For the eighth year in a row, BASF has taken the front of the IHS ChemicalWeek ‘Billion Dollar Club’ annual sales ranking of global chemical companies by registering 2013 sales of US$ 81.5 billion. Sinopec took the second spot and Sabic the third, which IHS has commented indicates a major leadership change in the global chemical industry which was once dominated by the USA, European and Japanese firms. BASF is a German company while Sabic is based in Saudi Arabia and Sinopec in China. Sinopec reported 2013 sales of US$ 72.3 billion and Sabic of US$ 60.7 billion. Following these three were ExxonMobil at US$ 59.3 billion and Dow Chemical with US$ 57.1 billion in sales for 2013.
Rob Westervelt, Editor, IHS ChemicalWeek said, ‘the presence of both Sinopec and Sabic in the top three companies on our sale ranking, which puts them ahead of powerhouse US companies ExxonMobil Chemical and Dow Chemical, respectively, is profound when you realise that just 10 years ago, neither of these companies were in the top 10. In 2000, both Sinopec and Sabic each had roughly US$ 7 billion in chemical revenue and have scaled that by approximately 10 fold in less than 15 years. Their rapid ascension to the top of the of the list is a sign that these are no longer emerging companies, but industry leaders who will continue to reshape industry as they further expand on their competitive advantages enabled by scale, feedstock or market positions.’
Westervelt continued, ‘we published our first ranking in 1995, based on 1994 revenues, and of the companies who made the top 10 list, only five of the original companies remain there: BASF, Bayer, Dow, DuPont and Shell. Of those, DuPont and Bayer, numbers 2 and 4, respectively in our first ranking, are likely to drop out of the top 10 this year or next, since both are preparing to divest significant chemical operations.’
With reference to Sinopec and Sabic, Westervelt has said that it is not unreasonable to think the following, ‘within the next few years, either of these two companies could overtake BASF as the top earner for chemical sales on the IHS ChemicalWeek list because Sabic has the feedstock advantages, and Sinopec has the market advantages that make them formidable competitors.’
Back in 1995, US, European and Japanese firms were in possession of 24 of the 25 slots available on the list. Formosa, a Taiwan based company was the only exception in at 24. This year’s top 25 has 8 firms from outside the US, Europe and Japan including,
- LG Chem – Korea.
- IPIC – UAE.
- Braskem – Brazil.
- PTT Global – Thailand.
- Reliance – India.
Overall sales in the chemical sector were higher in 2013, with a median rise of 6% above 2012 figures, according to IHS. Out of the top five companies on the list, Sinapore reported the largest year on year increase at 6%. This year, capital spending has increased in basic and industrial chemical companies as the shale phenomenon sparked a wave in projects, with the average capital expenditure for ranked companies increasing approximately 1% year in year to US$ 814 million. Innovation expenses have also increased, according to IHS, and these have done so by 8% year on year as research and development costs have averaged over US$ 350 million.
Last year, industry continued to capitalise on the competitive advantages enabled by shale gas, announcing a new wave of projects to build chemical capacity in North America. 14 crackers have been announced in the last five years alone. Europe’s growth however has been stagnant, say IHS, with industry association Cefic having recently adjusted its forecast for chemical output down to just 1.5% growth for this year from a previous 2% estimate.
However, Wintervelt has said that the top European companies’ revenues far surpass the earnings of top US players. ‘The average 2013 revenue for the top 10 European companies is almost US$ 33 billion, while the top US firms’ average revenue was approximately US$ 24 billion.’
Wintervelt also said, ‘interestingly, the global, major integrated oil companies that persevered through the difficult 1990s and held into their integrated chemical businesses are now benefitting from the advantages of both their access to feedstocks and an integrated value chain to optimise their profitability in the sector. These true, integrated companies such as ExxonMobil, Shell and Total, have an advantage over other, less integrated firms, which is reflected in their profitability. As some of the key producers in the Middle East move to capitalise on their own integration capabilities, they tend to look to ExxonMobil, in particular, as the model to follow.’
Edited from press release by Claira Lloyd
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/28102014/ihs-global-2013-chem-sales-rankings/