ICIS names Chevron Phillips Chemical as Company of the Year

26 September 2011 09:00  [Source: ICIS news]

CPChem CEO Peter CellaLONDON (ICIS)--ICIS announced on Monday that US group Chevron Phillips Chemical (CPChem) is the winner of the ICIS Company of the Year, based on its outstanding financial performance in 2010.

Analysis of important financial metrics by ICIS shows that CPChem beat its rivals in a year in which the entire industry enjoyed a solid recovery from the lows of 2009. Sales rocketed by a third to $11.2bn (€8.3bn) in 2010 while operating and net profits more than doubled to $1.5bn.

The analysis looks at overall financial performance of the world’s leading chemical players as well as changes in some of the key metrics year on year. CPChem produced a strong performance in this ratio analysis, recovering solidly from a difficult 2009.

It came first in the analysis among a group of elite petrochemical players, including Saudi Arabia’s SABIC, Austria-headquartered Borealis, US-based Dow Chemical and Netherlands-based LyondellBasell.

ICIS Insight Editor, Nigel Davis, said: “CPChem’s solid 2010 sales and profits gains underpinned the comparative performance against its peers. The company produced sales and profits gains among the top 20 in the industry.”

Still in recovery mode, the sector produced returns well above expectations on the back of growing demand and higher prices. For CPChem, operating margin (operating profit to sales) rose to a healthy 13.4%, 5.0 percentage points higher than in 2009.

Formed in 2000 as a 50:50 joint venture between US oil and gas companies Phillips Petroleum (now ConocoPhillips) and Chevron, the US-based chemical producer measures its own performance against those of seven peer companies.

It is now in the first-quartile of the group, noted CEO Peter Cella, who joined CPChem in February after serving in a variety of executive posts at Germany’s BASF, INEOS Nitriles, and UK-based companies Innovene and BP.

The company uses its cash earnings as a metric when comparing its performance with its peers. But in its first year, CPChem was “dead last” among its peers, noted Cella.

“It is quite a stunning story of progress and achievement over the last decade that we are quite proud of,” said Cella.

The company has continued to perform strongly in 2011, benefiting from still-strong ethylene margins in the US and its joint-venture positions.

It has also announced its intention to capitalise on the expected greater availability of ethane in the US from shale gas extraction, by building a world-scale ethane cracker and ethylene derivatives units at one of its US Gulf Coast locations.

CPChem is evaluating sites and talking to contractors with the aim of completing a feasibility study for the project by the end of this year. The new cracker could add about 4% to US ethylene capacity, some industry sources have suggested.

The ICIS Top 100 Chemical Companies table was compiled by Lara McNamee, Regan Hartnell and the ICIS data & analytics team led by Paul Ray. A PDF version is available for download here.

Click here to see the full ICIS interview with CEO Peter Cella.

($1 = €0.74)

  • Additional reporting by Brian Ford in Houston and Joe Chang in New York

For more on CPChem visit ICIS company intelligence

By: Will Beacham
+44 20 8652 3214

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