13 September 2010 08:18 [Source: ICB]
This year's near 20% fall in revenues assessed against the ICIS Top 100 industry players marks a demotion from above the trillion-dollar point. Regardless of that, the numbers remain eye-wateringly large. Companies are characterized by many aspects but the bare-faced financial data tends to be one of the strongest focus points for everyone.?xml:namespace>
Companies are characterized by many aspects, but the bare-faced financial data tends to be one of the strongest focus points for everyone.
What is clear is that we are almost all directly and indirectly impacted by the chemical industry and this league table of the sector giants is hugely important.
top 10 giants
Despite the sharp reduction of revenues in 2009, the Top 10 giants have broadly maintained their share of the Top 100 at around 36%. This is larger than the second tier of 50 players by around 70%. This scale effect could be even larger if considering the impact of equity accounting where joint venture revenues are excluded from most consolidated accounts.
The Top 100 total revenue of $997bn is around 39% of total world chemical shipments revenue excluding pharmaceuticals in 2009 as measured against data assessed by the American Chemistry Council.
winners and losers
SABIC lost the top position this year to BASF. Six of the top 10 earners were there a year ago. The solid delivery from industrial gases players is clear. The new arrivals in the top 10 were Petronas, Reliance, Syngenta and LG Chem. The departures from the top 10 were Rohm and Haas (absorbed into Dow Chemical), Shin-Etsu, PotashCorp and Mosaic - the latter two because of weaker performance from the fertilizer market. At the bottom, the staggering impairment losses of LyondellBasell were not repeated, but significant losses were recorded again for PEMEX and Polimeri Europa.
The chemical arms of oil majors dominate this area, but those with higher volume commodity chemical and refinery footprints are also apparent.
As specialization and moves away from commodities are seen, a common result is a reduced level of sales/employee.
investing to stay in the game
Companies operating in specialties and advanced materials remain the biggest investors in research and development. Note that for the declared data, BASF is the largest spender in this area in absolute terms. The Top 100 total spend fell by $100m or by 0.5% in 2009 compared to 2008, which certainly is not a major retrenchment despite the impact of the global financial crisis and ensuing recession. It confirms the continued drive of the industry to innovate.
cheapest back office
One measure of a company's efficiency is how much it spends on selling, general and administrative expenses (SG&A). Leading players do appear to have driven more efficiency in absolute terms this year, but costs have increased relative to sales as total revenues were down some 20% for the Top 100.
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