12:24 PM | October 7, 2013 | —Lindsay Frost
BASF has maintained its top spot in CW’s Billion Dollar Club 2012—our annual ranking of companies by chemical revenues on a dollar basis—with China’s Sinopec taking the second slot. US companies ExxonMobil and Dow Chemical take the three and four spots, respectively, and Sabic rounds out the top five. Revenues were generally higher in 2012, with the median rise at 4.5%. However, the continuing recession in Europe dampened results for those players, and the top five have all posted decreases in chemical sales. Japanese chemical makers have posted declines a dollar basis, since the yen weakened significantly. The yen fell 15% against the dollar in the 12-month period ended 31 March 2013, the end of the fiscal year for most Japanese companies.
US companies, with 34 out of 110 entries, are well represented. US chemical makers have recorded a median sales rise of 4.6%. Asian and Mideast companies make up 31 out of 110 companies, although the Chinese economy, characterized by weak market demand, slowed down in the first half of the year. However, GDP growth came in at 7.8% for the year, Sinopec says in its annual report 2012. Europe has 25 companies, with the majority from Germany.
“After three years of recovery from the great recession, the global economy stumbled in 2012, with the euro area in recession again, a slowdown in China became particularly pronounced, and confidence erosion and other negative factors spread,” ACC says in its Year End 2012 Situation and Outlook. “Global manufacturing entered a soft period this summer, with particular weakness in Europe and East Asia.”
By sector, BASF says transportation grew the most, with the strongest growth in the United States and Japan. Consumer goods posted the biggest decline for the company. Dow says that one of its weakest profit contributors was its Dow Corning joint venture. Conditions for polysilicon continued to worsen as trade disputes over polysilicon commenced. Performance plastics had Dow’s highest sales. ExxonMobil showed strength from North American ethane, and Sabic says olefins had strong production in 2012.
“Several major end-use markets for chemistry have recovered in the United States, especially those tied to export markets and business investment,” ACC says. “But many markets, however, still remain below their 2007 peaks,” ACC says.
This year is BASF’s seventh in the top spot, which it took from Dow. BASF says that, in 2012, its “agricultural solutions segments achieved new records, while development in our [other] chemicals business were weaker than we had anticipated at the beginning of the year.” For the chemical industry overall, 2012 was a mixed year, BASF says. Growth in worldwide chemical production slowed, and the emerging markets of Asia showed markedly weak growth in the first half. “The 2012 business year was characterized by unusually stark economic fluctuations. After showing positive development at the beginning of the year, leading economic indicators turned bleak as the year progressed,” BASF says in its annual report.
Dow, number four, notes growth in the United States and Canada as well—despite losses due to currency translation, naphtha-based margin contraction, and weakness in Europe and Asia. “In 2012, the industry grappled with thin-to-negative margins for naphtha-based ethylene producers in Europe and in Asia,” Andrew Liveris, CEO and chairman of Dow, said in its fourth-quarter and full-year earnings call, on 31 January. “The dichotomy, of course, is the Americas, which have shown exceptional margin strength, as wet shale gas dynamics are fundamentally changing the game for integrated North American–based producers, like Dow. This is clearly evidenced by operating rates in the United States and Canada being in the 90s, while Asia and Europe have been in the 70s. In addition, we reached significant milestones with critical, enterprise-growth projects, such as our investments on the US Gulf Coast and our Sadara joint venture in the Middle East. These projects are game changers to Dow’s bottom line,” Liveris adds.
The ascent of Sinopec, rising to the number-2 spot in chemicals after entering the list in 2001 in the 30th position, is remarkable. However, the company notes in its annual report that demand for chemical products was sluggish globally, and, “combined with the impact of low-cost chemical feedstock from the Middle East and North America, the price of chemical products dropped sharply. Domestic chemical products market conditions generally followed that of the international market.” Sinopec chemical revenues declined 2% in 2012, while segment operating income fell 95%. However, the consumptions of synthetic resin, synthetic fiber, and synthetic rubber increased, the company says. Domestic consumption of ethylene grew as well. Chemicals account for about 9% of Sinopec’s sales.
ExxonMobil says the highest chemical demand in 2012 was in Asia, and the company expects that trend to continue growing, with Asia’s share of global chemical demand to reach 50% over the next 10 years. This situation is spurring new capacity investments across the globe, particularly in North America, tied to growing supplies of ethane, the company says of chemical markets in its 2012 annual report. “Most chemical demand growth is in Asia, driven by manufacturing of consumer products for both worldwide export and to serve the growing Asian middle class,” ExxonMobil says. “These consumers are expected to purchase more packaged goods, appliances, cars, tires, and clothing, many of which are manufactured from the chemicals we produce. Asia/Pacific has accounted for more than two-thirds of global demand growth since 2000, and we expect this trend to continue.”
R&D reached over $5 billion, with BASF and DuPont each spending over $2 billion. Dow was not far behind, spending $1.7 billion in 2012.
“Research and development expense increased 15% to support continued growth in breeding, biotechnology, and crop chemistry,” DuPont says in its annual report. “The company is expanding its offerings addressing safety, environment, energy, and climate challenges in the global marketplace by developing and commercializing renewable, biobased materials; advanced biofuels; energy-efficient technologies; enhanced safety and protection products; and alternative energy products and technologies. The goals are tied directly to business growth, including increasing food production, increasing renewable sources for energy and raw materials, and providing greater safety and protection for people and the environment.”
BASF spent over $5 billion in capital expenditures—including the integrated toluene diisocyanate facility at Ludwigshafen; a new methylene di-para-phenylene isocyanate plant at Chongqing, China; and an acrylic acid and superabsorbent production complex at Camaçari, Brazil.
ACC says overall capital spending levels have remained subdued since the end of the recession. “With narrowing margins, austere market conditions, lower operating rates, and a high level of uncertainty, a number of capital investment projects were extended or delayed. Furthermore, capital spending budgets were slashed to conserve cash flow, and, as a result, US capital investment in chemistry fell [in 2012].”
Despite the slow global recovery, the chemical industry continues to make strong profits. Growth has already accelerated in several markets during the first half of 2013, and the US will continue to shine on top while Europe struggles to maintain margins. Markets in Asia, which is now a primary driver of global markets, will report strong demand.
“The global recovery stalled in 2012, with Europe slipping back into recession and manufacturing in China slowing sharply. In the US, uncertainty about the election, fiscal cliff, and the overall pace of recovery curbed growth. More than three years since the official end of the recession, the majority of manufacturing industries remain below their prerecession peak. But, while growth has slowed in the developed countries, emerging market economies continued to expand,” ACC says.
Most companies on the list are optimistic about 2013. ACC says the softening of the manufacturing recovery has dampened domestic chemical demand, and the weakness in Europe and elsewhere has hurt export sales, but exports remain a bright spot for the industry, and several end-use markets are continuing to show strength—including in vehicles and housing.
“Following a decade of high and volatile natural gas prices that destroyed industrial demand and lead to the closure of many gas-intensive manufacturers, shale gas offers a new era of American competitiveness that will lead to greater investment, industry growth, and employment,” says Kevin Swift, chief economist at ACC.
All figures in millions of US dollars. Ranking includes companies with chemical revenues of more than $3 billion for fiscal years ending 1 July 2012 through 30 June 2013.
a Excludes oil and gas; b includes intersegment sales; c excludes refining; d excludes pharma and/or other nonchemical businesses; q fiscal year ended 31 March 2013; qq fiscal year ended 30 June 2013; qqq fiscal year ended 30 September 2012; qo fiscal year ended 31 October 2012; qm fiscal year ended 31 May 2013; qa fiscal year ended 31 August 2012; NA not available; NC no change.
Exchange rates used for dollar conversion based on rates at end of each company’s respective fiscal year. Exchange rates include $1=.49 Brazilian reais, 0.033 Thai baht, 0.0001 Indonesian rupiah, 6.34 renminbi, 0.1793 Norwegian kroner, 0.076 Mexican pesos, 1.09 Swiss francs, and 0.26 Saudi riyals as of 31 December 2012. $1=50.87 Indian rupees, ¥0.01, and 3.06 Malaysian ringgit as of 31 March 2013.
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).
|2012 ranking||Year ago ranking||Company (headquarters)||2012 chemical sales in millions $||Change from last year||2012 total sales in millions $||Chemical revenues as percent of overall sales||2012 chemical operating income in millions $||Change from last year||2012 chemical capital spending in millions $||2012 chemical R&D in millions $||2012 chemical employees|
|1||1||BASF (Germany) a||$75,552||5%||$103,922||75%||$14,095||(0)%||$5,268||$2,309||NA|
|2||5||Sinopec (China) b||66,079||(2)||446,882||6||189||(95)||3,785||NA||NA|
|3||2||ExxonMobil (US) b||60,885||(6)||482,295||33||4,885||(10)||1,418||NA||NA|
|4||4||Dow Chemical (US)||56,786||(5)||56,786||100||1,665||(54)||2,614||1,708||54,353|
|5||3||Sabic (Saudi Arabia) d||50,390||(19)||50,451||83||10,916||6||2,871||NA||40,000|
|6||6||Royal Dutch Shell (Netherlands; UK) b||45,757||(3)||467,153||10||NA||NA||875||NA||NA|
|7||8||LyondellBasell (The Netherlands) c||37,671||(7)||45,352||67||4,329||21||1,275||NA||NA|
|10||9||Mitsubishi Chemical (Japan) d; q||28,990||12||37,224||67||1||(59)||NA||1||30,186|
|11||11||Total (France) b||26,050||(3)||264,634||11||NA||NA||NA||NA||NA|
|12||13||Formosa Plastics Group (Taiwan)||25,236||15||98,266||27||NA||NA||NA||NA||16,336|
|13||27||Reliance Industries (India) a; q||21,837||NC||21,837||100||1,793||(11)||1,790||NA||NA|
|14||18||Sumitomo Chemical (Japan) d; q||20,784||13||39,869||50||478||(25)||1,232||13||30,396|
|16||17||Air Liquide (France)||20,230||6||20,230||100||3,344||5||2,649||NA||NA|
|18||12||Bayer (Germany) d||19,886||10||39,760||67||2,136||78||1,196||1,056||35,300|
|20||15||SK Innovation (South Korea) d||18,100||(9)||26,081||25||NA||NA||NA||NA||NA|
|24||22||Toray Industries (Japan) d; q||16,843||NC||16,843||100||886||(36)||1,040||566||42,584|
|26||29||PetroRabigh (Saudi Arabia) c||16,540||NA||16,540||NA||NA||NA||NA||NA||NA|
|27||21||Reliance Industries (India) a; q||16,095||(5)||18,949||24||1,319||(25)||1,498||NA||NA|
|28||25||PTT Global Chemical (Thailand)||15,643||26||156,426||10||931||73||NA||NA||NA|
|30||28||PPG Industries (US)||15,200||2||15,200||100||1,402||(12)||411||455||39,200|
|31||31||Lotte Chemical (South Korea) (formally Honam Petrochemical)||14,928||7||14,928||100||349||(73)||561||27||2,484|
|32||23||Mitsui Chemicals (Japan) d; q||14,926||(11)||14,951||90||46||NA||601||NA||NA|
|34||36||Monsanto (US) q a||13,504||14||13,504||100||3,148||26||723||1,517||21,500|
|40||38||Sasol (South Africa) d; qq||11,588||NC||57,146||55||NA||NA||NA||NA||NA|
|44||74||Sekisui Chemical (Japan)||10,958||9||10,977||75||633||122||NA||NA||22,202|
|46||47||Asahi Kasei (Japan) d; q||10,559||11||16,680||50||343||(42)||848||NA||NA|
|47||32||3M (US) d||10,346||(25)||29,900||16||2,258||(20)||NA||NA||NA|
|49||44||Air Products (US) qqq||9,611||(5)||9,611||100||1,282||(15)||1,521||126||20,900|
|51||51||ENI (Italy) d||8,472||nc||167,930||25||902||61||227||NA||5,668|
|53||62||Ashland (US) qqq||8,206||26||8,206||100||302||132||298||137||15,000|
|54||57||Eastman Chemical (US)||8,102||13||8,102||100||800||(15)||470||198||13,500|
|56||80||Teijin (Japan) d; q||7,915||47||8,675||52||131||(9)||329||352||16,637|
|57||48||DIC (Japan) d; q||7,460||(4)||7,460||100||397||23||282||NA||20,273|
|58||61||Grupo Alfa (Mexico)||7,417||12||15,152||50||577||27||117||NA||4,700|
|59||82||Momentive Specialty Chemicals and Performance Materials (US)||7,113||36||7,113||100||163||(55)||231||107||9,680|
|60||52||Tosoh (Japan) d; q||7,086||(3)||7,086||100||233||2||255||129||11,268|
|62||65||Orica (Australia) (qqq)||6,741||8||6,741||100||655||(36)||628||NA||15,000|
|63||71||SCG Chemical (Thailand)||6,653||11||13,633||10||NA||NA||NA||NA||NA|
|64||84||Merck KGaA (Germany) d||6,502||30||14,779||50||NA||NA||NA||400||17,092|
|66||91||Cepsa (Spain) d||6,440||44||35,460||25||211||15||113||NA||1,438|
|68||76||PKN Orlen (Poland)||6,332||14||33,771||17||389||NA||154||NA||NA|
|70||63||Dow Corning (US)||6,119||(5)||6,119||100||NA||NA||NA||NA||12,000|
|72||67||CF Industries (US)||6,104||nc||6,104||100||2,959||6||523||22||2,500|
|75||72||Liaoning Huajin Tongda Chemical (China)||5,776||(4)||5,776||100||32||(80)||188||14||10,247|
|81||77||Kaneka (Japan) q||5,050||2||5,050||100||138||62||360||227||8,600|
|83||73||Taiyo Nippon Sanso (Japan) q||4,965||(2)||4,965||100||247||(22)||360||34||11,468|
|84||79||Mitsubishi Gas Chemical (Japan) d; q||4,961||3||4,961||100||69||(21)||319||NA||5,323|
|85||88||Airgas (US) q||4,957||4||4,957||100||596||8||325||NA||15,000|
|86||68||Hitachi Chemical (Japan) d; q||4,925||(2)||4,925||100||289||4||509||158||17,732|
|87||81||Tasnee (Saudi Arabia)||4,778||(9)||4,778||100||1,096||(23)||273||NA||NA|
|89||86||Occidental Chemical (US)||4,580||(5)||24,253||100||720||(16)||357||NA||NA|
|91||NA||Lonza (US) (Switzerland)||4,287||NA||4,287||100||366||NA||316||127||10,789|
|92||96||Avery Dennison (US) d||4,255||7||6,035||71||363||16||64||NA||NA|
|93||106||RPM (US) qm||4,078||8||3,777||100||236||(28)||91||49||10,553|
|94||97||Valspar (US) qo||4,020||1||4,020||100||482||NA||89||117||9,755|
|95||94||JSR (Japan) q||3,938||6||3,938||100||371||10||295||107||5,659|
|96||89||Kuraray (Japan) q||3,916||nc||3,916||100||476||(10)||472||167||7,332|
|97||93||Daicel Chemical Industries (Japan) q||3,805||(11)||3,805||100||278||(29)||NA||NA||NA|
|99||55||Showa Denko (Japan)||3,676||(52)||7,843||70||(21)||NA||141||NA||NA|
|100||92||Denki Kagaku Kogyo (Japan) q||3,621||(6)||3,621||100||197||(9)||260||88||5,206|
|101||104||Westlake Chemical (US)||3,571||(1)||3,571||100||608||36||391||NA||1,895|
|102||103||Rockwood Holdings (US)||3,506||(4)||3,506||100||438||(20)||286||62||10,200|
|103||NA||Incitec Pivot (Australia)||3,500||NA||3,500||100||173||NA||96||9||5,242|
|104||105||Tokuyama (Japan) q||3,408||(2)||3,408||100||166||(32)||945||141||5,506|
|106||112||Cabot (US) qqq||3,300||6||3,102||100||290||19||281||73||4,826|
|107||109||W.R. Grace (US)||3,155||(2)||3,155||100||57||(85)||138||64||6,500|
|108||53||Asahi Glass (Japan)||2,972||(63)||12,871||20||168||(28)||380||NA||NA|
|109||78||Johnson Matthey (UK) d||2,879||1||3,602||67||396||7||182||142||7,552|
|110||99||Nippon Shokubai (Japan)||2,861||--||2,681||100||104||NA||302||109||3,938|
|(2012 total revenues in dollars)|
|(2012 total revenues in dollars)|
|(2012 total revenues in dollars)|
|Royal Dutch Shell||$45,757|
|Top R&D spenders|
|(R&D expenditures in dollars)|
|(2012 capital expenditures in dollars)|