14 September 2012 11:00 [Source: ICB]
Europe-headquartered companies mostly held onto their leadership positions in 2011 despite the strong growth in Asia-based businesses and the challenge of feedstock-advantaged North American operators. Germany's BASF, Dutch-headquartered LyondellBasell Industries, Anglo-Dutch Shell, France's Total, Germany's Bayer, Dutch AkzoNobel and Germany's Evonik all retained the same positions as in 2010, with many of them enjoying substantial increases in sales and operating profits.
Of the chemical groups, only Switzerland's INEOS lost ground, falling one place to 10 on a 18.5% fall in sales, while industrial gases group Air Liquide slid one place to 18. UK group Johnson Matthey rose to 16 in 2011 from 21 in 2010.
BASF achieved record results in 2011. It enjoyed a strong first half, but by the fourth quarter witnessed a slowdown. Customers put off orders in expectation that prices could soften. For 2012, BASF expects to beat its 2011 record levels in sales and income from operations before special items. Resumed Libyan oilfields production should help. But it added: "Prospects are dampened by increased uncertainty, especially in the eurozone, and by slower growth in Asia." It expects second-half sales and earnings to be higher than those for the second half of 2011, based on a global GDP growth forecast of 2.3% and chemical production increase of 3.5%.
LyondellBasell is number two in Europe and number five globally with a 24% increase in sales and substantial boost to operating profits. The company said business conditions in 2011 were improved over 2010 despite the significant economic slowdown. With a large manufacturing base in North America, the company benefitted from the low price of natural gas feedstocks relative to the global price of crude oil. It maximised the use of ethane feedstocks, thereby cutting production costs. But by the fourth quarter, operating profits, hit by weaker refining margins, more than halved to $536m from $1.09bn. In 2012 the company has continued to enjoy improved results driven by the US feedstock advantage. Second-quarter operating results were 11% higher than in 2011 and 44% higher than in the first quarter of 2012. LyondellBasell CEO Jim Gallogly said in July: "Current ethane and propane raw material prices position our North American olefins business to remain advantaged relative to global ethylene producers. On the other hand, our European olefins and polyolefins business will be challenged." The company is mulling an ethylene expansion at Channelview, Texas.
Shell maintained its position at number seven, seeing an 18.5% increase in downstream sales to $46.9bn. Full year 2011 chemicals sales volumes decreased by 2% mainly due to reductions in European capacity and rationalisation of the contract portfolio. Chemicals manufacturing plant availability increased to 92% compared with 89% in the 2011 first half. In the 2012 second quarter, chemicals sales volumes increased by 3% compared with last year because of improved operational performance, partly offset by reductions in European capacity. Chemicals manufacturing plant availability was 89% compared with 87% in the 2011 second quarter.
INEOS 2011 results were hit in the fourth quarter by delayed cracker restarts and market conditions in China and the EU.
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