22 April 2002 00:00 [Source: ICB Americas]A new report by Deloitte Consulting, which names the top 100 performing global manufacturers, based on current as well as future expected performance, shows little representation from the chemical industry. The study, which evaluated the world's largest 1,000 manufacturing companies, used a framework to gauge how organizations are performing today and how they are expected to take advantage of future investment opportunities. The criteria based on cash flow return on investments (CFROI) allowed for global and cross-industry comparison.
No chemical company made the top 100 using these criteria, which listed Dell Computer and Oracle as the number one and number two global manufacturing companies, respectively. Nokia Oyj, Anglo American Platinum, Coca-Cola, Itochu Techno Science, Colgate-Palmolive, Siebel, Amgen and Imperial Tobacco Group rounded out the top ten.
In applying the CFROI metric specifically on the chemical industry, the top three performers were RMP, Engelhard and Air Liquide among specialty chemicals companies. Top performers in the diversified chemicals category were Rohm and Haas, Shin-Etsu Chemical and DuPont, according to the Deloitte study. For chemicals/basic industrial companies, Valspar, Sherwin Williams and Sumitomo Bakelite took top billing.
However, comparing the performance index of these companies to the top companies shows how the chemical industry is well behind other manufacturing companies. The performance index is a composite of current performance (defined as CFROI minus cost of capital in percent) and the expected future value (defined as expected value of future investments as a percentage of current market value).
Manufacturing leaders Dell and Oracle scored 91 and 79.4 respectively on the performance index, compared to scores ranging from a high of 28.2 for Valspar to a low of 5.5 for Sumitomo Bakelite among the top performers. RPM pulled in 24.9, Engelhard 21.6, Air Liquide 12.6, DuPont 11.2, Rohm and Haas 15.5 and Shin-Etsu 14.9. These scores were below the top 100 companies, but were ahead of the overall performance of the chemical industry. Overall, chemicals/basic industrial companies scored a -19.4 on the performance index, diversified chemical companies -9 and specialty chemical companies -6.8.
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