business
GLOBAL TOP 5 0 CHEMICAL PRODUCERS Strong dollar helps U.S. share of total chemical sales increase, but trims sales for producers in other regions Patricia Layman C&EN London
the previous year. When translated into dollars, however, the region's chemical sales declined 4.4%. Even in Japan, which rimarily because of currency effects, suffered an economic downturn in the latcombined sales of the global Top 50 ter part of 1997, sales were up 4.3% from chemical producers declined slight 1996 when measured in Japanese y e n ly in 1997 from 1996 levels. Yet 1996's but when expressed in dollars, they delargest producer, BASF, increased its clined 6.2%. chemical sales by 18% and maintained its Leading the list, for the third year runnumber one position. ning, is Germany's BASF. The five largest Chemical sales for the world's 50 larg chemical firms, ranked in terms of chemiest chemical manufacturers in 1997 to cal sales, remain the same as in 1996, altaled $381 billion, down 0.6% from aggre though with one switch in the order. Dugate sales for the 1996 list. Producer pric Pont and Hoechst traded places in the es for the most part held firm, or even ranking: DuPont moved up from fifth to improved somewhat, around the world. second, and Hoechst, which is beginning And volumes were steady throughout the to show the effects of its restructuring and chemical world, as well. has a lower proportion of chemical sales The problem lay almost entirely in the in its corporate total, has slipped from the currency effects of the U.S. dollar, which second spot to fifth. Bayer and Dow strengthened in 1997 by an average of Chemical retained their third and fourth nearly 10% against the other currencies slots, respectively. used by major chemical producers. And With a slight overall decline in comthat strengthening built on a trend that bined sales, the threshold for making the began the previous year. Top 50 declined slightly, too. In the rankMeasured in European currency units— ing of 1996 sales, the last company to the nominal common currency used in the make the cutoff was Mitsui Toatsu, with European Union, home to nearly half of sales of $3.66 billion (C&EN, July 21, the Top 50 producers—European Union 1997, page 15). Based on 1997 sales, chemical sales were up 7.1% in 1997 from Chevron now closes the list with chemical sales of $3.63 billion. Altogether, 24 companies based in Europe are on the roster, accounting for 55% Profit margins edged of the Top 50's total 1997 chemical sales. up in 1997 Two are newcomers: the much-enlarged Clariant, which merged with the specialty Average chemical operating profit margin, %a chemicals operations of Hoechst last year, 15 has entered the rankings at number 14. Compatriot firm Ciba Specialties entered at 30. For the 1996 ranking, Ciba's sales 1θ[ were included in the chemical sales of Novartis, which then spun off its specialties at the beginning of 1997. As expected, 5[ Unilever disappeared from the 1997 ranking, following the sale of its specialty 01 chemicals operations to ICI. 1090 91 92 93 94 95 96 9? The U.S. fielded 16 companies on the Note: Based on C&ÊN's annual listing of the global list, to account for about 30% of the Top Top 50 chemical producers, a Chemical operating profite as a percent of chemical sates. 50's total chemical sales. Monsanto, which split off its chemicals operations
P
Ι1ίΚ%
European firms still dominate global Top 50 chemical sales Japanese firms 11%
European firms 55%
U.S. firms 30%
Global Top 50 sales in 1997 s $381 biUton
to form Solutia last year, slipped off the list, and Chevron, which had just missed making the list for 1996, edged its way back on for 1997. Seven Japanese companies are on the list, although their rankings have changed substantially as financial accounts become more transparent and easy to read. The impact of the weakening yen and the economic crisis, however, served to reduce the number of Japanese firms by two, and the Japanese share of total chemical sales dropped from 14% in 1996 to 11% in 1997. One of the Japanese losses was Mitsui Toatsu, which merged with Mitsui Petrochemical to create Mitsui Chemicals. A finer analysis of chemical sales, however, combined with the impact of the yen, kept Mitsui Chemicals just off the list for 1997. An-
Dollar strengthened markedly in 1997 Average value per U.S. $1.00 in 1997
35.77 Belgian franc 0.611 British pound Dutch guilder 1.95 5.84 French franc 1.73 German mark 36.31 Indian rupee 1,703 Italian lira 120.99 Japanese yen 7.07 Norwegian crowrι 3.745 Saudi riyal 1.43 Swiss franc South Korean won 951.29 28.81 Taiwanese dollar
% change 1996-97 3
-15.5% 4.6 -15.4 -14.1 -15.3 -2.5 -10.4 -11.2 -9.6 0 -15.3 -18.3 -5.0
a Calculated from average exchange rates for each year.
JULY 20, 1998 C&EN 3 7
business
BASF retains top ranking in list of global Top 50 chemical producers B e ink
ne
1997
1996
Chemical operating profits
Chemical sales
Total sales, 1997 ($ millions)
1997 ($ millions)
$ 32,166.5 45,079.0 31,719.6 20,000.0 30,044.0
$27,046.9 21,295.0 19,178.2 19,056.0 16,293.8
171,588.6 18,116.6 122,379.0 12,334.4 43,569.1
% change 1996-97
Operatiri profit mar
As % of total sales
1997 ($ millions)
17.9% 3.8 13.4 0.4 -1.2
84.1% 47.2 60.5 95.3 54.2
$2,619.2 3,554.0 1,710.4 3,031.0 1,354.0
14,251.6 13,349.2 14,024.0 9,997.9 9,954.3
-3.1 6.2 6.9 5.2 8.0
8.3 73.7 11.5 81.1 22.8
1,200.5 795.9 1,368.0 806.6 702.5
-3.8 -4.5 14.1 25.9 12.0
8.4 6.0 9.8 8.1 7.1
% change 1996-97
9.7< 16.7 8.9 15.9 8.3
1 2 3 4 5
1 5 3 4 2
6 7 8 9 10
6 8 9 20 10
Shell (U.KVNetherlands) ICI (U.K.) Exxon (U.S.) b Akzo Nobel (Netherlands) Elf Aquitaine (France)
11 12 13 14 15
11 17 12 18
Rhône-Poulenc (France) Sumitomo Chemical (Japan) Dainippon Ink & Chemicals (Japan) Clariant (Switzerland) Norsk Hydro (Norway)
15,412.0 8,433.2 8,445.0 7,017.2 13,595.9
9,868.6 8,196.9 7,420.7 7,017.2 6,874.1
19.0 1.3 8.6 335.8 12.1
64.0 97.2 87.9 100.0 50.6
737.6 548.5 351.5 709.7 259.8
47.0 28.3 -0.3 338.3 -37.8
7.5 6.7 4.7 10.1 3.8
16 17 18 19 20
16 14 21 22 29
Huls (Germany) Mitsubishi Chemical (Japan) General Electric (U.S.) Union Carbide (U.S.) SABIC (Saudi Arabia)
6,751.2 14,327.6 90,840.0 6,502.0 6,414.7
6,751.2 6,740.0 6,695.0 6,502.0 6,414.7
11.0 -3.9 3.2 6.5 15.3
100.0 47.0 7.4 100.0 100.0
250.9 190.9 1,476.0 1,045.0 1,228.3
-23.3 259.8 0.7 13.5 4.4
3.7 2.8 22.0 16.1 19.1
21 22 23 24 25
13 23 26 39 27
Toray Industries (Japan) Henkel (Germany) DSM (Netherlands) BOC (U.K.) Amoco (U.S.)
8,990.1 11,570.8 6,357.3 6,491.3 32,836.0
6,342.6 6,186.9 6,122.1 6,017.5 5,941.0
2.6 38.6 20.8 -1.7 4.3
70.6 53.5 96.3 92.7 18.1
453.1 873.1 531.4 840.5 732.0
3.7 52.5 28.5 -2.0 -20.8
7.1 14.1 8.7 14.0 12.3
26 27 28 29 30
25 7 19 28
—
Solvay (Belgium) Novartis (Switzerland) ENI (Italy) Air Liquide (France) Ciba Specialties (Switzerland)
8,692.9 21,484.2 35,653.6 6,576.0 5,389.7
5,906.5 5,737.6 5,668.2 5,458.1 5,389.7
15.7 19.0 -1.5 15.8 16.0
67.9 26.7 15.9 83.0 100.0
430.5 1,143.1 212.6 4,764.0 588.4
6.2 29.7 79.2 18 70.5
7.3 19.9 3.8 87.3 10.9
31 32 33 34 35
30 36 33 38 34
British Petroleum (U.K.) Huntsman Corp. (U.S.) Total (France) Praxair (U.S.) Eastman Chemical (U.S.)
71,175.9 5,000.0 32,738.5 4,735.0 4,678.0
5,114.6 5,000.0 4,889.2 4,735.0 4,678.0
-9.8 11.1 16.0 6.4 -2.2
7.2 100.0 14.9 100.0 100.0
777.9 na 398.2 848.0 568.0
-3.5
15.2
—
—
21.0 15.8 -14.3
8.1 17.9 12.1
36 37 38 39 40
31 37 40 43 49
Asahi Chemical (Japan) Occidental Petroleum (U.S.) Degussa (Germany) AlliedSignal (U.S.) Air Products (U.S.)
10,593.2 8,016.0 8,848.0 14,472.0 4,636.7
4,590.6 4,349.0 4,274.7 4,254.0 4,122.0
1.4 -3.0 13.3 6.0 12.3
43.3 54.3 48.3 29.4 88.9
153.8 497.0 323.5 542.0 719.4
3.8 -27.2 7.5 -4.4 18.9
3.4< 11.4 7.6 12.7 17.5
41 42 43 44 45
42 24 47 44 46
Zeneca (U.K.) Formosa Plastics (Taiwan) Ashland (U.S.) Rohm and Haas (U.S.) Arco Chemical (U.S.)
8,506.4 6,244.1 14,200.0 3,999.0 3,995.0
4,120.5 4,049.7 4,047.0 3,999.0 3,995.0
-7.1 8.3 9.5 0.4 1.0
48.4 64.9 28.5 100.0 100.0
504.4 443.3 160.0 685.0 256.0
3.7 27.8 -5.3 9.3 -52.6
12.2 10.9 4.0 17.1 6.4
46 47 48 49 50
32 45 41
Showa Denko (Japan) Roche (Switzerland) Sekisui Chemical (Japan) Reliance Industries (India) Chevron (U.S.)
6,593.9 12,931.2 7,471.7 3,691.2 40,583.0
3,979.2 3,948.9 3,862.6 3,691.2 3,632.0
10.7 20.8 0.3 53.5 6.1
60.3 30.5 51.7 100.0 8.9
226.2 na 121.2 795.0 362.0
16.8
5.7
—
—
-33.7 48.2 21.1
3.1 21.5 10.0
—
— —
BASF (Germany) DuPont (U.S.) Bayer (Germany) Dow Chemical (U.S.) Hoechst (Germany)
12.1% -6.4 23.7 -9.8 -2.9
Note: Ranking based on chemical sales only, to facilitate comparison with C&EN's list of Top 100 U.S.-based producers and subsidiaries (C&EN, May 4, page 22). Excluded where possible are formulated products such as pharmaceuticals and cosmetics, and specialty equipment, energy, and other nonchemical operations, a For chemical operations only for firms with chemical sales less than 90% of total sales; corporatewide spending for all other firms, b Chemical operating profits are after tax. na = not available.
3 8 JULY 20, 1998 C&EN
1997 ($ millions)
$2,065.0 1,900.0 1,384.0 1,198.0 1,258.3
Capital spending8 % change As % of 1996-97 chemical sales
-1.7% 36.2 39.0 -8.0 -14.9
7.6% 8.9 7.2 6.3 7.7
1997 ($ millions)
$1,213.3 na 914.6 785.0 526.5
R&D spending8 As % of % change 1996-97 Chemical sales
8.4%
4.5%
—
—
11.1 3.2 2.1
4.8 4.1 3.2
— —
17.4 8.0 7.5 5.4 5.0
na na 177.0 322.9 291.3
— —
12.8 48.1 382.7 -17.5
7.5 9.0 4.6 6.5
na na na 240.5 na
— — —
— — —
454.0
3.4
—
—
897.3 96.6 na 755.0 2,002.6
-15.8 12.2
13.3 1.4
10.5 2.0
2.7 0.9
2,473.0 1,067.8 1,049.0 538.5 496.6 na 617.5 665.2 325.9 449.4
67.0 -30.0 -35.0 -16.0 -12.1
—
182.8 62.0 na 157.0 93.5
—
—
4.7 97.1
11.6 31.2
96.6 344.8 594.5 1,298.6 na
55.3 -28.3 -22.4 -48.6
1.5 5.6 9.7 21.6
—
—
na 150.5 225.5 132.0 na
654.2 232.2 203.2 1,283.1 360.4
4.0 -16.6 13.4 na na
11.1 4.0 3.6 23.5 6.7
445.5 na 411.2 902.0 749.0
33.3
8.7
—
—
-32.4 0.1 5.1
8.4 19.0 16.0
351.1 na na na 870.0
-0.1
7.6
— — —
— — —
-8.5
21.1
540.5 1,157.7 na 254.0 263.0
-31.4 na
13.1 28.6
—
—
-24.0 7.8
6.4 6.6
2.1 27.0 18.4 na
8.8 8.1 11.3 26.0
351.6 320.4 437.4 958.0 na
0.2 4.5 6.6
1.3 3.2 2.9
—
—
-1.3 43.0
2.4 1.5
—
—
na 12.8 na
2.4 3.7 2.2
—
—
125.8 506.4 96.9 na 208.1
4.7 -30.0 33.1
2.1 8.8 1.7
—
—
na
3.9
na na na 79.0 191.0
— — —
— — —-
na na na na 114.0
— — — —
— — — —
0
2.8
na
8.5
— —
— —
348.8 na na 201.0 82.0 na 232.9 na 9.9 na
9.7 3.8
7.5 1.2
.1.7 4.1
5.0 2.1
—
—
0
5.9
—
—
na
0.3
other company formed via an intra-Japanese merger—Mitsubishi Chemical, which was created several years ago from Mitsubishi Kasei and Mitsubishi Petrochemical—took some time to show improved results, but improvements havefinallyshown up in its dramatically better operating profits. Three companies from other countries make up the remainder of the Top 50. Saudi Arabia's Saudi Basic Industries Corp. (SABIC) is by far the largest of these three; the other two are Taiwan's Formosa Plastics and India's Reliance Industries. Following a major expansion program, Reliance enters the list for the first time at number 49. These three companies compose 1997's "rest of the world" category, which accounts for chemical sales of $14.2 billion. Consolidations continue to play a hand in shaping the list of the Top 50. For example, Degussa will not be on the 1998 list, with its sales folded into those of its merger partner Huls, the chemicals subsidiary of Germany's Veba. And Akzo Nobel may well show significantly higher chemical sales after its acquisition this spring of Britain's Courtaulds. Mergers also tantalize with potential entries to the list. For example, a deal completed last month made Equistar—a joint venture of Lyondell Petrochemical and Millennium Chemicals that now includes Occidental Petroleum's petrochemical operations—the U.S.'s largest light olefins producer. The 1996 ranking, for the first time, included data on capital spending and R&D spending for those companies that indicate spending by chemical sector or for which chemicals make up more than 90% of a company's total activities. Although the data in the 1996 list could provide only a snapshot of the industry's spending, now, with two years' data, changes in capital expenditures and R&D spending are shown in the 1997 ranking. These year-to-year changes will become permanent additions to C&EN's Top 50 survey. Two obvious points emerge from this added data. What first is apparent are frequent and frequently sizable cuts in capital spending throughout the industry in 1997. Chemical capital spending by the Top 50 producers in 1997 was $32.3 billion, or an average of 8.5% of total chemical sales, down an average 10% from total 1996 spending and down a full percentage point as a percentage of chemical sales. On second inspection, a counterbalancing trend in the relatively stronger research and development spending by the Top 50 is evident. Total R&D spending that could be identified was $7.67 billion, a rise of about 2%. In both 1996 and 1997, R&D spending was, on average, 2% of total chemical sales. R&D spending underpins the future health of the chemical industry, which may be one reason why companies are reluctant to trim such spending. But capital expenditures also help underpin the performance of the industry by continually adding new economies of scale, introducing performance improvements, and launching new processes for companies. It will be interesting to see whether the decline in capital spending is a blip or a trend.^ JULY 20, 1998 C&EN 39
