SECTION TWO F I N A N C OF E S THE U.S. CHEMICAL INDUSTRY
Higher earnings bring no real improvement in profitability On the strength of a 12% increase in sales volume last year, major U.S. producers of basic chemicals managed to pull their profits off the plateau on which they had been mired during the previous three years. The 13% hike in profits lifted them past the previous peak of 1974. But it did little to improve the industry's profitability performance. Profit margins and return on stockholders' equity,
which had been slipping since 1974, were not essentially changed in 1978 as companies, in the face of persistent overcapacity, were unable to raise selling prices for their products in step with soaring costs of petrochemical feedstocks and energy. Thus, in terms of profitability, the industry found itself running faster but not actually making much headway. All in all, over the past decade
the major producers of chemicals have increased both sales and earnings at a rate of 11% a year. Profitability now certainly is considerably better than it was during the early 1970's. But margins and return on equity seem stuck well under the levels of the mid-1970's. If business sours later this year—or costs escalate even more rapidly than now—they may come under severe pressure.
Sales advance steadily for chemical industry and profits edge to new peak, but profitability continues to lag previous levels Net sales, $ billions
Net income, $ billions
801
51
70
71
72
Return on stockholders' equity,3 %
73
70
71
Profit margin,b %
18
a After-tax earnings as percentage of stockholders' equity, b After-tax earnings as percentage of net sales. Note: Data based on annual figures of 40 largest industrial chemical companies.
46
C&EN June 11, 1979
SHIPMENTS Chemical sales expanded last year in line with long-term trend $ Billions
1977
All manufacturing industries Chemicals and allied products Industrial chemicals 3 Drugs, soap, and toiletries
1976
1975
1974
1973
1972
1971
1970
1969
1968
$1503.8 $1335.1 $1185.7 $1039.4 $1017.9 $875.4 $756.5 $671.1 $634.0 $642.5 $603.2 126.5 113.9 104.1 89.7 83.7 65.0 57.4 50.9 48.5 47.4 44.8
Petroleum and coal products Rubber and plastics products, nee Paper and allied products
42.4 34.1
39.1 30.5
35.6 27.8
29.4 24.3
26.6 22.2
19.0 19.3
16.6 17.8
14.9 15.9
14.5 15.1
14.2 14.0
13.4 13.0
103.2 39.9
95.7 37.0
82.3 31.8
69.5 27.2
58.9 27.9
34.9 24.4
28.7 20.9
26.9 17.8
24.9 16.1
24.4 16.3
23.2 15.0
57.7
52.4
48.2
41.7
41.8
32.8
28.3
25.5
24.8
24.4
22.3
Annual change 1977-78 1968-78
13% 11
10% 11
8 12
12 10 16 10
10
10
a Excluding pigments nee = not elsewhere classified. Source: Department of Commerce
PRICES: For most chemical products, increases fail to match overall inflation Producer price indexes,* 1967 = 100
Annual average 1972 1973 1974
1971
1970
1969
1968
119.1 117.9
114.0 114.1
110.4
106.5 106.0
102.5
110.0 103.4
104.2 101.2
104.1 102.0
99.9 100.3
99.8 101.0
122.2
118.0 104.1
109.1 102.1
103.0
115.6 101.5 102.4
102.2 100.9 112.4 101.4 101.2
99.9
115.8 91.7
133.6 92.1
132.8 88.5
109.1 86.7
1978
1977
1976
1975
All commodities Industrial commodities
209.3 209.4
194.2
183.0 182.4
174.9
160.1
134.7
195.1
171.5
153.8
125.9
Chemicals and allied products Industrial chemicals Prepared paint
198.8 225.5 192.4
192.8 223.9 182.4
187.2 219.3 174.4
181.3 206.9 166.9
146.8 151.7 145.7
Paint materials
212.3
205.9
189.8
177.2
Drugs and pharmaceuticals
148.1 315.8 198.2
140.5
134.0
279.0 187.8
249.9 188.4
126.6 255.2 203.6
152.3 112.7 338.2 137.7
Plastic resins and materials Other chemicals and allied products
199.9 181.9
195.7
194.0 170.7
180.9 168.6
143.8
92.1
88.7
88.7
90.6
175.7
147.5
118.1
113.5
112.0
108.6
Rubber and plastic products
174.7
167.6
159.2
150.2
136.2
112.4
109.3
109.1
108.3
105.3
103.4
Fats and oils, inedible Agricultural chemicals and chemical products
113.2 104.3 228.3 96.6
110.0
Annual change 1977-78 1968-78
8% 7
7% 7 7 8
104.8 101.4
3 1 5 3
99.3 90.9 96.1
5
6 8 4
13 6
13 8
90.4
91.9
2
104.2
101.6
4
8 6
102.5
a Formerly called "wholesale price indexes." Source: Department of Labor
Chemical stocks in narrow range for past year Stock price index, 1954
100 a
300
250
U
200
150
100 1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979*
• C&EN weighted stock price index of Allied Chemical. American Cyanamid. Celanese. Dow Chemical. Ou Pont. Montanto. and Union Carbide: weighted according to number of shares outstanding for each company b First quarter
June 11. 1979 C&EN
47
FINANCIAL ANALYSIS: Profitability holds steady for larger companies, slips for smaller ones Operating profit margin 3
SALES OVER $500 MILLION 14.8% Air Products Akzona 10.0 Allied Chemical 16.3 22.7 American Cyanamid Cabot 18.0 Celanese Diamond Shamrock Dow Chemical
85
Du Pont
13.8 15.3 20.4
Ethyl Corp.
Net profit
7.3% 2.4
3.7 57 65 4.3 78 84
Return on invest-
Debt as % debt
% total sales abroad 0
4.4%
30.1% 37.9
20.9% na
36.8 29.3 37.5
20.3 34.8 26.6
3.2 26 4 8 47 3.0 53
Sales per employee 6
$ 73 57 102 62 90
Dividends as % of net income
19% 47 47
CAPITAL SPENDING' as % as % of of net plant sales
19.2% 4.9 15.4
23
18.0
36.3
23 3.2 22 34
36.8
20.9
79
40
95
21.6
41.6 46.4
12.6 47.1
144
43
28.3
128 80
41
18.2
46
20.1 15.6 7.4
26.0 22.6 20.5
20.9
09 2.1
132
59
16.2
44
14. 2
22.0 29.6 18.4
na 35 29
122 93 133
56
100
50
114 112
58 53
133 190 117
51 61 45
4.0 56
45 47
34.3
11.6
38.3 47.7
65 79
42 39
International Minerals Lubrizol
15.1 21.1 16.4
88 13.2
6.8 14.1
26.6 34.2 1.9
17.9 40.1
6.0
4.1
32.2
27.6
138 154 80
40 36 38
94
50 4 0
5 2 3.2
13.6 9.2 20.5
121
69
54 34
66
46
15.2 23.6
116 96
68 31
22.3 9.4
26
6.1 3 1 60 32
35.3
10.4
101
34
15.1
31.8 11.7
34.5 17.5
110 52
92 28
28.9
32.2
15.0 3.6 8.7
06 6 1
52.6 25.9
15.8 17.9
na na
4.7% 4.6%
32.0% 33.0%
20.9% 22.0%
$83 $71
47.4%
$183 na
32.1
20.3% 14.5 21.4
10.5 42.2
58.0 na
172
89
na 66.8 45.6 11.2
75
18.6
74.9
10.3 15.4 6.0
Mallinckrodt
18.8
7.9
5.3 14.1 4.4 9 1
Nalco Chemical
19.8
11.3
14.0
Petrolite Royster Stepan Chemical
19.4
9.2 09
3.7
9.3 09 34
36
4 0
15.8 43.6 38.7
5.8% 5.9%
4.9% 5.2%
24.9% 15.1%
14.4% 15.4%
na 39
9.5 83 46
17.5 33.4 18.0
MEDIAN 1978 MEDIAN 1977
14.0 14.3
28.3 30.4
International Flavors Liquid Air
9.6
3 2
50
SALES FROM $50 MILLION TO $500 MILLION Beker Industries 4.7% g g Big Three Industries 13.2% 35.8 7.6% Crompton & Knowles 2.8 10.1 3.9 Ferro 56 10.2 7.3 First Mississippi 5.9 1 9 2.7
Virginia Chemicals
na 1 6 25
25 3 6
5.3% 5.3%
g 12.2
19.0 21.9 22.9
1 6 46
13.0% 13.3%
Freeport Minerals
5.7 10.4 6.7
49
46 09 45
MEDIAN 1978 MEDIAN 1977
7.6 9 6
32.5 30.1 32.4
11.0 10.9
— 39.3 17.6 4.1 15.2
41
59
12.9
Hercules
Williams Cos. Witco Chemical
55
64
W. R. Grace
Union Carbide
121 82
S4
55
7.8
18.9 13.1 11.0
57
133
30
20.0
109 93
1.8
86
Stauffer Chemical Texasgulf Thiokol
46
24.8
20.9
11.3
60%
78 131
3.1
12.1 3.7
87% 123 101
36
6.2
Reichhold Chemicals Rohm & Haas
Sales as % of assets
Net plant as % of gross plant
69 59 37
5.8
Pennwalt
2.6 1 8 3 9
9.1
11.9
5 1
2.2%
46
5.2 55
National Distillers Olin
24.9% 12.5 24.9 20.7
74
Monsanto
R&D spending as % of sales
5.3
71
80
63
na 1 5
398 161
54
20 na 13
100 72
6.8
14.0 30.7
180
'9 51
8.9% 8.4%
21.3% 21.0%
2.5% 2.3%
116% 110%
55% 53%
6.9% 20.8
na na
89% 71
17.9 22.4 22.4
1.7% 0.4
158
77% 75 43
29 79
4.0% 21.8 2.1 39 10.4
na
158 76
55 60
87
77
20.9
40 60
na 6 5 04
106 96
56 64
13.6
3.3
116
30 46
5.5 12.2 4.7 70
24.3 18.3 20.6
67
105 78
31.8
3 4
23.6 na na
na na 154
35
4 1
12.2
28
131
273 30
6 2
106
11.1
na 3 2
14.0
na
33
11.8
26.0 23.5 28.4
20.9% 25.0%
$92 $78
38% 24%
21.6% 18.3%
2.8% 2.9%
69
68 59
50 203 30 41% 39%
e 24% 43
11.4
6.6% 8.0%
16.1 16.7
1 4
127 154
77
51
60 70 48 58 54
126 147
61
116% 113%
60% 60%
61
a Net sales minus cost of sales and cost of goods sold as a percentage of net sales b Net income as a percentage of sales c Net income as a percentage of current assets plus gross plant d Consolidated sales only e Thousands of dollars, f Actual spending on construction of new facilities and purchase of new equipment and land in consolidated businesses g Deficit, na = not available Note: Net income excludes extraordinary or nonrecurring profits and earnings from discontinued operations, where possible
48
C&EN June 11. 1979
INDUSTRY BALANCE SHEET: Chemical firms increase liabilities more rapidly than net worth Industrial chemicals and synthetics 1978 1977 ($ billions)
Assets
% change
I Liabilities and stockholders' equity
1977 1978 ($ billions)
%
change
Current liabilities:
Current assets: $ 0.98 0.90
Cash and time deposits Marketable securities Receivables Inventories Other current assets
$ 0.90
9.51
0.71 8.21
8.18 1.34
7.76 1.16 18.74
9% 28 16 5 15
Accounts payable Short-term loans Income taxes Current portion of long-term debt Other current liabilities Total
20.91
Plant, property, and equipment Less: accumulated depreciation and depletion
53.19 26.11
48.06 23.62
11 11
Net fixed assets
27.08
24.44
11
9.13
7.98
14
$ 3.48 0.92 0.80
0.46 3.25
0.36 2.96
22% 12 38 21 10
8.52
18
13.58
12.32
10
4.18
3.82
9
0.22
0.20
12
$28.07
$24.87
Capital stock and other capita Retained earnings Less: Treasury stock Total
8.93 20.83 0.70 29.06
8.36 18.56
12
0.62 26.30
10
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$57.12
$51.16
Long-term debt Deferred taxes and other noncurrent liabilities Minority interest
Other assets:
TOTAL LIABILITIES
Investments, intangibles etc.
1.03 1.11
10.08
12
Total Fixed assets:
$ 4.24
13%
Stockholders' equity:
$57.12
TOTAL ASSETS
$51.16
12%
Source: Federal Trade Commission
7 12
12%
DEBT RATIOS: Little change in the past three years but higher than earlier 1978
$ Billions
1977
INDUSTRIAL CHEMICALS AND SYNTHETICS $12.3 $13.6 Long-term debt $29.1 $26.3 Stockholders' equity 3 31.9% 31.9% Debt ratio DRUGS $ 2.6 $ 2.9 Long-term debt $10.9 $12.3 Stockholders' equity 19.2% 18.8% Debt ratio 3 TQ CHEMICALS AND ALLIED PRODUC $23.7 $21.1 Long-term debt $61.2 $54.9 Stockholders' equity 3 27.8% 27.9% Debt ratio ALL MANUFACTURING Long-term debt Stockholders' equity Debt ratio 3
1976
1975
1974
1973
1972
1971
1969
1970
1968
$11.8 $25.0 32.0%
$10.2 $22.8 30.8%
$ 7.8 $20.5 27.6%
$ 7.2 $18.7 27.8%
$ 7.6 $18.5 29.2%
$ 7.6 $17.5 30.3%
$ 7.0 $16.2 30.1%
$ 6.4 $15.6 29.2%
$ 6.1 $14.9 29.1%
$ 2.4 $10.3 19.1%
$ 2.3 $ 9.3 19.6%
$ 1.7 $ 8.1 17.6%
$ 1.3 $ 7.5 14.3%
$ 1.4 $ 7.7 15.0%
$ 0.9 $ 6.3 12.5%
$ 1.2 $ 7.1 14.8%
$ 0.9 $ 6.3 11.9%
$ 0.7 $ 5.6 10.9%
$19.4 $50.8 27.6%
$16.8 $45.7 26.9%
$12.8 $40.9 23.8%
$10.7 $36.7 22.6%
$11.5 $36.1 24.2%
$10 7 $32.8 24.6%
$10.0 $30.6 24.6%
$ 9.1 $28.6 24.0%
$ 84 $26.9 23.7%
$145.2 $130.1 $153.6 $181.7 $167.3 $435.5 $408.4 $475.3 $563.2 $511.7 24.2% 25.0% 24.4% 24.4% 24.6%
$ 90.7 $ 79.1 $102.5 $118.3 $111.5 $112.9 $273.2 $297.1 $327.1 $310.8 $353.1 $368.0 23.4% 22.5% 25.4% 24.8% 25.1% 23.5%
a Long-term debt as a percentage of long-term debt plus stockholders equity Note: Because of sampling changes, numbers over the entire range of years are not strictly comparable Source: Federal Trade Commission
CASH FLOW: Smaller share of company funds comes from debt, goes into new plant $ Millions, % of total
1976
SOURCES OF FUNDS Net income Depreciation and depletion
$3085.4
33.6%
Deferred taxes
3197.0 353.4
34.8 3.8
Other internal sources Long-term debt
929.6 1544.5
10.1 16.8
Stock TOTAL
83.8 $9193.7
0.9 100.0%
$1317.1 5080.4 863.1 878.7
14.3% 55.3 9.4 9.5
1054.4 $9193.7
11.5 100.0%
$2754.0 2832.7 356.6 1214.4
30.6% 31.5 4.0 13.5
$2855 3 2420.1 373.9 666.4
32.9% 27.9 4.3 77
$2427.1 2155.2 416.6 591.0
1609.1 229.9 $8996.7
17.9 2.5 100.0%
2219.5 142.9 $8678.1
25.6 1.6 100.0%
2333.3 187.7 $8110.9
$1183.5 5488.0
13.1% 61.0
$1054.9
12.1% 65.7
$ 924.1
520.2 746.5 1058.5 $8996.7
5.8
29.9% 26.6 5.1 73 28.8
$2829.1 1963.8
40.0% 27.8
307.0 489.7
4.3 6.9
1386.6 99.4
19.6
2.3 100.0%
$7075.6
11.4%
$ 898.4
1 4
100.0%
APPLICATION OF FUNDS Dividends Capital expenditures Additions to working capital Reduction of long-term debt Other applications TOTAL
8.3 11.8 100.0%
5701.6 545.3 728.3
6.3
648.0
7.5 100.0%
$8678.1
8 4
5191.8 714.3 742.7 538.0 $8110.9
64.0
4455.3
8.8 92 66
615.0 380.1
100.0%
726.8 $7075.6
12.7% 63.0 6.7 54 10.3 100.0%
Note: Data are totals for 15 major chemical companies: Allied Chemical. American Cyanamid. Celanese. Diamond Shamrock. Dow Chemical. Du Pont. Ethyl Corp . Hercules. Monsanto. Olm. Pennwalt. Rohm & Haas. Stauffer Chemical. Union Carbide, and Williams Cos Source: Company annual reports
June 11. 1979 C&EN
49
INDUSTRY CAPITAL SPENDING: In U.S., outlays for new plant, equipment will be up in 1979 1979 a
1978
1977
1976
1974
1973
$ 8.07 5.10 2 95 2.64 4.51
$7.10 4.87 2.46 2.45 3.46
$6.83 4.18 2.67 2.24 3.36
$6.68 3.75 2.99 2.16 3.27
$6.25 3.26 3.03 2.28 2.95
$5.69 3.25 2.12 2.33 2.58
$4.46 3.11 1.38 1.67 1.86
$3.45 2.55 1.24 1.18 1.38
$3.44 2.69 1.37 1.08 1.25
$3.44 2.84 1.68 1.24 1.65
$3.10 2.59 1.83 1.10 1.58
16.35 1.83 2.90 1.06 77.54
15.50 1.75 2.46 1.04 67.62
13.87 1.45 1.99 0.92 60.16
11.62 1.10 1.72 0.81 52.48
10.51 1.00 1.42 0.66 47.95
8.00 1.47 1.44 0.84 46.01
5.45 1.56 1.49 0.77 38.01
5.25 1.08 1.20 0.73 31.35
5.85 0.84 0.85 0.61 29.99
5.62 0.94 0.99 0.56 31.95
5.63 1.09 1.07 0.63 31.68
$ Billions
Chemicals Food and beverage Iron and steel Nonferrous metals Paper Petroleum Rubber Stone, clay, and glass Textiles All manufacturing
a Estimate. Source: Department of Commerce
Outside U.S., foreign affiliates of U.S. firms also are spending more $ Billions*
1979 b
1978
1977
1976
1975
1974
1973
1972
1971
1970
1969
Chemicals and allied products Food products Metals, primary and fabricated
$2.7 1.1 06
$2.4 1.0 06
$2.4 0.9 0.7
$2.7 0.7 0.7
$2.5 0.7 0.7
$2.1 0.7 07
$1.4 0.6 08
$1.2 0.4 06
$1.2 0.4 0.6
$1.2 0.4 0.7
$1.0 0.4 0.5
1.1 0.3 17.1 10.7
0.9 0.2 14.4 10.0
0.7 0.3 12.7 9.3
0.6 0.3 10.9 7.9
0.7 0.4 11.3 8.9
0.9 0.4 11.6 7.8
0.6 0.3 9 2 64
0.5 03 72 5 2
0.6 0 2 70 50
0.4 0 2 65 4 0
0.3 0 2 5 1 37
Paper and allied products Rubber products All manufacturing Petroleum
a By majority-owned affiliates of U.S. companies b Planned Source: Department of Commerce
Capital spending for pollution control in U.S. rises in 1979 after a dip in 1978 1979 a $ Millions
Chemicals Food and beverage Iron and steel Nonferrous metals Paper Petroleum Rubber Stone, clay, glass All manufacturing
1978
Total
Air
Water
Solid waste
$ 580 193 536 184
$ 232
$ 298 104 166
$ 50 34 26
$ 565 172 441
$ 236
154 347 128 142
49 112
7 42
247 239
189 105
794
526 14 28
85 9
1294
611
1645
358
58 164 3951
40 109 1992
296 1406 56 164 4198
33 131 2195
6
Total
Air
Water
$ 286 175
175 290
Solid waste
Total
Water
Solid waste
$ 249
$ 414
470
171 282
296 182
$ 38 28 5
383 468
262 188
103 256
23
1167
531 31 107 2032
546 12 39
90
47
1993
258
$ 42 22 10
$ 701 176
103
5 31
586 12 47
98 7 7
1652
306
140 53
Air
149 4282
19
4 4
a Planned Source: Department of Commerce
Capital spending, worldwide, by the major U.S. producers of basic chemicals is expected to increase 13% this year, following two years in which such outlays declined slightly. This year's gain in investment for new plant and equipment seems modest, however, compared to the industry's rising business volume. Spending is estimated to remain under 10% of sales for the second year running. During the mid-1970's, the industry was plowing funds into new plant at a rate of 12 to 13% of sales. This year, actually, is much like 1974 in many important ways that 50
C&EN June 11. 1979
affect capital spending; plant capacity is being used at relatively high rates and earnings are up sharply. Industry reaction this year, however, seems quite different. Remembering the years from 1976 through 1978 when they had to work off the excesses of the previous capital spending binge, chemical firms now appear to be allocating their new outlays more carefully. The rise in new plant spending by the big basic chemical firms parallels that expected for the broader chemical and allied products industry. According to a Department of Commerce survey,
the overall industry plans to increase its spending in the U.S. almost $1 billion (14%) to just over $8 billion. Meanwhile, majorityowned foreign affiliates of U.S. chemical companies will up outlays about $300 million (13%) to $2.7 billion, matching the previous peak overseas spending of 1976. The share of capital spending in the U.S. ticketed for pollution control also is slated to rise this year, but just 3%, with water pollution being the major target. This year's spending of $580 million, however, will be well under levels in 1977 and 1976.
SECTION TWO | J | \ A I N C E S
OF THE U.S. CHEMICAL INDUSTRY
CHEMICAL CAPITAL SPENDING: More than half of large companies plan higher outlays in 1979 $ Millions Air Products
1979*
1978
1977
1976
1975
1974
1973
1972
1971
1970
1969
$ 230
$ 200
3> 143
$ 53
$ 162
$ 151
$ 110
$ 67
$ 42
$ 79
$ 51
61
42
35
38
51
57
42
43
73
46
30
Allied Chemical
475
502
465
352
314
306
194
128
132
132
185
American Cyanamid
200
251
235
232
204
139
83
72
Celanese
245
248
243
223
208
220
159
128
Akzona
Diamond Shamrock
1 1 1 169
94
99
135
179
250
287
368
310
170
201
103
61
56
53
35
Dow Chemical
1200
1075
1163
1200
935
890
415
359
365
348
371
Du Pont
1000
714
704
876
1036
1008
781
561
474
499
417
Ethyl Corp.
105
96
89
88
69
75
35
32
24
50
39
FMC
230
192
171
117
183
203
120
118
87
71
79
W. R. Grace
450
275
270
226
306
303
174
135
98
105
131
Hercules
145
116
127
150
151
217
144
80
53
91
64
Monsanto
575
480
607
647
528
313
205
168
205
301
220
Olin
163
163
208
166
99
67
78
76
55
60
76
Pennwalt
68
62
46
40
32
43
25
22
23
33
21
Reichhold Chemicals
22
24
26
22
23
15
28
10
20
23
11
Rohm & Haas
73
66
79
110
106
106
73
62
85
62
43
Stauffer Chemical
188
201
193
199
199
83
45
35
52
47
54
Union Carbide
725
688
805
965
862
517
289
244
335
394
322
39
32
29
27
26
28
28
16
16
13
18
$6444
$5714
$6006
$6150
$5653
$4901
$3088
$2392
$2512
$2608
$2447
Witco Chemical TOTAL ANNUAL CHANGE
3%
-5%
-2%
9%
15%
59%
29%
-5%
-4%
7%
18%
a Planned Note: Figures are for worldwide spending on construction, equipment, and land in consolidated businesses. Where possible, acquisition costs and investments in nonconsolidated businesses are excluded Sources: Company data. C&EN estimates
Chemical capital spending rebounds in 1979, but stays low relative to chemical sales $ Billions
Capital spending as % of sales 14
infl
12
mill
10
1969
70
71
72
73
74
75
76
77
78
79 •
1969
70
71
72
73
74
75
76
77
78
79"
a Planned. Sources: Worldwide data for 20 large U S basic chemical companies. C&EN estimates
June 11. 1979 C&EN
51
SECTION TWO F I N A N C E S
OF THE US. CHEMICAL INDUSTRY
CHEMICAL R&D SPENDING: Large companies continue steady advance of R&D support 1979 a
$ Millions Air Products
$
1970
1975
23
$
23
$
24
$
$
19
16
$
11
$
8
$
$
7
7
$
5
1969 $
5
Akzona
26
23
20
18
17
16
13
11
10
7
7
Allied Chemical
67
58
53
42
35
31
29
29
31
29
30
120
108
96
83
73
64
52
44
43
47
45
93
83
77
70
64
58
49
52
51
55
50
American Cyanamid Celanese Diamond Shamrock D o w Chemical Du Pont Ethyl Corp.b
40
36
29
24
20
14
12
12
11
11
10
265
232
203
188
167
149
118
105
95
92
87
400
377
367
353
336
344
286
265
259
270
276
25
28
25
19
25
22
20
20
18
16
na
FMC
73
66
54
53
45
46
37
31
26
24
22 21
W . R. Grace
45
41
34
30
30
32
28
22
21
21
Hercules
45
40
37
35
30
30
25
24
22
22
23
Monsanto
160
144
132
114
116
87
82
92
87
98
102
Olind
26
25
25
25
24
19
18
16
8
8
7
Pennwalt
26
23
21
19
16
14
13
18
17
18
17
Rohm & Haas
55
49
45
43
45
39
32
25
29
31
29
Stauffer Chemical
39
34
33
29
24
20
17
14
14
14
13
165
156
156
142
120
94
77
70
78
78
76
$1668
$1543
$1434
$1312
$1197
$1093
$918
$857
$829
$848
$836
Union Carbide TOTAL6 ANNUAL CHANGE
10%
8%
9%
10%
10%
19%
7%
3%
-2%
1%
a Planned, b R&D definition narrowed after 1974. c R&D definition narrowed after 1972. d For chemicals only before 1972 e For 17 companies only, na = not available. Sources: Company data. C&EN estimates
Chemical firm's outlays for R&D are rising in pace with inflation...
... but claim a smaller share of the industry's sales dollar
$ Millions*
R&D spending as % of sales b
1700 I
4.01 $ Current
.
A
1500 h
A
L
A
1300
1100
k 900
• PnnttAnt 1 Q A Q # vsoniiani i V D V
•~
—
^^^^ 700 J
1 1969
70
71
72
73
74
75
76
77
78
i
79 c
1969
70
71
72
73
74
75
76
77
78
79 c
aR&D spending by basic chemical companies. bBy basic chemical companies, c Estimate. Sources: Worldwide data from 17 large U.S. basic chemical companies, Battelle Columbus Laboratories, C&EN estimates
52
C&EN June 11, 1979
TOP 50 CHEMICAL PRODUCERS: Nearly half sell $1 billion or more of chemicals
Rank 1978 1977 a
Company
3
1 Du Pont 2 Dow Chemical 3 Monsanto
4
4
Union Carbide
5
5
Exxon
6
7
Celanese
/
6 9
1 2
Chemical sales Change 1978 from ($ millions) 1977 ($
$8080 4982 4320
Chemical Total sales sales as % of 1978 total millions) sales
1 1 % $10,584 14 6,888 10 5,019
76% 72 86
TOTAL COMPANY
Industry classification
Return on Net Profit margin 6 stockholders' equity 0 income Per cent Rank Per cent Rank ($ millions) 1978 1978 1977 1978 1978 1977
Basic chemicals Basic chemicals Basic chemicals Basic chemicals
$
9 7
18 b
16.5% 16.9
6 0 50
15 22
15 20
2763.0
4.6
31
112 170.4
4 3
34
40 74
36 10 37
9 6
22 4
11.7 10.8
31 34
33 34
28
13.7
19
20
42 37
12.0 12.2
10
20
13.3 9.5 12.6
12 31 14
27 39
30 29 22 40 27
4.4 0 1 57
33 49 18
30 43 17
10.2 0.5 12.4
38 48
35 29 27
787.0 575.2
7.4% 8.4
302.6 394.3
4200 d 4034
8
7,870
13
60,335
W. R. Grace Shell Oil
2453 2352 d 1902
13 6 14
4,310 11,063
8 11
Allied Chemical Hercules
1853 1707
5 14
3,268
94 55 17 57
1,946
88
Basic chemicals Basic chemicals
11 12
14
1701 d 1668 d
41 6
18,069 6,253 2,764
9 27
Petroleum Petroleum
791
Basic chemicals Photographic equipment Petroleum
155.9 902.3
12.9
2
3
18.6
28 5
1076.4
72
12
9
15.1
11
9
Basic chemicals
126.0
Dairy products
135.8 82.7
9.5 36
5 38
16.6 12.7
58 46
16 30 4
5 35 14 33 8
10.4 19.5
8 25 16 37 4
5 23 12 43 7
12 4
14.6 14.9
13 12
41 23
12.6 13.4
26 20
13 3 24
8 9 10
13
12
Gulf Oil Occidental Petroleum American Cyanamid
14
13
Eastman Kodak
1433 1343
11 10
15
16
Standard Oil (Ind.)
1307
16 17
15 17
18 19
18
Stauffer Chemical Borden Ethyl Corp.
20
20
Rohm & Haas Phillips Petroleum
1225 1110
21 22
24 23
Atlantic Richfield Diamond Shamrock
1094
23 24
21 27
Mobil
1001 1000
FMC
25
26
Air Products
26 27 28
25 22 30
29 30
28
B. F. Goodrich BASF Wyandotte Tenneco
10
19
29
2,609
Petroleum Basic chemicals Basic chemicals Petroleum
7,013
52 19
12
14,961
9
1300 1254 d
8 8
1,328 3.803
1235 d
11 1 1
1,422 1,254
98 33 87
9
6,998
16
32 17
12,298 1,678
9 60
12 24
34,736
995
2,913
3 34
912
12
1,039
88
Basic chemicals
Ashland Oil
883
7
5,167
PPG Industries Standard Oil of Calif.
882 863
Glass products Petroleum
819*
13
2,794 23,232 2,594 864
17 32 4
862
1 12 10
808 d 782 779
69 10 21
763 754
15 12
11,050 754
721 718
9 21 5
1,100 1,497
65 48
Specialty chemicals Agricultural chemicals
1,560
3 2
28,608 921
46 2 74
Basic chemicals Petroleum
12 36 6
31 32
31
International Minerals 9
33 34
38 36
35
33
Mobay Chemical U.S. Steel Reichhold Chemicals
36 37
37 39
38
32
39 40
Ciba-Geigy
98
Basic chemicals Basic chemicals Petroleum Petroleum Basic chemicals Petroleum Farm and construction machinery
Petroleum
813.6 120.2 103.3
6.7
1125.6 140.9
3 2 48
13 8 39 24
76.2
7.3
1 1
11
15.7
10
10
244.8
4.7 47
38 34
21.3 11.4 13.4 8.3
3 33 19 43
6 41
27
27 28 26 42
3 1
40
32
10.6
35
25
5.3 88 46
19 6 29
19 7
13.2 16.7
36
2.2
45 46
47 45
12.8 4.6 6 2
23 7 24
15 8 39 47
48
13 22
132.1 1105.9 70.1 26.7
Petroleum
466
Agricultural chemicals
779
100 7
120.1 36.2 242.0 12.0
35 34
715 683 680
41 42
40 41
Union Oil of Calif. National Distillers
678 663
21 27
5,811 1,858
43 44 45
48 42 43
Continental Oil Lubrizol NL Industries
602 586 530 d
36 16 8
9,455 586 1,893
46 47
44 47
Akzona Pennwalt
869
48
49 50 46
Nalco Chemical Borg-Warner
9 7 10
49
517 480 476 472
Esmark
471d
12 2
2,326 5,827
921 476
100
100 28 60 52 100 20 8
48
1 6
12.8 62.8
0 9 40
Basic chemicals
852.5 22
3 0 24
Petroleum
382.3
64
14
Alcoholic beverages Petroleum
93.1 451.3 77.4
5 0 48
21
Specialty chemicals Basic chemicals Basic chemicals Basic chemicals Specialty chemicals Automobile equipment Meat products
11
6.5 7.8
9 57
Steel Basic chemicals
45
804.3 131.1
8,762 1,364
Basic chemicals
14.1
32
10.2
Rubber products Basic chemicals
3 7 53
57.8 710.5
33 95
Williams Cos. Olin Texaco American Hoechst
50
53 7
86.3 20.8 45.0 53.7 133.8 80.1
13.2 4.6 2.4 48 11.3 5.8 1 4
26 44
35 41
40 46
44
25 1 32 43 23 3 17 47
1.8 9 1 9 0
46 44
21
19 44
46
47
40
41
26 36
42
14
16 21
14.4 10.5
36
16 30
29 2 31
14.3 23.9 11.5
15 2 32
18 2 38
49 25 1 24
6.8 13.4 24.2 13.8 9.8
45 21 1 17
48 17
48
39
1 28 37
a Revised b Net income as a percentage of net sales c Net income as a percentage of net worth d Chemical sales include significant amounts of nonchemical products, such as fabricated plastics, coatings, metals, minerals, adhesives. and the like e For the year ended Sept 30 I Exiudes sales of $44 million from discontinued soda ash business g For the year ended June 30 h For year ended Oct 28 Note: Industry classifications are based largely, but not entirely, on the federal Enterprise Standard Industrial Classification system
June 11. 1979 C&EN
53
Oividend _ NfcT .NCOMt Dividends, yield. % cf % of $ per $ per % sales net worth share share ot price otherwise indicated
Stock price range. S per share
Priceearnings ratio
$477,557 416.190 353.396 291.365
7.3% 7.1 78 78
16.0% 16.3 180 186
$2.70 2.40 2.30 201
$0.50 0.25" 0.125b 0.10b
1.8% 0.9 04 03
$3178-22'2 35V21 41' 2 -29 5 8 39V223 8
10.1 11.8 155 154
$42,404 35.191 38.126 50.855
$307,790 300.287 306.594 315.443
2.4% 0.9 08 12
6.8% 2.5 18 25
$1.69 0.60 0.45 063c
$0.80 1.10 120 120
6.0% 7.2 61 74
$15V11 1 4 19V11% 25V13 3 8 22 -W2
7.8 25.3 43.5 25.8
$2,041,409 1.809.369 1.454.105 1.274.692
$502,040 464.638 346.776 304.685
$1,226,710 1.151.112 1.057.784 987.678
3.5% 4.7 48 50
9.4% 12.0 119 118
$4.10' 4.93' 4.52' 4.17
$2.00 1.85 180 180
5.5% 4.1 46 52
$4434-2758 5138-3834 4478-3338 42 -27
8.8 9.1 8.7 83
1.8 2.0 2.3 24
$1,212,807 1.081.908 916.708 785.232
$251,034 235.451 231.844 204.187
$1,238,396 1.152.003 1.091.871 1.026.559
5.7% 5.8 65 77
12.6% 12.1 124 144
$3.26 2.92 2.84 3.09
$1.50 1.50 150 1 50
5.4% 5.7 58 58
$3278-22>8 2934-23 2818-2312 3078-2058
85 90 91 83
$604,437 515.830 439.591 290.505
22 23 30 26
$449,707 391.086 288.154 193.294
$ 93.374 124.494 107.056 61.374
$357,478 313.845 268.385 186.264
13.2% 14.4 133 132
15.9% 15.7 136 149
$2.83 2.46 191 166
$0.68 0.40c 0.33 0.24c
2.0% 1.3 10 10
$40V29 3512-2738 40'?-2778 31 -15 7 8
123 12.8 17.9 Hi
$752,089 575.322 515.462 476.216
25 26 26 30
$353,020 273.104 259.707 248.604
$111,902 50.258 44.270 64.846
$303,542 280.932 263.731 239.299
6.5% 6.9 64 34
15.3% 14.2 111 59
$4.59 3.79 2.75 1.32"
$1.05 0.75 0.50 0.46
3.5% 3.5 32 47
$38'2-21"8 2 43V 1 83 ' 2 21 8-9 8 11V77R
6.5 57 56 7.5
$112 000" $2,148,000 1998.000 70.000 1.897.000 69.000 1.894.000 50.000
20 20 18 1.7
$1,148,000 1.119.000 1.071.000 1.060.000
$248,000 243.000 223.000 208.000
$936,000 816.000 783.000 754.000
4.3% 3.0 33 26
12.0% 8.6 88 66
$7.61" 4.70 4.67 3.30
$2.85 2.80 2.80 280
6.9% 6.0 56 76
$47V35 5 8 53 -40 58 - 4 1 3 4 4712-2578
5.4 9.9 107 11.1
$127,177 107.175 93.908 74.546
23 2.7 28 31
$25,110 24.105 17.211 15.347
$4,484 2.976 2.042 1.560
$49,699 45.938 46.077 37.483
2.8% 2.8 31 20
12.3% 11.8 10.2 6.2
$2.65 2.35 2.03 1.06
$0.96 0.90 0 80 0.80
6 l°o 6.0 61 86
$19 -125/8 17V12 3 4 153/4-10V2 1lV7 , /4
6.0 6.4 6.5 88
Diamond Shamrock Corp. 1978 $1,677,602 $131,063 1977 1.530.382 162.123 1976 1.356.552 140.030 1975 1.129.348 114.268
$1,969,509 1.718.768 1.389.506 1.139.346
19 20 19 21
$1,294,970 1.140.768 912.071 713.609
$286,843 367.512 285.457 169.696
$790,555 7.8% 701.179 10.6 580.146 103 492.817 101
16.6% 23.1 24 1 23.2
$3.26 4.28 3.90 341
$1.42 1.175 0.95 0.80
5.8% 3.6 29 40
$29V19 3858-2638 40 -26' 2 29 -107/8
7.5 7.6 85 58
Dow Chemical Co. 1978 $6,887,623 1977 6.234.255 1976 5.652.070 1975 4.888.114
$8,705,081 7.591.752 6.765.075 5.759.721
1.6 15 14 15
$4,762,129 4.199.539 3.553.920 2.787.062
$1,075,173 1.163.016 1.186.193 921.471
$3,310,655 3.033.636 2.781.421 2.364.300
8.4% 8.9 108 129
17.4% 18.3 22.0 26 7
$3.16 3.01 3.30 341
$1.25 1.10 0.90 0.725
4.7% 3.2 19 1 9
$307/8-22 4334-2514 57V4-3838 473'4-2778
8.4 11.5 145 10.9
E. 1. du Pont de Nemours & Co. 1978 $10,584,200 $787,000 $8,047,700 7.379.500 1977 9.434.800 545.100 459.300 6.965.800 1976 8.361.000 1975 7.221.500 271.800 6.359.100
23 25 24 19
$3,839,000 3.886.200 3.844.700 3.591.500
$ 714.200 703.600 876.200 1.035.800
$4,737,800 4.265.900 3.977.900 3.769.000
7.4% 5.8 55 38
16.6% $16.17 12.5 11.06 115 9.30 7.2 5.43
$7.25 5.75 5.25 4.25
6.1% 4.8 38 38
$138V975/8 135 -105% 161VH7 1 .! 133V87 , 8
7.3 10.9 15.0 20.3
Ethyl Corp. 1978 $1,422,451 1977 1.282.087 1976 1.154.210 1975 1.029.220
$82,698 $1,001,584 911.072 78.024 69.080' 857.217 61.004 809.491
29 35 34 34
$446,346 402.335 365.166 405.460
$95,803 87.649 87.656 69.470
$514,693 463.070 411.161 369.663
5.8% 6.1 60 59
16.1% 16.8 168 165
$4.24 4.29 359' 3.04
$1.10 0.875 0.75 0.65
5.1% 4.2 38 43
$247/8-18'/2 22 V 1 8 3 8 24*8-1434 1834-1112
5.1 4.8 5.5 5.0
Ferro Corp. 1978 $494,414 1977 420.042 1976 376.485 1975 323.730
$27,657 20.903 20.054 15.186
$310,612 254.254 246.301 211.356
20 24 2.1 24
$86,805 71.902 68.150 63.711
$19,385 19.693 10.442 13.274
$175,618 157.975 143.960 125.345
5.6% 5.0 53 47
15.7% 13.2 139 121
$3.67 2.78 2.68 211
$1.05 0.90 0.76 0 67
4.0% 4.5 39 44
$35 -175*
22 V 1 7 3 8 24 -14% 1978-1018
7.1 7.2 7.2 7.1
$205,837 210.679 169.164 199.872
29 28 2.6 1.9
$72,190 76.476 64.243 59.495
$12,558 25.112 25.887 16.704
$93,528 2.7% 91.986 8.9 79.819 87 73.437 21.0
4.5% 15.7 162 56.9
$0.49 1.72k 152 5.00
$0.39 0.36 0.36 0 24
3.2% 2.8 30 16
$16V8 17 -85/b 15V8V? 19V10'2
25.0 7.4 7.8 3.0
Current ratio
$1,180,754 1.022.546 891.881 766.427
12 1.5 14 13
$801,809 691.904 934.253 506.376
$199,847 142.616 160.433 149.226
$704,095 674.937 675.134 656.177
25 26 26 2.8
$374,065 374.315 382.085 379.746
Allied Chemical Corp. 1978 $3,267,956 $115,921' $3,182,335 1977 2.922.751 138.378' 2.825.965 1976 2.629.567 126.305' 2.382.823 2.178.732 116.194 1975 2.333.111
14 17 2.0 21
American Cyanamid Co. 1978 $2,745,745 $155,943 1977 2.412.311 139.400 1976 2.093.815 135.766 1975 1.928.444 147.675
$2,510,038 2.205.363 1.985.125 1.704.457
Y.ar
Net income
Net plant and Capital Net equipment expenditures worth Money figures m thousands ol dollars unless
Total assets
Net
CHEMICALS Air Products & Chemicals $76,184 1978' $1,039,052 67.707 1977' 947.239 63.479 1976* 818.213 1975699.012 54.244 Akzona 1978 1977 1976 1975
Big Three 1978 1977 1976 1975
$868,711 808.847 728.571 681.724
$20,832 7.523 5.622 7.867
