ICIS Top 100 Chemical Companies: North America

2013 was a solid year for both sales and profit gains for the top 10 chemical companies based in North America as the US economy continued its recovery, although at a slow and steady pace. Producers with petrochemical assets in the US also benefited from the shale gas boom as natural gas liquids (NGL) feedstock costs remained low.

On the top line, PPG Industries and Ecolab showed notable revenue gains of nearly 12% each, aided by mergers and acquisitions (M&A). The bottom line was even better as earnings surged 38% for both PPG and Ecolab.

Coatings giant PPG Industries received a boost from the acquisition of AkzoNobel’s North American architectural coatings business but also saw higher organic sales growth in 2013, propelling it from the #6 slot in 2012, to #5 for 2013 with $15.1bn in sales. Expect even higher sales and earnings growth from PPG in 2014 and beyond. In June 2014, it agreed to buy Mexico-based coatings company Comex for $2.3bn. Comex has annual sales of around $1bn.

Ecolab, which specialises in institutional cleaning, water treatment and oilfield chemicals, booked $13.3bn in sales in 2013, also moving up a notch to the #6 position on the leaderboard.

Ecolab acquired US-based oilfield chemicals company Champion Technologies for $2.3bn in April 2013, tacking on around $1.3bn in annual sales.

Coatings company Sherwin-Williams made its way into the Top 10 with a 6.8% sales gain to $10.2bn for 2013, also aided by acquisitions, while earnings rose 19%.

Looking ahead, there are two diverging trends. On the growth side, three of the top 10 – ExxonMobil Chemical, Dow Chemical and Chevron Phillips Chemical and are building major petrochemical and derivatives projects, primarily on the US Gulf Coast to take advantage of shale gas economics. That will add to revenues, but mostly starting in 2017-2018.

Also on the growth side, companies such as PPG Industries, Sherwin-Williams and Ecolab are still seeking growth through M&A, boding well for future moves up the rankings. Huntsman will get a big boost if it is able to complete its planned $1.1bn acquisition of Rockwood Holdings’ titanium dioxide (TiO2) and performance additives business. The deal has been awaiting European Commission approval.

On the other side of the equation, companies such as DuPont and Dow Chemical are seeking to trim their portfolios – Dow through sales of non-core assets and the separation of its chlorine and derivatives business, and DuPont through the separation of its performance chemicals segment, which consists mostly of TiO2. These moves could impact sales significantly in the years to come.