Earnings skyrocket in chemical industry Results reported at press time by U.S. chemical companies show that the first quarter of 1995 was very good indeed. Spurred by rising prices, increased demand, and improving foreign markets, sales increased dramatically for most firms. And companies in many cases are doubling, tripling, and even quadrupling earnings over last year's first-quarter levels. Thus, profitability is booming. Of 20 firms with sales of more than $200 million sampled by C&EN, eight report more than 100% earnings increases from last year's first quarter. And two—Georgia Gulf and IMC Global, formerly IMC Fertilizer—report close to 400% increases. At Georgia Gulf, with earnings up 374% from last year's first quarter to $60.2 million, unexpected production outages at chlorine-caustic soda and methanol units lowered sales volume, but this was more than made up by a 68% rise in the sales price of company products. Sales rose 63% to $314 million. Thus, the profit margin—earnings as a
percentage of sales—jumped to 19.2% from 6.6% in first-quarter 1994. IMC Global's earnings leapt 381% to $45.7 million. Wendell F. Bueche, chairman and chief executive officer, says, "IMC Global was able to effectively capitalize on virtually ideal business conditions during the period." He cites record purchases of concentrated phosphates and potash by China. And the North American agricultural sector began strong seasonal demand for crop nutrients. Sales surged 34% to $550 million and the profit margin rose to 8.3% from 2.3%. The largest dollar rise in earnings was at Dow Chemical, up 250% or $502 million to $633 million on a sales increase of 31% to $5.96 billion. This pushed the profit margin to 10.6% from just 4.0% in the first quarter of 1994. Dow's chairman and CEO, Frank Popoff, says, "Improving global conditions, advances in margin restoration, and the benefits of reengineering the company are producing strong results." Many firms cite continued improvement in foreign markets as one of the reasons for the rise in sales and earnings. This seems especially true for firms that export to, or manufacture products in, European and Pacific Rim nations. And
Many chemical firms racked up big earnings increases FIRST-QUARTER 1995 Sales
Earnings8
($ millions)
Air Products Albemarle Arco Chemical Dow Chemical Eastman Chemical
Change from 1994 Sales
Earnings
Profit margin15 1995
1994
14% 30 51 31 25
21% 35 180 250 136
9.0% 4.7 11.0 10.6 10.7
21.5 21.4 60.2 67.5 68.3
0 29 63 25 27
54 206 374 77 2
9.2 6.4 19.2 5.0 12.0
6.0 2.7 6.6 3.5 14.9
550.0 416.7 2,318.0 921.0 315.4
45.7 40.6 229.0 89.9 37.8
34 4 16 14 -6
381 13 18 26 12
8.3 9.7 9.9 9.8 12.0
2.3 9.0 9.7 8.8 10.1
766.1 756.0 985.0 1,453.0 602.5
38.4 65.0 96.0 210.0 23.6
27 24 15 29 9
151 55 43 197 7
5.0 8.6 9.7 14.5 3.9
2.5 6.9 7.8 6.3 4.0
$ 982.9 313.3 1,141.0 5,962.0 1,232.0
$ 88.6 14.6 126.0 633.0 132.0
Ethyl Geon Georgia Gulf W.R. Grace Great Lakes Chemical
234.3 336.2 314.0 1,345.2 569.0
IMC Global Lubrizol Monsanto Morton International Nalco Chemical Olin Praxair Rohm and Haas Union Carbide Witco
8.5% 4.5 5.9 4.0 5.7
a After-tax earnings from continuing operations, excluding significant nonrecurring and extraordinary items, b After-tax earnings as a percentage of sales.
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company executives expect improvement in these regions to continue—leading to better results for at least most of this year. But this optimism is tempered with caution about U.S. markets. J. Lawrence Wilson, chairman and CEO at Rohm and Haas, sums it up: "Rohm and Haas is optimistic about the rest of 1995 as long as worldwide economies remain favorable and raw material prices don't escalate rapidly. However, we do not expect the full year-over-year earnings comparison to be as dramatic as the comparison for the first three months of 1995." William Storck
New catalysts to boost polyethylene production Projecting that it can as much as triple production in existing units, Exxon Chemical has retrofitted a world-class polyethylene plant to use metallocene catalysts operating in condensed and supercondensed modes. Exxon says the retrofit at its Mont Belvieu, Texas, complex should raise production in a given unit 60 to 200% and cut unit costs 50%. Savings are expected from improved heat transfer and control in the reactor. Metallocene catalysts contain one or more cyclopentadienyl groups in combination with a transition metal. The preferred metallocenes, for Exxon's purposes, have two or more substituents on at least one of the cyclopentadienyl groups. Mixtures of metallocenes can also be used. The catalysts may be supported on particulate materials such as polymers, silica, or alumina. Metallocenes are slated to phase out currently used Ziegler-Natta catalysts in all of Exxon's polymer facilities around the world. Exxon also is joining with Hoechst of Germany and with Mitsui Petrochemicals of Japan to license metallocene technology. Douglas M. Selman, vice president for polymer technology at Exxon Chemical, says the company views metallocene catalysts as "the key to future polymer innovation. We have chosen to build a strong proprietary position around metallocene catalysts." Success in the polyolefins business is becoming ever more dependent on a strong patent position. With commercialization of the metallocene condensed mode technology, Exxon believes it can MAY 1,1995 C&EN 7
NEWS OF THE WEEK dominate global polyethylene produc tion in the near future. Its position should be further strengthened by its al liances with Hoechst and Mitsui. Exxon makes about 1.5 billion lb per year of polyethylene at the Mont Belvieu plant alone, notes Irwin L. Levowitz, vice president for polyethylene. 'Our first line of development is for the high er α-olefin polyethylenes, since this is where the greatest need exists today/' But the new technology is adaptable to polymers other than polyethylene. For example, Hoechst is interested in adapt ing it to polypropylene production. Hoechst and Exxon each produce about 600 million lb of polypropylene per year worldwide. The retrofit permits operation in con densed and supercondensed modes, boosting unit productivity and cutting unit costs. One problem with gas-phase polymerization processes has been the need to operate above the dew point of . the recycle stream to the reactor. Drop ping below the dew point usually meant "sticky" particles and incipient caking that could lead to shutdown. With con densed technology, up to 2 mole % en trained liquids can be tolerated. With su
percondensed technology, patented by Exxon in February, the tolerable entrained liquid can be as high as 50 mole %. Exxon expects to further develop metallocene chemistry with more innovative single-site catalysts. Ziegler-Natta cata lysts have catalytic sites of varying activ ity levels, notes Gregory L. McPike, vice president of Exxon's Exxpol venture. This produces variations in polymer products, such as variable branching or restricted molecular weight ranges. Sin gle-site catalysts produce more uniform products—allowing incorporation of comonomers and termonomers with more precise compositions and more specific properties. Joseph Haggin
Oklahoma bomb shows common items' power The devastation in Oklahoma City be lies the ordinariness of the likely bomb components that caused it. There are many indications a key component was ammonium nitrate, widely used as a fertilizer. Bomb dis
posal experts say terrorists the world over favor ammonium nitrate, and for good reason: It is cheap, easy to ac quire, and effective. Ammonium nitrate is available in fer tilizer form or as an industrial product. As such, its trade is not subject to special restrictions. And there are no controls on the sale of fuel oil, which, it is suspected, was mixed with ammonium nitrate to produce the Oklahoma bomb. By contrast, the commercial blasting agent ANFO (ammonium nitrate-fuel oil) is strictly controlled. To buy it, one needs a license from the Bureau of Al cohol, Tobacco & Firearms, and records of transactions are scrupulously kept, says Thomas T. Dowling of the Insti tute of Makers of Explosives, Washing ton, D.C. And the Administration is seeking tighter controls on other explo sive materials (see page 28). An ammonium nitrate bomb's pow er is clear from its reactions. Pure am monium nitrate is stable. But at 250 °C, it decomposes to produce gaseous products and heat: N H 4 N 0 3 - > N 2 0 + 2H 2 0 + 525 joules per g
New members elected by National Academy of Sciences At its 132nd annual meeting in Washington, D.C, last week, the Na tional Academy of Sciences elected 60 new members and 15 foreign asso ciates from 11 countries. Those elect ed bring the total number of active members to 1,733 plus 301 foreign as sociates. New members and associ ates who are chemists, chemical engi neers, or work in chemically related areas include: Jan L. Breslow, Frederick Henry Lenhardt Professor and director, Lab oratory of Biochemical Genetics & Metabolism, Rockefeller University, New York City. David Chandler, professor of chemistry, University of California, Berkeley. Vitalii I. Goldanskii, director, Semenov Institute of Chemical Physics, Moscow. Corey S. Goodman, investigator, Howard Hughes Medical Institute, and professor of biochemistry, UC Berkeley. Lowell P. Hager, professor of bio chemistry, University of Illinois, Urbana-Champaign.
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MAY 1,1995 C&EN
Clayton H. Heathcock, professor of chemistry, UC Berkeley. Robert Huber, head of department, Max Planck Institute for Biochemis try, Munich, Germany. Lily Yeh Jan, investigator, Howard Hughes Medical Institute, and pro fessor of physiology and biochemis try, University of California, San Francisco. Judith Kimble, investigator, How ard Hughes Medical Institute, and professor of biochemistry and molecu lar biology, University of Wisconsin, Madison. Alexander M. Klibanov, professor of chemistry, Massachusetts Institute of Technology. Stephen R. Leone, acting chief, quantum physics division, National Institute of Standards & Technology, and fellow, Joint Institute for Labora tory Astrophysics, University of Col orado, Boulder. Edwin N. Lightfoot, professor of chemical engineering, University of Wisconsin, Madison. Donald C. Malins, head, environ mental biochemistry division, Pacif
ic Northwest Research Foundation, Seattle. Vincent Massev, professor of bio logical chemistry, University of Michi gan, Ann Arbor. Charles S. Parmenter, Distinguished Professor of Chemistry, Indiana Uni versity, Bloomington. Gregory A. Petsko, Lucille P. Markey Professor, Rosenstiel Basic Med ical Science Center, Brandeis Univer sity, Waltham, Mass. Charles M. Radding, professor of human genetics and of molecular biophysics and biochemistry, School of Medicine, Yale University. Stuart L. Schreiber, investigator, Howard Hughes Medical Institute, and professor of chemistry, Harvard University. Douglas C. Wallace, professor of biochemistry, division of medical ge netics, neurology and anthropology, and chairman, genetics and molecu lar medicine, School of Medicine, Emory University, Atlanta. Carl E. Wieman, fellow, Joint Insti tute for Laboratory Astrophysics, University of Colorado, Boulder.
