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C&EN’s top 50 U.S. chemical producers With growth hard to come by, chemical producers looked to acquisitions in 2016 ALEXANDER H. TULLO, C&EN NEW YORK CITY
T
Dow heads the ranking again Once again, Dow Chemical sits atop the ranking with $48.2 billion in sales for 2016. It posted a 1.3% decline in revenues for the year, but it still widened its lead over number two ExxonMobil, which experienced a 7.4% drop in chemical sales to $26.1 billion. A year ago, C&EN predicted that Dow might disappear from the ranking this year owing to its pending merger with DuPont to form DowDuPont. The two firms expected to complete the deal in 2016. But the European Commission delayed it because of worries about the impact the merger—plus Bayer’s purchase of Monsanto and
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C&EN | CEN.ACS.ORG | MAY 8, 2017
Chevron Phillips’s ethylene cracker in Texas is nearing completion.
More online Check out an interactive graphic of C&EN’s top 50 U.S. chemical producers, including data going back to 2004, at cenm.ag/ top50us2016.
ChemChina’s acquisition of Syngenta— would have on European farmers. The Dow-DuPont deal still hasn’t closed, but the companies have taken steps to ensure clearance later this year. DuPont inked an agreement to divest much of its crop protection business and related R&D to FMC. In return, DuPont will get $1.6 billion in cash and FMC’s health and nutrition business. To appease the EC, Dow is also selling its ethylene acrylic acid polymers business to South Korea’s SK. Dow did complete one deal in 2016, absorbing its former joint venture Dow Corning, which was ranked 16 last year.
Dow is also tops in market cap Dow’s market capitalization grew by a whopping 20.5% in 2016, helping it edge out the company it is merging with, DuPont, for the top spot in value. Ecolab held on to number three, and Praxair beat out industrial gas rival Air Products for the fourth slot. But DuPont spin-off Chemours provided the biggest chemical stock story of 2016. Early last year, Chemours’s stock price was weighed down by meager results, debt from DuPont, and the liability from 3,500 personal injury suits stemming from per-
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he struggle chemical makers face as they attempt to grow revenues is clearly evident from C&EN’s ranking of the top 50 U.S. chemical producers. The 50 firms combined for $259.9 billion in sales in 2016, the year that forms the basis of the survey, a 5.6% decline from the amount the same firms posted the year before. And it wasn’t as if sharp sales drops at a few firms weighed down the entire group. The decline was dispersed evenly throughout the industry. Of the 50 firms, only nine saw sales increase, and for a few of those—including Olin, Kraton, and Westlake Chemical—the improvement was the result of large acquisitions. Part of the explanation for the decline can be found in oil prices, which dipped to nearly $30 per barrel early last year, their lowest levels since 2003. Although oil prices rebounded to more than $50 per barrel by the end of the year, chemical prices didn’t have time to catch up. Moreover, even though consumer spending and employment are healthy, the U.S. economy has been posting anemic growth. Gross domestic product grew by only 1.6% last year. According to the American Chemistry Council, a trade association, the U.S. chemical industry also posted only a 1.6% increase in volumes last year. Income also declined. The 44 firms among the 50 that report profits combined for $33.6 billion in operating income, a decrease of 9.6% versus the year-ago period. Although profits declined, they were still historically high for the chemical industry. Moreover, only one firm, Momentive Performance Materials, posted a deficit. Wall Street expects better performance from the industry in the future. Market capitalization, which is determined mainly by stock price, of the top 50’s 31 publicly traded firms increased 12.5% to $367.6 billion. The industry outpaced the Standard & Poor’s 500 stock index, which climbed 9.5%. The American Chemistry Council also expects better times for the industry in 2017. It forecasts 3.6% volume growth.
Top 50 U.S. chemical firms Sales slipped for nearly all companies in 2016 as raw material costs stayed low. RANK 2016 2015
COMPANY
CHEMICAL CHEMICAL CHANGE SALES AS % SALES ($ OF TOTAL FROM SALES MILLIONS) 2015
1 2 3 4 5 6
1 2 3 4 5 6
Dow Chemical ExxonMobil DuPontd PPG Industriesd Praxaird Huntsman Corp.
$48,158 26,058 19,679 14,270 10,534 9,657
7 8 9
8 7 9
Eastman Chemical Air Productse Chevron Phillips
9,008 8,554 8,455
10 11 12 13 14 15
11 10 12 14 15 18
16 17 18
13 30 22
19 20 21 22 23 24 25 26 27 28 29 30 31 32
21 19 17 20 25 24 23 27 29 32 31 -33 40
Ecolabd Mosaic Lubrizol Chemours Celanese Westlake Chemical Honeywell Olin Occidental Petroleum Trinseo CF Industries Monsantof Hexion FMC Ashlande Albemarle Cabot Corp.e Momentived H.B. Fullerg NewMarket Corp. Williams Partnersd Stepan Kraton
33 34 35
34 26 35
36 37 38
37 -39
39
--
40
43
41 42 43 44 45 46
41 44 42 46 47 48
47
--
48
49
49 50
SECTOR
-11.7% 3.9 4.0 3.0 -6.1 -14.2
11.7% 22.7 20.7 16.5 22.0 6.3
$79,511 30,053 12,748 15,549 19,332 9,189
7.1% 19.7 32.0 15.2 12.0 6.6
15,457 17,012 15,465
9.2 11.0 na
13.6 7.1 na 1.8 16.9 11.5
Midland, Mich. Irving, Texas Wilmington, Del. Pittsburgh Danbury, Conn. The Woodlands, Texas Kingsport, Tenn. Allentown, Pa. The Woodlands, Texas St. Paul Plymouth, Minn. Wickliffe, Ohio Wilmington, Del. Irving, Texas Houston
1,428 1,864 na
-8.9 -0.4 na
15.9 21.8 na
Process services Fertilizers Specialties Diversified Diversified Petrochemicals
1,040 506 na 96 911 582
-4.7 -62.7 na -57.5 31.5 -39.4
na 16,841 na 6,060 8,357 10,890
na 3.0 na 1.6 10.9 5.3
12.4 86.9 37.2
Fluorochemicals Chlorine chemistry Petrochemicals
na 240 571
na 122.5 5.4
na 5.0 15.2
Morris Plains, N.J. Clayton, Mo. Houston
na 8,036 4,348
na 3.0 13.1
-6.4 -14.5 -26.1 -17.0 0.2 -11.7 -26.7 -16.0 -2.4 0.5 -4.3 8.9 -0.6 68.6
100.0 100.0 26.0 100.0 100.0 61.0 100.0 100.0 100.0 100.0 100.0 25.6 100.0 100.0
1,654 1,599 1,483
-5.2 -47.6 -7.3
100.0 100.0 100.0
Polymers Fertilizers Agrochemicals Specialties Agrochemicals Specialties Specialties Specialties Silicon chemistry Specialties Fuel additives Petrochemicals Detergents Polymers, pine chemicals Specialties Specialties Polymers
346 666 116 72 529 119 510 250 -23 202 363 na 133 136
32.6 -51.6 -91.0 -75.5 172.9 -63.5 -12.4 2.0 def 18.6 1.7 na 11.2 648.9
9.3 18.1 3.3 2.1 16.1 3.9 19.0 10.4 def 9.7 17.7 na 7.5 7.8
Berwyn, Pa. Deerfield, Ill. St. Louis Columbus, Ohio Philadelphia Covington, Ky. Charlotte, N.C. Boston Waterford, N.Y. St. Paul Richmond, Va. Tulsa, Okla. Northfield, Ill. Houston
2,410 15,131 3,964 2,055 6,139 6,066 8,161 3,044 2,606 2,058 1,416 2,304 1,354 2,907
14.4 4.4 2.9 3.5 8.6 2.0 6.2 8.2 def 9.8 25.6 na 9.8 4.7
224 298 236
32.5 -43.1 -5.8
13.5 18.6 15.9
2,168 2,912 603
10.3 10.2 39.1
Pigments Polymers Pigments
84 54 110
490.2 -44.7 29.1
6.2 4.5 9.6
1,180 905 1,284
7.2 6.0 8.5
277
14.2
28.5
1,044
26.5
100.0
Electronic materials Pine chemicals
Philadelphia Columbia, Md. The Woodlands, Texas Dallas Parsippany, N.J. Mayfield Heights, Ohio Allentown, Pa.
1,364 1,192 1,145
1.1 -10.4 6.5
100.0 100.0 100.0
970
-3.9
100.0
908
-6.2
160
0.3
17.7
Innospec Reichhold Koppers PolyOne Innophos Emerald Performance Materials GCP Applied Technologies Minerals Technologies
883 850 830 779 725 663
-12.7 -10.8 -14.5 -2.8 -8.1 -6.1
100.0 100.0 58.6 23.3 100.0 100.0
Fuel additives Polymers Coal tar chemicals Pigments Inorganics Specialties
97 na 37 128 79 na
-14.6 na nm -5.8 53.6 na
11.0 na 4.4 16.4 10.9 na
624
-10.2
46.0
73
-13.3
592
-5.3
36.1
103
50
Omnovah
--
549
-9.8
72.2
Specialties
Calgon Carbon
514
-3.9
100.0
Activated carbon
Chemtura W.R. Grace Americas Styrenics Kronos Worldwide AdvanSix Ferro Versum Materialse Ingevity
-1.3% -7.4 -4.9 0.2 -2.2 -6.2
100.0% 11.9 80.0 96.7 100.0 100.0
Diversified Petrochemicals Diversified Paints, inorganics Industrial gases Diversified
-6.6 -13.5 -8.6
100.0 100.0 100.0
Diversified Industrial gases Petrochemicals
7,653 7,163 6,500 5,400 5,389 5,076
-3.8 -19.5 -7.1 -5.5 -5.0 13.7
59.1 100.0 100.0 100.0 100.0 100.0
4,864 4,821 3,756
-25.0 125.0 -4.8
3,717 3,685 3,514 3,438 3,282 3,019 2,677 2,411 2,233 2,095 2,049 1,921 1,766 1,744
CHEMICAL IDENTIFIABLE OPERATING OPERATING CHANGE OPERATING CHEMICAL RETURN ON PROFITSa FROM PROFIT ASSETS CHEMICAL ($ MILLIONS) 2015 MARGINb HEADQUARTERS ($ MILLIONS) ASSETSc
Construction chemicals Inorganics
$5,629 5,917 4,081 2,356 2,315 606
833
19.3
1,181 na 776 919 643 na
8.2 na 4.8 13.9 12.3 na
11.6
North Charleston, S.C. Englewood, Colo. Durham, N.C. Pittsburgh Avon Lake, Ohio Cranbury, N.J. Cuyahoga Falls, Ohio Cambridge, Mass.
336
21.6
1.9
17.4
New York City
492
20.9
56
251.6
10.2
Beachwood, Ohio
451
25
-62.2
4.8
Moon Township, Pa.
775
12.4 3.2
a Operating profit is sales less administrative expenses and cost of sales. b Operating profit as a percentage of sales. c Chemical operating profit as a percentage of identifiable assets. d Sales include a significant amount of nonchemical products. e Fiscal year ended Sept. 30, 2016. f Fiscal year ended Aug. 31. g Fiscal year ended Nov. 29. h Fiscal year ended Nov. 30. def = deficit. na = not available. nm = not meaningful. MAY 8, 2017 | CEN.ACS.ORG | C&EN
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Corporate realignment marked 2016 Thanks to deal making and corporate restructuring, the chemical industry looks noticeably different today than it did a year ago. Five firms that were in C&EN’s ranking
Top 25 foreign-owned firms European chemical companies dominate the top 10. RANK COMPANY
U.S. CHEMICAL SALES CHANGE ($ MILLIONS) FROM 2015
U.S. CHEMICAL SALES AS % OF TOTAL U.S. SALES
2016
2015
1
1
BASF
2
2
LyondellBasell Industries
9,077
-8.9
65.0
3
3
Agriuma
8,880
-8.5
100.0
4
6
Air Liquide
6,898
73.3
96.0
5
5
Lindea
5,003
-3.7
100.0
Germany
6
7
Covestro
3,567
-5.5
100.0
Germany
$16,256
-6.3%
100.0%
COUNTRY Germany The Netherlands Canada France
7
13
Solvay
3,173
24.0
100.0
Belgium
8
8
Bayer
2,896
-2.7
26.0
Germany
9
11
Arkema
2,843
-0.6
100.0
France
10
9
Evonik Industries
2,758
-4.0
100.0
Germany
11
18
Shin-Etsu Chemicalb
2,721
8.8
100.0
Japan
12
10
AkzoNobel
2,720
-7.1
100.0
The Netherlands
13
14
Indorama
2,681
13.9
100.0
Thailand
14
15
Syngenta
2,306
-0.9
72.0
Switzerland
15
17
Alpek
2,104
7.7
100.0
16
21
Lonza
1,945
21.1
100.0
Mexico Switzerland
17
16
PotashCorp
1,820
-20.8
100.0
Canada
18
19
Sasolc
1,594
-8.3
100.0
South Africa
19
22
DSM
1,590
-1.0
100.0
The Netherlands
20
24
Mitsui Chemicalsb
1,563
2.1
100.0
Japan
21
23
Lanxess
1,468
-3.1
100.0
Germany
22
--
Wacker Chemiea
1,460
47.7
100.0
Germany
23
25
Tronox
1,354
10.7
100.0
Australia
24
20
Yara
1,303
-17.6
100.0
Norway
25
--
Israel Chemicals
1,070
-9.0
100.0
Israel
Note: Figures from companies that report in native currencies were converted to dollars at average annual exchange rates from the Federal Reserve. a Sales include a significant amount of nonchemical products. b Fiscal year ended March 31, 2016. c Fiscal year ended June 30.
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C&EN | CEN.ACS.ORG | MAY 8, 2017
last year are no longer DuPont there. Dow Corning researchers work is now entirely part on biobased of Dow. Merck KGaA butyl alcohol. purchased Sigma-Aldrich, which was 38 last year. Solvay bought number 36 Cytec Industries. Axiall, number 28 last year, was purchased by Westlake Chemical, which climbed three places to number 15 in the ranking. Elastomers maker Kraton, number 32, bought number 45 Arizona Chemical and now also makes pine chemicals. Mergers brought other big changes to the ranking. Olin’s chemical sales skyrocketed by 125.0% because of its purchase of Dow’s chlorine chemistry unit. It is now 17 in the ranking. Albemarle’s sales declined by 26.7% after the divestment of its Chemetall metal surface treatment business to BASF, pushing it down two places to number 25. Slow economic growth and uncertainty are driving chemical companies to such mergers and acquisitions (M&A). “With rare exceptions, companies will increasingly find it difficult to enhance returns through organic growth and cost reduction within,” notes PwC chemicals deals leader Craig Kocak in a recent report. At the IHS Markit World Petrochemical Conference in March, Dave Witte, general manager of oil markets, midstream, downstream, and chemicals at IHS Markit, echoed the sentiment. “If you are uncertain about where you are going to get that top-line and bottom-line growth, you know you can get it through M&A,” he told the audience. Spin-offs filled most of the void left by the acquired companies. New to the ranking are Honeywell’s nylon spin-off AdvanSix, Air Products’ former electronic materials business Versum Materials, and the former W.R. Grace construction materials unit GCP Applied Technologies. These debut at numbers 37, 39, and 47, respectively. Others new to the list are Williams Partners at number 30, which operates a cracker in Geismar, La., and activated carbon firm Calgon Carbon at number 50. At least three firms should be gone next year. Dow and DuPont executives expect to
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fluorooctanoic acid pollution at the former DuPont plant in Parkersburg, W.Va. Last June, Citron Research, a short seller betting that Chemours’s stock would plummet, even predicted that Chemours was heading to bankruptcy court within the next 18 months. But a favorable court ruling and better business performance turned Chemours into a “buy” rather than a “sell.” Its shares increased from $5.36 at the end of 2015 to $22.09 by the close of 2016, a 315.5% increase in market capitalization. Interestingly, another big stock gainer is Kronos Worldwide, which like Chemours makes the white pigment titanium dioxide. Huntsman Corp. is readying a spin-off of its own pigments business, Venator, later this year.
complete their merger in August. Last month, Germany’s Lanxess completed its purchase of number 33 Chemtura. Williams’s presence on the list is likely a one-year occurrence, as the company’s chemical business is being acquired by Nova Chemicals.
Market capitalization Stock values for most firms jumped in 2016, a few by triple digits. RANK
CHANGE FROM 2015
2016
2015
COMPANY
1
2
Dow Chemical
$69,299
20.5%
2
1
DuPont
63,344
9.2
Petrochemicals are a profit center In past years, many major oil companies, chief among them Shell and BP, shed large parts of their chemical businesses to focus on oil and gas. ExxonMobil, however, stayed loyal to petrochemicals. That strategy is now paying off. Petrochemicals made up only 11.9% of ExxonMobil’s $219 billion in annual sales last year, but they generated 68.8% of the oil giant’s profits. Low oil and gas prices pinched its performance in exploration—especially its U.S. business, which lost $4.2 billion after taxes in 2016. In a letter to shareholders, new ExxonMobil Chief Executive Officer Darren Woods notes that the chemical results “highlight the value of our integrated business model.” Occidental Petroleum, a much smaller firm, suffered enough in its hydrocarbon exploration and distribution businesses to lose $446 million overall despite $571 million in profits from chemicals. Chevron Phillips Chemical posted $1.7 billion in after-tax earnings even as one of its parent firms, Chevron, reported a loss. The other parent, refiner Phillips 66, netted a profit. All these firms are deepening their involvement in petrochemicals. Oxy started up a cracker, a joint venture with Mexichem, in Ingleside, Texas, earlier this year. Both ExxonMobil and Chevron Phillips are putting the final touches on massive petrochemical projects of their own. ExxonMobil and Saudi Basic Industries Corp. are also studying an integrated project in Texas.
MARKET CAP. ($ MILLIONS)
3
3
Ecolab
34,205
1.0
4
4
Praxair
33,387
14.4 11.5
5
5
Air Products
31,295
6
6
PPG Industries
24,382
-7.6
7
8
Celanese
11,079
12.1
8
7
Eastman Chemical
11,011
10.4
9
9
Mosaic
10,271
5.6
10
14
Albemarle
9,684
54.1
11
15
FMC
7,562
44.5
12
10
CF Industries
7,338
-22.9
13
11
Westlake Chemical
7,217
2.0
14
13
Ashland
6,798
-0.9
15
16
NewMarket Corp.
5,001
10.4
16
12
W.R. Grace
4,620
-18.0
17
18
Huntsman Corp.
4,511
67.3
18
17
Olin
4,236
48.6
19
--
Chemours
4,034
315.5
20
19
Cabot Corp.
3,144
23.0
21
23
Trinseo
2,627
90.9
22
21
H.B. Fuller
2,420
32.5 64.7
Get to Know Metrohm
Titration
Ion Chromatography
23
25
Stepan
1,825
24
24
Innospec
1,651
26.1
25
28
Kronos Worldwide
1,384
111.7
26
27
Ferro
1,195
27.9
27
29
Innophos
1,019
82.2
28
30
Kraton
883
73.7
29
--
Calgon Carbon
864
-2.0
30
31
Koppers
834
121.9
31
32
Omnova
451
64.2
Electrochemistry
Spectroscopy
Laboratory
Process
Find out more at www.metrohm.com
Note: Based on share prices on Dec. 30, 2016, and Dec. 31, 2015. These 31 companies are the publicly traded firms on the top 50 list that generate more than half of their sales through chemical manufacturing.
BASF again heads the foreign ranking It should come as no surprise that BASF, perennially the largest chemical company in the world, has more sales in the U.S. than any other foreign-owned chemical firm. The company continues to invest heavily in the U.S. Notably, it is building an ammonia plant in Freeport, Texas, with Norway’s
Yara. It is also investing in plasticizers, herbicides, and the polyurethane intermediate methylene diphenyl diisocyanate. Two companies, Formosa Plastics and Braskem, dropped off the foreign ranking because they have not posted results for 2016. Two additions are Wacker Chemie, which posted a 47.7% increase in regional sales during the year, and Israel Chemicals. ◾
www.metrohm.com
MAY 8, 2017 | CEN.ACS.ORG | C&EN
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