||26.3||156,426||10||931||73||NA|
|27||23||LG Chem (South Korea)||14,962||14.5||14,962||100||2,024||1,911||10,000|
|28||26||PPG Industries (U.S.)||14,885||10.9||14,885||100||1,597||23||390||445|
|29||PetroRabigh (Saudi Arabia)||14,234||13.9||14,234|
|31||31||Honam Petrochemicals (South Korea)||13,919||47.6||13,919||100||1,322||27||830||26|
|32||46||3M (U.S.) d||13,747||11.6||29,611||46||2,845||5|
|35||25||Shin-Etsu (Japan) q||12,646||-0.6||12,646||100||1,667||9||980||139||16,167|
|36||35||Monsanto (U.S.) q a||11,822||12.8||11,822||100||2,502||56||540||1,386||26,100|
|38||42||Sasol (South Africa) qq||11,556||2.4||20,839||55|
|44||44||Air Products (U.S.) qqq||10,082||11.7||10,082||100||1,622||17||1,582||119||18,900|
|47||45||Asahi Kasei (Japan) d, q||9,535||1.9||18,989||50||1||-30||NA|
|48||41||DIC Corp. (Japan) d, q||9,402||3.2||9,402||100||448||34||133||21,572|
|52||48||Tosoh (Japan) d, q||8,261||9.3||8,261||100||405||158||11,221|
|53||Asahi Glass (Japan)||8,078||-6.9||15,572||52||1,943||-24|
|55||76||Showa Denko (Japan)||7,729||12.9||11,092||70||590||38||279||424||11,542|
|57||62||Eastman Chemical (U.S.)||7,178||22.9||7,178||100||1,021||18||457||158||10,000|
|61||72||Grupo Alfa (Mexico)||6,588||na||13,263||50||454||na|
|62||86||Ashland (U.S.) qqq||6,502||13.3||6,502||100||130||-48||201||89||15,000|
|63||59||Dow Corning (U.S.)||6,430||7.2||6,430||100||NA||NA|
|65||Orica (Australia) (qqq)||6,182||-5.5||6,182||100||1,028||-7||60||48||14,000|
|67||87||CF Industries (U.S.)||6,098||53.8||6,098||100||2,790||211||247||2,500|
|68||60||Hitachi Chemical (Japan) d,q||6,004||9.7||6,004||100||525||14||367||318||15,930|
|71||SCG Chemical (Thailand)||5,981||25.6||59,808||10||303||-27|
|72||93||Liaoning Huajin Tongda Chemical (China)||5,926||56.9||5,926||100||163||120||201|
|73||67||Taiyo Nippon Sanso (Japan) q||5,837||12.1||5,837||100||428||29||391||47||10,269|
|74||96||Sekisui Chemical (Japan)||5,769||4.4||11,649||50||284||-9|
|76||91||PKn Orlen (Poland)||5,574||29.8||33,771||17||4||-97|
|77||66||Kaneka (Japan) q||5,478||10.5||5,478||100||256||22||353||220||3,278|
|78||Johnson Matthey (U.K.)||5,466||15.2||19,248||28||451||28||6,700|
|79||69||Mitsubishi Gas Chemical (Japan) d, q||5,444||17.8||5,444||100||282||473||427||198||4,979|
|80||71||Teijin (Japan) d,q||5,384||5.7||10,312||52||144||1|
|81||78||Tasnee (Saudi Arabia)||5,240||22.9||5,240||100||1,442||72||283||45||1,096|
|82||52||Momentive Specialty Chemicals (U.S.)||5,207||13.3||5,207||100||368||-33||(64)||70||5,300|
|84||83||Merck KGaA (Germany)||4,987||22.1||13,318||37||2,923||54||347||13,615|
|85||109||Hengyi Petrochemical (China)||4,926||68.0||4,926||100||432||2||268|
|86||85||Occidental Petroleum (U.S.)||4,815||0.2||23,939||20||861||97||234||3,000|
|88||79||Airgas (U.S.) q||4,746||11.6||4,746||100||556||19||356||15,000|
|89||90||Kuraray (Japan) q||4,499||4.0||4,499||100||667||na||475||197||6,776|
|92||77||Denki Kagaku Kogyo (Japan) q||4,402||2.3||4,402||100||247||-13||271||101||4,921|
|93||81||Daicel Chemical Industries (Japan) q||4,269||10.9||4,269||100||395||57||142||144||7,747|
|94||84||JSR (Japan) q||4,224||3.2||4,224||100||434||-8||239||108||5,259|
|96||92||Avery Dennison (U.S.)||3,972||6.9||6,000||66||313||2||65|
|97||100||Valspar (U.S.) qo||3,953||22.5||3,953||100||-40||nm||66||115||10,000|
|99||94||Nippon Shokubai (Japan)||3,871||11.7||3,871||100||375||5||252||134||3,779|
|103||101||Rockwood Holdings (U.S.)||3,669||14.9||3,669||100||567||58||279||59||9,700|
|104||102||Westlake Chemical (U.S.)||3,620||14.1||3,620||100||447||18||177||1,811|
|105||129||Tokuyama (Japan) q||3,408||-2.1||3,408||100||166||-32||945||141||5,506|
|106||95||RPM (U.S.) qm||3,382||-0.9||3,382||100||238||17||40||9,025|
|108||126||Georgia Gulf (U.S.)||3,222||14.3||3,222||100||66||3,744|
|109||114||W.R. Grace (U.S.)||3,211||20.0||3,211||100||384||63||141||69||6,300|
|110||99||Zeon (Japan) q||3,173||-2.4||3,173||100||375||-4||259||134||2,900|
|112||107||Cabot (U.S.) qqq||3,102||14.2||3,102||100||230||4,100|
|113||112||Cytec Industries (U.S.)||3,073||11.8||3,073||100||235||-2||112||5,500|
|Source: Company reports; Thomson Reuters (New York); CW research. See footnotes at end of text.|
|(2011 total revenues in dollars)|
|(2011 revenues in dollars)|
|PTT Global Chemical||15,643|
|(2011 revenues in dollars)|
|(R&D expenditures as percentage of sales)|
|(2011 capital expenditures in dollars)|