BUSINESS
Global Top 50 Chemical Producers Show Rise In Profits And Sales • Total chemical sales in 1994 for the world's largest chemical producers rose 8% from 1993, profit margins also began climbing again Patricia L. Layman, C&EN London
T
he international chemical industry finally turned the corner in 1994, showing an increase in profit margins after declines in the previous four years. Total chemical sales chalked up by the world's 50 largest chemical producers rose to $331 billion in 1994, up 8% from 1993, after a decline of 9% the previous year. But more important for the health of the industry, profit margins began climbing again. After four consecutive years of decline, the average chemical operating profit margin for the year was 8.7%, compared with 7.2% the year before (C&EN, July 25,1994, page 17). That still leaves the Top 50 international chemical producers with a long way to go before they regain the 14.4% profit margin average established in 1989, the year C&EN began ranking the global Top 50 chemical producers. Nevertheless, 1994 results were mostly black ink—only EniChem, the chemicals arm of Italian government-owned oil company ENI, showed an operating loss. The year before, eight companies in the Top 50 posted operating losses. The changes were real: Exchange rate fluctuations played little role in the yearto-year differences, as currencies remained remarkably stable against the dollar. The two exceptions were the Swiss franc, 7% stronger against the dollar than in 1993, and the Japanese yen, which registered an 8% gain on top of a 14% gain the previous year. The top rankings also remained remarkably stable. The German Big Three
chemical companies—Hoechst, BASF, and Bayer—are unshakably part of the top five, as is DuPont. On this year's listing, Dow Chemical displaced ICI in the number five slot, following the British giant's spin-off in 1993 of its pharmaceuticals and life-sciences operations into Zeneca. The main losers in this year's ranking are Japanese firms. Only eight Japanese chemical producers are ranked among the global Top 50, down from 11 the previous year. However, Japanese chemical sales used for this year's ranking are not directly comparable with last year's, because C&EN used a more detailed approach for excluding nonchemical operations for Japanese companies. Thus, this year's listing of chemical sales of Japanese producers remaining on the list is more comparable with other countries' producers than in previous listings. With the drop in Japanese representatives, the number of U.S. companies rose two from last year to 17. The number of European companies on the list remained the same at 24. With the increased number of U.S. companies in the Top 50, their percent-
Industry's profit margins are on the mend Average chemical operating profit margin2i 15
| 10
5
0
1
-
ll-
11 1 • I I I 11 1989
90
91
92
93
94
Note: Based on C&EN's annual listing of the global Top 50 chemical producers, a Chemical operating profits as a percent of chemical sales.
Most currencies rose—but gently—against the dollar Change versus U.S. dollar, 1993-94 3
Currency
Japanese yen Belgian franc British pound Dutch guilder French franc German mark Italian lira Norwegian crown Saudi Arabian riyal Swiss franc
Average 1994 value per $1 U.S.
102.21 +8% 33.46 +3 +2 0.653 1.82 +2 +2 5.55 +2 1.62 -2 1,612.00 7.05 +1 0 3.75 1.37 +7
a Average exchange rates each year.
age of total Top 50 chemical sales rose 17% in 1994 to nearly $98 billion. European chemical sales were also up substantially, by 12%, to $189 billion. Europe continues to represent more than half the sales rung up by the world's 50 largest chemical producers. German companies in the Top 50—the Big Three in addition to Veba, Henkel, and Degussa— alone accounted for $71 billion in chemical sales. And the cutoff for appearing on the list showed a decided increase: a cutoff of more than $3 billion in sales, compared with $2.79 billion last year. Sales increases for these 50 producers came from improved economic conditions around the world, which translated into greater demand for chemicals. They also came from increased sales prices, particularly of petrochemicals and firststage polymers. Saudi Basic Industries Corp. (SABIC) provided one of the most dramatic examples of improved sales. After several years of just missing inclusion in the Top 50, the company zoomed to 38th place. However, the improvements in profitability for the group were even more dramatic. Operating profits in 1994 for the 50 global producers increased an avJULY 24,1995 C&EN
23
BUSINESS
Most global Top 50 chemical producers saw 1994 chemical sales growth Rank 1994 1993
Cherr ical operating profits
Chemical sales
Total sales, 1994 ($ millions)
1994 ($ millions)
As % of total sales
Change 1993-94
$ 30,640 28,744 39,333 26,803 20,015
$19,702 18,396 16,845 15,738 14,055
64% 64 43 59 70
13% 12 8 8 12
1 2 3 4 5
1 2 3 4 6
6 7 8 9 10
5 8 9 10 11
ICI (U.K.) Shell (U.K., Netherlands) Ciba (Switzerland) Elf Aquitaine (France) Asahi Chemical (Japan)3
14,072 129,123 16,094 37,418 9,588
11,450 11,058 9,710 9,599 9,588
81 9 60 26 100
9 7 -1 9 5
11 12 13 14 15
7 12 15 17 14
Exxon (U.S.) Rhone-Poulenc (France) Mitsubishi Chemical (Japan)3 Veba (Germany)5 ENI (Italy)
113,904 15,550 8,463 52,851 31,448
9,544 9,186 8,463 7,754 7,134
8 59 100 15 23
16 17 18 19 20
13 18 20 21 22
Akzo Nobel (Netherlands) Monsanto (U.S.) General Electric (U.S.) Sumitomo Chemical (Japan) Henkel (Germany)
12,202 8,272 59,800 5,332 8,585
6,334 5,939 5,681 5,332 5,230
21 22 23 24 25
23 28 26 25 24
Toray Industries (Japan)3 British Petroleum (U.K.) Solvay (Belgium) Norsk Hydro (Norway) Union Carbide (U.S.)
5,137 70,850 7,837 10,122 4,865
26 27 28 29 30
27 48 34 29 30
DSM (Netherlands) Degussa (Germany)0 Occidental Petroleum (U.S.) Roche (Switzerland) BOC (U.K.)C
31 32 33 34 35
36 31 33 32 35
36 37 38 39 40
37 38
41 42 43 44 45 46 47 48 49 50
— — 40 39 42 41
— 43
— 50 47 46
—
1994 ($ millions)
Change 1993-94
2% 8 16 5 13
817 230 260 405 133
714 521 1,208 329 254
6 5 12 3 3
108 nm 15 nm 15
11 6 24 na 8
954 1,479 78 na -532
10 16 1 na -8
132 168 1,613 na nm
52 72 10 100 61
7 5 13 -3 4
435 780 967 34 330
7 13 17 1 6
73 7 16 56 38
5,137 5,074 5,055 4,990 4,865
100 7 65 49 100
0 13 11 11 5
274 386 370 349 551
5 8 7 7 11
-4 nm 362 186 86
4,932 8,528 9,419 10,765 5,334
4,759 4,741 4,681 4,678 4,667
97 56 50 44 88
10 -7 15 0 6
224 na 368 na 592
5 na 8 na 13
nm na 100 na -1
Amoco (U.S.) Dainippon Ink & Chemicals (Japan)3 Air Liquide (France) Showa Denko (Japan) Eastman Chemical (U.S.)
30,273 4,608 5,721 4,364 4,329
4,662 4,608 4,405 4,364 4,329
15 100 71 100 100
15 1 7 -1 11
684 157 na 240 636
15 3 na 6 15
113 3 na 123 34
Mobil (U.S.) Unilever (U.K., Netherlands) SABIC (Saudi Arabia) Zeneca (U.K.) Mitsui Toatsu Chemicals (Japan)3
67,661 45,379 3,936 6,861 3,669
4,195 3,953 3,936 3,873 3,669
6 9 100 57 100
19 10 48 1 4
82 505 1,101 285 69
2 13 28 7 2
228 19 114 41 130
Sandoz (Switzerland) Total (France) Rohm and Haas (U.S.) Ube Industries (Japan)3 Arco Chemical (U.S.)
11,584 24,638 3,534 3,473 3,423
3,612 3,585 3,534 3,473 3,423
31 15 100 100 100
-2 7 8 -4 7
368 300 487 98 475
10 8 14 3 14
-1 16 82 103 12
Huntsman Chemical (U.S.) AlliedSignal (U.S.) W.R. Grace (U.S.) Air Products & Chemicals (U.S.) Chevron (U.S.)
3,400 12,831 5,093 3,485 35,230
3,400 3,272 3,218 3,150 3,065
100 26 63 90 9
84 17 11 8 13
na 409 338 529 322
na 13 11 17 11
na 32 -14 27 43
Hoechst (Germany) BASF (Germany) DuPont (U.S.) Bayer (Germany) Dow Chemical (U.S.)
$ 317 1,401 2,703 842 1,797
As % of chemical sales
Note: Ranking based on chemical sales only, to facilitate comparison with C&EN's Top 100 list (May 8, page 13). Excluded where possible are formulated products such as pharmaceuticals and cosmetics, and specialty equipment, energy, and other nonchemical operations, a Fiscal year ends March 31. b Includes oil division petrochemical sales. c Fiscal year ends Sept. 30. na = not available, nm = not meaningful.
24
JULY 24,1995 C&EN
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