LİNK : https://chemweek.com/cw/billion-dollar-club-2017
|Bock: BASF grabs top spot for ninth time in ten years.
For the ninth time in 10 years, BASF has claimed the top spot in CW’s annual ranking of the industry’s largest companies by revenue, with Sinopec and Dow Chemical, respectively, once again rounding out the top three. The top six companies —BASF, Sinopec, Dow, Formosa Plastics, ExxonMobil and Sabic—are, as a group, also the same as last year, although Formosa has moved up a couple of spots.
Not only does this year’s leaderboard look quite similar to that of last year, profit and revenue trends were similar, as well. For the second consecutive year, the companies ranked in CW’s billion-dollar club saw declining revenues and rising profits. Average revenue among the 101 ranked companies totaled $10.59 billion in 2016, down 2% year-on-year (YOY). Median revenues were down 3% YOY to $6.5 billion. The declines were similar in 2015.
BASF once again was the only company to top $50 billion in chemicals revenue in 2016. Four companies—BASF, Sinopec, Dow, and Formosa Plastics—topped $40 billion, the same figure as last year.
Among the top 10 companies, Sinopec and Ineos were the only ones to report YOY revenue increases in local currency, although Sinopec’s dollar revenues were hit by exchange rates. Similarly, only two companies in the top 10—Dow and LyondellBasell —reported YOY declines in operating income. Some 63 of the 101 companies in CW’s ranking saw revenues decline during 2017, but only 31 companies saw operating income decline.
Indeed, profits showed solid growth. Average chemical operating income at the 101 companies rose 13% YOY to $1.35 billion. Median profits were up 7% to $711 million. These figures represent 12.7% of average sales and 10.9% of median sales, respectively. Disciplined operational management has been a key theme for many chemical makers in recent years.
Note that several companies with substantial chemical operations did not report chemical revenues. These include ChemChina, Koch Industries, Shell, and Total. Some of these companies did not respond to CW’s requests for information.
|Yupu: Sinopec steady at #2; tops in APAC.
The 101 companies in CW’s ranking were roughly evenly split between the Americas, APAC, and EMEA. Of the three regions, the largest companies were in EMEA. The average EMEA company generated $11.4 billion in revenue in 2016 and $1.54 billion in operating income; with the medians standing at $8.13 billion, and $858 million, respectively. Profits were up 17% YOY on average in EMEA, and 8% YOY at the median. The average sales figure was flat YOY, while the median sales figure fell 2%.
APAC firms reported $10.5 billion in sales on average, and $6.39 billion in sales at the median, down 3% and 2% YOY, respectively. Operating income in APAC rose strongly: up 22% YOY at the average to $1.19 billion, and up 13% YOY at the median to $672 million.
Companies in the Americas reported the weakest profit growth, with median profits actually down 4% YOY to $589 million. Average profit in the Americas increased, but only slightly—it was up 2% YOY to $1.31 billion. The 38 companies headquartered in the Americas were also the smallest, on average, in CW’s ranking. Average revenues for Americas firms fell 3% YOY to $9.94 billion. Median revenues, meanwhile, were down 5% YOY to $5.59 billion.
The figures are based on company reports, and may not line up perfectly with last year’s billion-dollar club, due to differences in the data set. These differences may occur as a result of changes in corporate reporting practices, or the exclusion of firms that fell below the $3 billion revenue threshold in 2016.
New day coming?
Market conditions in 2016 represented a continuation of the status quo for much of the industry. Demand growth was tepid and variable, although usually positive. Low energy prices were a blessing for some chemical producers, and a curse for others, although the latter group has mostly adjusted to the new energy normal. Agchems markets mostly remained weak.
But political uncertainty grew through the year, and megamergers point new competitive landscape for the industry in the near future. “Political uncertainties in particular have rarely been this high,” BASF chairman Kurt Bock said in a letter to shareholders in February. “The impact of Brexit remains unpredictable; it affects our competitiveness as well as that of our customers in our home market of Europe, where, moreover, important elections are taking place. Protectionism is may seem sweet at first, but it is poison. Around the world, we are seeing a trend toward trying to create prosperity through isolation rather than cooperation.” And while industry has cheered many of the Trump administration’s regulatory initiatives, many executives have expressed apprehension about trade policy and the general unpredictability of the still-new US president.
|Liveris: Dow at #3, would top ranking with DuPont.
Emerging-market producers are aware of these uncertainties, as well. “Looking ahead to 2017, we expect the global political and economic landscape to become more complex, with international oil prices hovering at low levels,” Sinopec chairman Wang Yupu said in the company’s annual report. Yet Sinopec also “[believes] that more positive trends will emerge in China’s economy, driving faster growth in domestic demand for petroleum and petrochemical products.”
Domestic demand for chemicals in China grew in 2016, although rates varied. Ethylene equivalent consumption was up 3.0% YOY, synthetic resin consumption 5.1%, and synthetic fiber consumption was up 2.6%, according to Sinopec. GDP growth in China continued to decline—to 6.7% in 2016, compared with 6.9% in 2015 and
7.4% in 2014.
In North America, chemical makers are looking to cheap feedstocks to create a competitive advantage despite tepid domestic demand growth. US chemicals production volumes grew by just 0.9% in 2016, according to ACC, while GDP grew 1.6%. Yet Dow Chemical led the industry in capital expendtiures in 2016, with $3.8 billion (see table). Five of last year’s top 10 companies in capital spending were based in North America, and a sixth—Sasol—is building a major petrochemical complex on the US Gulf Coast.
Dow chairman and CEO Anderew Liveris emphasized the company’s capital plans in his annual letter to shareholders in February. “Our expansion in Louisiana and the startup of one of our polyethylene facilities in Texas show what we can expect from these $6-billion investments as they take US-sourced ethane and propane from shale gas and convert them into vital products for the US and overseas consumers,” Liveris said.
That letter, of course, will be Liveris’ last as chairman of Dow Chemical. Dow’s $130-billion merger with DuPont closed in late August, and the combined company would easily take the top spot in CW’s billion-dollar club ranking. Dow and DuPont together generated $72.7 billion in revenue during 2016.
But the new leader’s reign will be brief; DowDuPont will become three separate companies by the beginning of 2019. After some recently announced changes to the proposed spin-offs (p. 7), all three of them would have had revenues north of $20 billion last year.
The churn at Dow and DuPont, two iconic firms temporarily joined together, mirrors the the overall industry. Bayer spun off Covestro and is now acquiring Monsanto. DuPont, of course, spun off Chemours prior to merging with Dow. Air Liquide has become the top industrial gases producer—and nearly cracked the top 10 overall—thanks to its acquisition of Airgas. But, like DowDuPont, Air Liquide’s reign will be brief, as Linde and Praxair have agreed to merge.
Meanwhile, Sherwin-Williams has become the world’s top coatings maker after the acquisition of Valspar; the two firms combined for $16 billion in revenue in 2016. Bayer and Monsanto would combine for $23.9 billion in 2016 revenues; Huntsman and Clariant would combine for $15.4 billion; Linde and Praxair for $28.4 billion. Many of these deals will surely also result in major divestitures, for both regulatory and strategic reasons. The relative stability of the last few years may yet prove to be fleeting.
Dustin Smith and Robert Westervelt also contributed to this article.
All figures in millions of US dollars. Ranking includes companies with chemical revenues of more than $3 billion for fiscal years ending 1 July 2016 through 30 June 2017.
a: excludes nonchemical businesses b: includes intersegment sales c: changed organizational reporting structure and/or significantly altered chemical operations d: operating income represents EBITDA e: operating income represents net income q: fiscal year ended 31 March 2017 qq: fiscal year ended 30 June 2017 qqq: fiscal year ended 30 September 2016 qo: fiscal year ended 31 October 2016 qm: fiscal year ended 31 May 2017
NA: not available NM: not material. *In local currency
Exchange rates used for dollar conversion based on rates at end of each company’s respective fiscal year. As of 31 December 2016, $1.00 = €0.05; ¥116.7; 3.75 Saudi riyals; 6.95 renminbi; 3.25 Brazilian reais; 8.62 Norwegian kroner; 1.02 Swiss francs; 0.81 British pounds; 35.76 Thai baht; 60.8 Russian rubles; 32.3 New Taiwan dollars; 1,203.5 South Korean won; 4.48 Malaysian ringgit; and 20.67 Mexican pesos. As of 30 September 2016, $1.00 = 1.30 Australian dollars. As of 31 March 2017, $1.00 = ¥111.2 and 64.75 Indian rupees. As of 30 June 2017, $1.00 = 12.96 South African rand.
2018 DÜNYA KİMYA TRÖSTLERİ TABLOSUNU BURADAN İNDİREBİLİRSİNİZ.