Commentary: Regional chemical companies hit hard by the global economic downturn

20 September 2010 00:00  [Source: ICB]

In part two of the ICIS Top 100 Chemical Companies we bring the regions into sharper focus. The tables show a sea of red ink across the four areas we highlight: the Middle East and Africa; Asia excluding Japan; Latin America; and Central and Eastern Europe (CEE) and Russia.

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Financial results for 2009 from Middle East and Africa players did not benefit much from new capacity start-ups, thanks to delays and the fact that a lot was scheduled for this year. Nevertheless, some companies progressed up the main Top 100 list, with South Africa's Sasol moving to 41, up from 57 the previous year, while Iran's National Petrochemical Co. (NPC) moved up from 55 to 44.

Saudi Arabia's SABIC tops the regional table and stayed at seven on the main listing, despite a 32% fall in sales to $27.48bn (€21.14bn). It is over three times bigger than Sasol, its nearest regional rival.

Asia emerged more quickly than other regions from the turmoil of the financial crisis at the end of 2008. China's Sinopec tops the list, with $31.37bn in sales and rose four places to fourth globally. It could well rise further if it makes more acquisitions, forms more joint ventures and brings new projects on stream.

South Korea's Honam Petrochemical has also been very active, merging subsidiary Lotte Daesan Petrochemical and acquiring Malaysia's Titan Petrochemical. Sales in 2009 nearly doubled to $5.13bn.

In Brazil, Latin America's biggest chemical group, Braskem, managed to swing back to a $443m net profit in 2009 from a $1.06bn loss the year before. The company is now well on the way to realizing its ambition to become one of the top five global producers by 2020 after merging with rival Quattor and buying US-based Sunoco Chemicals' polypropylene (PP) business.

Apart from acquisitions, Braskem is also partnering in Mexico's Ethylene XXI project and has other ventures in Peru and Venezuela. It also sees huge potential in manufacturing ethanol-based ethylene to produce "green" polyethylene (PE).

The CEE and Russian economies suffered badly during the crisis and all except Poland went into recession in 2009. Moderate recovery is expected this year with growth returning to all economies with the exception of Hungary and Bulgaria.

The most exciting company in this year's CEE listing is Russia's SIBUR, which has a large number of projects under construction and plans for a 1m tonne/year pyrolysis gas (pygas) cracker at Tobolsk. Sibur rose from 65 to 56 in the main Top 100 listing.

Do you agree? Email: Joseph Chang or go to the commentary blog


By: Will Beacham
+44 20 8652 3214



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