Thel Top Ten Chemical Companies 2014

 

SPECIAL REPORT TOP 100 ANAL ANALYSIS YSIS

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ICIS Top ICIS Top 100 regions Economic challenges continued to impact chemical companies in all regions in 2013. This year, the US shale gas boom takes centre stage as construction gets started www.icis.com

WILL BEACHAM LONDON

egional leaders faced tough trading conditions in 2013 as the global economy continued to sputter. Stronger economic performance in the US was offset by contraction in Europe and slower growth in Asia. Since then, European chemical companies have become sharply focused on improving

R

their competitive position, especially in commodities where consolidation is ongoing. Meanwhile, the US race for shale gas continues, with a building programme that will see new capacity on stream in 2017-2018. ■

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SPECIAL REPORT TOP 100 ANAL ANALYSIS YSIS

NORTH AMERICA JOSEPH CHANG NEW YORK 

NORTH AMERICA AMERICA TOP 10 LIFTED LIFTED BY ECONOMY ECONO MY,, SHALE GAS, M&A 2013 WAS a solid year for both sales and profit gains for the top 10 chemical companies based in North America as the US economy continued its recovery, although at a slow and steady pace.

revenues, but mostly starting in 2017-2018. Also on the growth side, companies such as PPG Industries, Sherwin-Williams and Ecolab are still seeking growth through M&A,

Producers with petrochemical assets in the US also benefited from the shale gas boom as natural gas liquids (NGL) feedstock costs remained low. On the top line, PPG Industries and Ecolab showed notable revenue gains of nearly 12% each, aided by mergers and acquisitions (M&A). The bottom line was even better as earnings surged 38% for both PPG and Ecolab. Coatings giant PPG Industries received a boost from the acquisition of AkzoNobel’s North American architectural coatings business but also saw higher organic sales

boding well for future moves up the rankings. Huntsman will get a big boost if it is able to complete its planned $1.1bn acquisition of Rockwood Holdings’ titanium dioxide (TiO2) and performance additives business. The acquisition has been awaiting European Commission approval.

growth in 2013, propelling it from the #6 slot in 2012, to #5 for 2013 with $15.1bn in sales. Expect even higher sales and earnings growth from PPG in 2014 and beyond. In June 2014, it agreed to buy Mexicobased coatings company Comex for $2.3bn. Comex has annual sales of around $1bn. Ecolab, which specialises in institutional cleaning, water treatment and oilfield chemicals, booked $13.3bn in sales in 2013, also moving up a notch to the #6 position on the leaderboard. Ecolab acquired US-based oilfield chemicals company Champion

through M&A, boding  well for future moves up the rankings

Technologies for $2.3bn in April

Companies such as PPG Industries, Sherwin-Williams and Ecolab are still seeking growth

2013, tacking on around $1.3bn in annual sales. Coatings company SherwinWilliams made its way into the Top 10 with a 6.8% sales gain to $10.2bn for 2013, also aided by acquisitions, while earnings rose by 19%. Looking ahead, there are two

diverging trends. On the growth side, three of the top 10 – ExxonMobil Chemical, Dow Chemical and Chevron Phillips Chemical and are building major petrochemical and derivatives pro jects,  ject s, pri primari marily ly on the US Gulf Coast to take advantage of shale

On the other side of the equation, companies such as DuPont and Dow Chemical are seeking to trim their portfolios – Dow through sales of non-core assets and the separation of its chlorine and derivatives business, and DuPont through the separation of its performance chemicals segment, which consists mostly of TiO2. These moves could impact sales signifi-

gas economics. That will add to

cantly in the years to come. ■

NORTH AMERICA TOP 10 LEADERS, $M Rank

Company

Sales

Operating profit

Net profit

2013

% change (repor ting currency)

2013

2012

2013

2012

3,898

1

ExxonMobil

59,273

-2.6

5,180

4,885

3,828

2

Dow Chemical

57,080

0.5

6,804

1,665

4,447

842

3

DuPont

35,734

2.6

3,489

3,088

4,862

2,780

4

Agrium

15,727

-1.9

1,630

2,216

1,063

1,498

5

PPG Industries

15,108

11.8

1,489

1,057

1,156

836

6

Ecolab

13,253

11.9

1,561

1,289

968

704

7

Chevron Phillips Chemical

13,147

-0.7

-

-

2,743

2,403

8

Praxair

11,925

6.2

2,625

2,437

1,755

1,692

9

Huntsman

10,847

-1.1

510

845

128

363

Sherwin-Williams

10,186

6.8

1,086

907

753

631

10

NOTE: Please refer to main Top 100 listing (publ ished 8 September) for footnotes.

28 | ICIS Chemical Business | 15-21 September 2014

 

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SPECIAL REPORT TOP 100 ANAL ANALYSIS YSIS

EUROPE WILL BEACHAM LONDON

  COMMODITY CONSOLIDATION CONSOLIDATION BECOMES A KEY THEME FOR EUROPE THE TOP 10 European leaders table is only slightly reshuffled from the previous year. Unsurprisingly BASF retains its top position with more than double the sales of its nearest rival, LyondellBasell, which

companies have joined INEOS in seeking to import US ethane as a way of grabbing some of the US advantage. INEOS – as ever the trailblazer – was first to announce the construction of ethane import

swapped places with Shell to reach second place. Bayer swapped with INEOS to reach fourth place. The year 2013 was a tough one for the global economy economy,, which grew at only 2.3% compared with 2.5% the previous year while Europe continued to be plagued by GDP contraction in many countries. The EU region only achieved 0.1% growth during the year year,, though this was a slight improvement on the previous year’s contraction of 0.3%. This impacted chemical companies headquartered in Europe, many of which suffered declines in sales revenues. However the slight improvement in demand in Europe did allow all the companies in the top 10 to report improved operating earnings and net profits compared to 2012’s 2012’s depressed levels. During 2014 several of the top players have become very focussed on major strategic moves to either exit or beef up and improve the competitive position in some of their commodities. In June INEOS announced it is to acquire an additional 50% stake in styrenics producer Styrolution

pected to close in the fourth quarter of 2014 – will give INEOS full control of this global styrenics leader. For For BASF this is another ano ther step away from commodities as it tries to focus on value-added advanced materials. INEOS also signed a deal with Belgium’s Belgium’ s Solvay to put their European chlor vinyls activities into a JV – to be known as INOVYN. INOVYN. The deal was given clearance by the European Commission in May 2014 though the remedy package

(Belgium), Mazingarbe (France), Beek (The Netherlands), Wilhelmshaven (Germany) and Runcorn (UK). These moves are signs of the European chemical sector’ sector’s s increasing preoccupation with the threat to its competitive position posed by the US shale gas revolution. This has cut energy and feedstock prices hugely in the US whilst Europeans struggle with high energy costs and taxation as well as a reliance on naphtha-

terminals at Rafnes in Norway and Grangemouth in Scotland. These facilities are now approved and under construction. Next Borealis – the other company with European gas crackers – announced a similar construction project plus a cracker upgrade scheme for its Stenungsund, Norway, facility. In August SABIC revealed plans to modify its cracker in Teesside in the UK so it can use ethane. The company plans to complete the project in 2016. India’s Reliance also announced a scheme to import 1.5m tonnes/year of US ethane for ethylene cracking in India. Dutch-headquartered LyondellBasell is grabbing the US shale advantage too. In August it announced plans to develop a world-scale propylene oxide (PO) and tertiary butyl alcohol (TBA) plant on the US Gulf coast. Slated to be operation by 2019, the unit will have an estimated capacity of over 400,000 tonnes/year of PO and over 900,000 tonnes/year of TBA and its derivatives. This is on top of three US ethylene expansions it has announced which

from jointThe venture BASF €1.1bn. deal –partner which is ex- for

has yetassets to be divested. INEOS has to sell in Tessenderlo

based Justfeedstocks. in the last few weeks other

will add over 800,000 of production capacity.tonnes/year  ■

EUROPE TOP 10 LEADERS, $M   Sales Rank Company

Operating profit and EBIT

Net profit

2013

% change (repor ting currency)

2013

2012

2013

2012

101,906

2.6

10,019

8,889

6670

6354

1

BASF

2

LyondellBasell Industries

44,062

-2.8

5,102

4,676

3857

2848

3

Shell

42,279

-7.6

-

-

1843

1374

4

Bayer

29,251

0.5

2,306

2,272

-

-

5

INEOS

27,864

-10.8

-

-

-

-

6

Total

25,743

1.4

-

-

-

-

7

Linde Group

22,944

5.2

2,991

2,709

1814

1624

8

Air Liquide AkzoNobel

20,974 20,099

-0.7 -5.2

3,591 1,320

3,330 1,197

2347 911

2185 676

Johnson Matthey

18,598

4.0

747

581

565

412

9 10

NOTE: Please refer to main Top 100 listing (published 8 September) for footnotes

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SPECIAL REPORT ICIS TOP 100 ANALYSIS ANALYSIS

ASIA MALINI HARIHARAN MUMBAI

ASIAN TOP 10 CHEMICAL COMPANIES COMPANIES OVERCOME CHALLENGING CHALLE NGING YEAR ASIAN CHEMICAL companies managed to hold their positions in the ICIS global top 10, with a few exceptions, despite facing a difficult year. year. With sales of $72.2bn, Sinopec, China’s state-owned refining and

unit. Meanwhile, an outage at the gas separation plant (GSP) No 5 of PTT, the parent firm of PTTGC, because of a lightning strike in August, prompted PTTGC to run some of its plants at reduced capacity. capacity.

petrochemicals major, held on to the #2 position on the global list. But the major faced difficult conditions in its home market with intense competition from low-cost imports and entry of new local competitors. Operating profit for the chemicals segment declined to yuan (CNY) 868m from CNY1,172m in 2012. To overcome this threat Sinopec has focused on optimising its feedstock and product mix to increase the share of value-added products. Ethylene production increased 5.58% to 9.98m tonnes last year while synthetic resins output was

But Mitsubishi continues to restructure its chemicals business. It is currently implementing an agreement signed with Asahi Kasei to unify cracker operations at the Mizushima site in Japan in order to

aggressive restructuring programme for these businesses that includes closure of a 90,000 tonnes/year bisphenol-A (BPA) plant in Chiba, Japan, in March 2014 and suspension of 70,000

In addition, 2013 was also the first full year that a new price formula for feedstock gas to its olefins and derivative business was applied. According to the company, the new formula aims at providing a fairer profit sharing between PTTGC and its parent. Indian refining and petrochemical major Reliance Industries climbed to #23 on the global list thanks to 10.5% growth in sales during 2013-14. Surging export sales, a strong performance in refining and higher petrochemicals margins also drove up profits. Petrochemicals sales rose 9.5%

up 2.87% at 13.726m tonnes. For 2014, the company aims to produce 10.58m tonnes of ethylene. It also expects to complete a coal-tochemicals project at Ningdong. Mitsubishi, the second-largest chemicals company in Asia, saw strong sales growth in the petrochemicals and chemicals derivative segment in fiscal 2013-14 with the company managing to push through price hikes. Even in the purified terephthalic acid (PTA) business where the Asian market is reeling under overcapacity, Mitsubishi was able to boost numbers due to strong sales in India and deprecia-

optimize product configuration, increase efficiency, strengthen competitiveness and boost profitability. Other Japanese chemical companies too enjoyed healthy growth in sales and profits last year. Sumitomo Chemical, ranked at #4 on the Asia list, posted 15% growth in sales supported by higher product prices and depreciation of the yen. Mitsui Chemicals posted 11.4% growth in sales in 2013-14 despite volatile market conditions in phenol, PTA and toluene diisocynate (TDI) businesses which were hit by weak demand in China and over-

tonnes/year of BPA production in Singapore. It also plans to close a 250,000 tonnes/yearr phenol plant and a tonnes/yea 60,000 tonnes/year linear low density polyethylene (LLDPE) unit, both at Chiba, in September and December respectively. Among the other Asian chemical companies, Thai major PTT Global Chemicals (PTTGC) faced many internal and external challenges last year, which which resulted in i n a 2% drop in sales in 2013. PTTGC’s PTTGC’ s 300,000 tonne/year LDPE plant in Map Ta Phut was shut for more than three months to ad-

year over year to $16.1bn, with growth led by an 8.6% increase in prices while volumes grew 0.9%. Earnings in the petrochemicals business was supported by strong margins in polymers and polyester polyester,, which partly offset the weak margin seen in fibre intermediates such as PTA. Most Asian chemical companies saw an improvement in their business environment in 2013 and expect this to continue in 2014. While signs of improvement in margins and profitability are evident, the risks cannot be ignored. These include high feedstock costs and an

tion of the yen.

supply. Mitsui has embarked on an

dress a technical problem at the

uncertain Chinese economy. ■

ASIA TOP 10 LEADERS, $M  

Sales

Operating profit

Net profit

Rank Company

2013

% change (reporting currency)

1

Sinopec

72,281

6.2

143

189

-

-

2

Mitsubishi Chemical

33,961

13.3

1,072

958

313

197

3

LG Chem

21,920

-0.5

1,651

1,793

1,203

1,414

4

Sumitomo Chemical

21,779

14.9

980

478

359

-542

5

Toray

17,838

15.4

1,022

886

579

515

6

PTT Global Chemical Public Co. Ltd.

16,787

-2.4

1,064

1,172

1,017

1,111

7

Reliance Industries

16,074

10.5

1,399

1,319

-

-

8

Lotte Chemical Corp

15,570

3.4

462

349

271

297

9

Mitsui Chemicals

15,200

11.4

242

46

-244

-86

Formosa Chemicals & Fibre (Taiwan)

14,331

9.4

635

109

832

252

10

 2013

2012

2013

2012

NOTE: Please refer to main Top 100 listing (published 8 September) for footnotes

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SPECIAL REPORT ICIS TOP 100 CHEMICAL COMPANIES

MIDDLE EAST AND AFRICA JOHN BAKER  BAKER  LONDON

THREE IRAN COMPANIES COMPANIES MAKE TOP 10 LISTING DEBUT SAUDI ARABIA’S SABIC continues to be by far the largest chemical player in the Middle East and Africa region, with with sales nearly five times that of nearest challenger, South Africa’s Sasol.

development tasks, he added. The firm is to provide the required infrastructure and incentives for investment in petrochemicals. In Israel, ICL and MakhteshimAgan, now known as Adama

SABIC’s turnover for 2013 of Saudi riyal (SR) 189bn ($50.4bn) was, however flat, showing no change on the 2012 figure due to the challenging market conditions especially in developed economies. Nevertheless, it retained its overall global position of fifth place, after BASF, Sinopec, ExxonMobil Chemical and Dow Chemical. SABIC’s earnings improved slightly in 2013, with net income advancing 2% to SR25.3bn. SABIC described the year as one of “solid performance... despite continued challenges in the global economy e conomy.” .” It has, it added, “beaten the market

Agricultural Solutions, had diverse Agricultural fortunes, with ICL seeing sales down 3.1% in local currency terms to $6.3bn, and Adama enjoying an increase of 8.5%, to $3.1bn. Adama reported a year of solid growth in sales and earnings despite an unfavourable currency environment especially in its Asia-Pacific region and Brazil. It achieved growth across all regions; higher sales volumes and an improved product mix that led to improvement in financial performance. The results in Latin America benefited from positive market conditions in the region. At ICL, lower selling prices were

average on improved efficiency and strong performance in key sectors.” Looking forward, vice chairman and CEO Mohamed Al-Mady noted that: “The global chemical sector has turned the corner cor ner,, with sales volumes starting to stabilise and even pick up. We believe the secs ector will see better growth, with demand outpacing capacity for the next three years or so.” Fellow Saudi Arabian producer Tasnee, in sixth spot with sales of $4.9bn, also struggled to grow revenue, with sales up just 1.6% in local currency terms. The big change in the Middle

East and Africa ranking this year has been the disappearance of Iran’s state-owned NPC. With sales of $9bn in 2012 this ranked third last year in the regional table and 50th in global terms. Privatisation of the oil and chemicals sector in the country has created three new players that rank in the table this year: Persian Gulf Petroche Petrochemical mical Industry, Parsian Oil & Gas Development and TAPPICO, in third, fifth and seventh place, pushing out Kuwait’s Kuwait’ s PIC and South So uth Africa’s AECI from the bottom of the table. Abbas Sha’ri Moghadam, Iran’s

noted as primarily being behind the sales slide. The company is looking to save several hundred million dollars by 2016. The initiative is critical, it says, “under the current climate of weak markets, increased competition in the markets and an unstable business environmen environment”. t”. In South Africa, Sasol saw sales rise 11% in 2013, but earnings were down substantially due in large part to issues in the polymers business. The company has now withdrawn fully from its joint venture operations in Iran, Arya Sasol Polymer Polymer,, which resulted in an impairment charge against operating profit of rand 3.6bn ($340m). ■

deputy petroleum minister and president of NPC, said at the recent 11th International Iran Petrochemical Forum in Tehran that NPC, which operates under Iranian Petroleum Ministry, has undergone a vast transformation. As a holding company, it used to have more than 50 production and service companies, but it has now privatised most of these. The only state-run units at NPC are now R&D, the Mahshahr Special Economic Zone and the $4bn Damavand petrochemical project. NPC will continue to functioning as a company with governance and

MIDDLE EAST AND AFRICA TOP 10 LEADERS, $M   Rank Company

2013

Sales

Operating profit and EBIT

% change (repor ting currency)

Net profit

2013

2012

2013

2012

1

SABIC

50,403

0.0

11,355

10,938

6,740

6,606

2

Sasol*

10,658

11

194

795

-

-

3

Persian Gulf Petrochemical Industry

8,117

-

1,442

735

722

225

4

ICL

6,272

-3.1

1,101

1,554

820

1,302

5

Parsian Oil & Gas Development

5,098

-

1,812

1,844

1,737

1,586

6

Tasnee

4,853

1.6

823

1,098

314

470

7

TAPPICO

3,796

-

1,703

1,180

1,668

1,018

8

Makhteshim-Agan Industries

3,076

8.5

309

282

127

123

9

Industries Qatar

3,066

6.7

-

-

-

-

Petro Rabigh

2,062

-18

-

-

-

-

10

* Financial year ended 30 June 2013. NOTE: Please refer to main Top 100 listing (published 8 September) for footnotes

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 15-21 September 2014 | ICIS Chemical Business | 3  31 1

SPECIAL REPORT ICIS TOP 100 100 ANALYSIS ANALYSIS

LATIN AMERICA JOSEPH CHANG NEW YORK 

LATIN LA TIN AMERICA CHEMICAL LEADERS POISED FOR CHANGES CHANGES THERE WAS no change among the Latin America-based chemical leaders in 2013, as the top five companies maintained their positions. However,, climbing fast in the rankHowever ra nkings is polyvinyl chloride (PVC) pro-

tween Braskem and Mexico’ Me xico’s s Grupo Idesa. The Ethylene XXI project, slated to start up by July 2015, will consist of an ethane cracker with 1.05m tonnes/year of ethylene capacity,

ducer Mexichem, which continues to build its empire through mergers and acquisitions (M&A). The #3 player player,, Mexichem, which reports its financials in US dollars, saw 2013 sales gain 8.6% to $5.2bn. The top line benefited from its May 2013 acquisition of US-based PolyOne’s vinyl assets for $250m, adding $147m in annual sales, along with its June 2012 buyout of Netherlandsbased polymer pipe manufacturer Wavin for €531m.

along with derivative PE plants with equivalent capacity.

Mexico’s energy reform allows for private and foreign investment inv estment in the energy, refining and petrochemical sectors Mexichem is also working on two major projects. The first involves upgrading the vinyl chloride mono-

In the years ahead,

Mexichem is poised to advance further with two major deals signed in August. The company is buying US-based polyethylene (PE) pipe and conduit producer DuraLine for $630m, adding around $650m in annual sales in a deal expected to close in the third quarter of 2014.

If the two deals go through,

1.7% to $17.3bn on the severe

mer (VCM) plant at its majority owned joint venture with Pemex in stages ending in 2015. The other is a 50:50 joint venture cracker in Ingleside, Inglesid e, Texas, Texas, US with partner Occidental Chemical. That project, scheduled to be completed in the first quarter of 2017, will add 544,000 tonnes/year of ethylene capacity, which will ultimately be used to produce VCM at an existing facility on site. The VCM would be shipped to Mexichem’s PVC plants in Mexico. Mexico’s energy reform signed into law in August 2014 allowing for private and foreign investment in

Mexichem also plans to acquire Germany-based specialty PVC producer Vestolit in a €219m deal. That deal, which would add sales of around €477m, is expected to close in the fourth quarter of 2014.

Mexichem could boost annual sales by over $1.2bn in 2015. Brazil’s Braskem, the leading Latin America player, saw sales in local currency rise 13.3%. Yet in US dollar terms, sales actually fell

decline in the Brazilian real. In the years ahead, Braskem’s sales should increase on the construction of its Ethylene XXI project in Mexico being built by Braskem Idesa – a 75:25 joint venture be-

the energy, refining and petrochemical sectors also bodes well for growth. State-owned energy company Pemex could see its petrochemical sales rise significantly in the years ahead. ■

Braskem’s saleson should increase the construction of  its Ethylene XXI project in Mexico

LATIN AMERICA TOP 5 LEADERS, $M  

Sales

Operating profit

Net profit

Rank Company

2013

% Change (repor ting currency)

1

Braskem

17,345

13.3

1,160

777

215

-360

2

Alpek

6,875

-6.3

223

577

69

338

3

Mexichem

5,177

8.6

562

642

83

962

Pemex SQM

3,081 2,203

14.0 -9.3

-1,164 652

-806 901

-1,140 475

-869 657

2013

2012

2013

2012

4 5

NOTE: Please refer to main Top 100 listing (published 8 September) for footnotes

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