Marie Emmermann/Skizzomat

SPECIAL REPORT TOP 100 ANALYSIS

ICIS Top 100 R

regions

WILL BEACHAM LONDON

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

ICB_150914_027.indd 27

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
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.

15-21 September 2014 | ICIS Chemical Business | 27

2014-09-12 10:54

SPECIAL REPORT TOP 100 ANALYSIS

NORTH AMERICA JOSEPH CHANG NEW YORK

NORTH AMERICA TOP 10 LIFTED BY ECONOMY, 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.
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 AkzoNobels North American
architectural coatings business but
also saw higher organic sales
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
Technologies for $2.3bn in April

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,
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.

Companies such
as PPG Industries,
Sherwin-Williams
and Ecolab are still
seeking growth
through M&A, boding
well for future moves
up the rankings

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

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 significantly in the years to come.

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 projects, primarily on the US Gulf
Coast to take advantage of shale
gas economics. That will add to

NORTH AMERICA TOP 10 LEADERS, $M

Rank

Company

1 ExxonMobil

Sales

Operating profit

Net profit

2013

% change
(reporting currency)

2013

2012

2013

2012

59,273

-2.6

5,180

4,885

3,828

3,898

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
1,498

4 Agrium

15,727

-1.9

1,630

2,216

1,063

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

10,847

-1.1

510

845

128

363

10,186

6.8

1,086

907

753

631

9 Huntsman
10 Sherwin-Williams

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

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11/09/2014 17:54

SPECIAL REPORT TOP 100 ANALYSIS

EUROPE WILL BEACHAM LONDON

COMMODITY 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
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, 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, though this
was a slight improvement on the
previous years 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 2012s
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
from joint venture partner BASF for
1.1bn. The deal which is ex-

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

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

(Belgium), Mazingarbe (France),

Beek (The Netherlands),
Wilhelmshaven (Germany) and
Runcorn (UK).
These moves are signs of the
European chemical sectors 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 naphthabased feedstocks.
Just in the last few weeks other

EUROPE TOP 10 LEADERS, $M

Sales

Operating profit and EBIT

Net profit

2013

% change
(reporting currency)

2013

2012

2013

2012

101,906

2.6

10,019

8,889

6670

6354

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

20,974

-0.7

3,591

3,330

2347

2185

9 AkzoNobel

20,099

-5.2

1,320

1,197

911

676

18,598

4.0

747

581

565

412

Rank Company

1 BASF

10 Johnson Matthey

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

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SPECIAL REPORT ICIS TOP 100 ANALYSIS

ASIA MALINI HARIHARAN MUMBAI

ASIAN TOP 10 CHEMICAL COMPANIES OVERCOME CHALLENGING YEAR

ASIAN CHEMICAL companies managed to hold their positions in the
ICIS global top 10, with a few exceptions, despite facing a difficult year.
With sales of $72.2bn, Sinopec,
Chinas state-owned refining and
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
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 depreciation of the yen.

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
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 oversupply. Mitsui has embarked on an

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
tonnes/year of BPA production in
Singapore.
It also plans to close a 250,000
tonnes/year phenol plant and a
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 resulted in a 2%
drop in sales in 2013.
PTTGCs 300,000 tonne/year
LDPE plant in Map Ta Phut was shut
for more than three months to address a technical problem at the

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.
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%
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,
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
uncertain Chinese economy.

ASIA TOP 10 LEADERS, $M

Sales

Operating profit

Net profit

Rank Company

2013

% change
(reporting currency)

2013

2012

2013

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

14,331

9.4

635

109

832

252

10 Formosa Chemicals & Fibre (Taiwan)

2012

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

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11/09/2014 18:05

SPECIAL REPORT ICIS TOP 100 CHEMICAL COMPANIES

MIDDLE EAST AND AFRICA JOHN BAKER LONDON

THREE IRAN COMPANIES MAKE TOP 10 LISTING DEBUT

SAUDI ARABIAS SABIC continues
to be by far the largest chemical
player in the Middle East and Africa
region, with sales nearly five times
that of nearest challenger, South
Africas Sasol.
SABICs 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.
SABICs 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.
It has, it added, beaten the market
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, with sales
volumes starting to stabilise and
even pick up. We believe the sector 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
Irans 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 Petrochemical
Industry, Parsian Oil & Gas
Development and TAPPICO, in third,
fifth and seventh place, pushing out
Kuwaits PIC and South Africas
AECI from the bottom of the table.
Abbas Shari Moghadam, Irans

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
Agricultural Solutions, had diverse
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
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 environment.
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, 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

Sales
Rank Company

2013

Operating profit and EBIT

% change
(reporting currency)

Net profit

2013

2012

2013

2012

11,355

10,938

6,740

6,606

1 SABIC

50,403

0.0

2 Sasol*

10,658

11

194

795

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
8 Makhteshim-Agan Industries

3,796
3,076

8.5

1,703
309

1,180
282

1,668
127

1,018
123

3,066

6.7

2,062

-18

3 Persian Gulf Petrochemical Industry

9 Industries Qatar
10 Petro Rabigh

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

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SPECIAL REPORT ICIS TOP 100 ANALYSIS

LATIN AMERICA JOSEPH CHANG NEW YORK

LATIN AMERICA CHEMICAL LEADERS POISED FOR 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 rankings is polyvinyl chloride (PVC) producer Mexichem, which continues
to build its empire through mergers
and acquisitions (M&A).
The #3 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 PolyOnes vinyl assets
for $250m, adding $147m in annual sales, along with its June
2012 buyout of Netherlandsbased polymer pipe manufacturer
Wavin for 531m.

tween Braskem and Mexicos

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,
along with derivative PE plants with
equivalent capacity.

Mexicos energy
reform allows for
private and foreign
investment in the
energy, refining and
petrochemical
sectors

In the years ahead,

Braskems sales
should increase on
the construction of
its Ethylene XXI
project in Mexico
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.
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.

If the two deals go through,

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

1.7% to $17.3bn on the severe

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

Mexichem is also working on two

major projects. The first involves
upgrading the vinyl chloride monomer (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, 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 Mexichems
PVC plants in Mexico.
Mexicos energy reform signed
into law in August 2014 allowing for
private and foreign investment in
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.

LATIN AMERICA TOP 5 LEADERS, $M

Sales

Operating profit

Net profit

Rank Company

2013

% Change
(reporting currency)

2013

2012

2013

2012

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

4 Pemex

3,081

14.0

-1,164

-806

-1,140

-869

5 SQM

2,203

-9.3

652

901

475

657

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

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