The financial crisis has highlighted the need to move away from the simplistic approach of the “shareholder value” cult, where short-term targets dominate company thinking. Even Jack Welch, former GE CEO and original instigator of the approach, now agrees that the concept was “a dumb idea“. The blog therefore welcomes DSM’s new approach to the […]
Chemicals and the Economy
Global chemical production ends 2009 at Q4 2006 level
The good news is that global chemical production (the blue diamond line) grew during H2 2009. At the end of H1 2009, it had been equal to the level at the start of 2006. The bad news is that as the chart shows (based on data kindly supplied by Kevin Swift at the American Chemistry […]
Dow puts debt problems behind it
A year ago, the Dow Chemical stock price was below $6, giving the company a total market capitalisation of just c$7bn. Since then, Dow has regained the initiative in a very focused way. First, it sold Morton Salt for $1.7bn, then it sold $2.25bn of new equity and refinanced $4.65bn of long-term debt. Next, it […]
The need for innovation during the downturn
The blog was recently interviewed by ICIS’ Anna Jagger at Vienna Airport, on its way back from the World Refining Conference. The conversation covered the need for companies to focus on innovation, as well as on survival, during the downturn. It also highlighted specific examples of opportunities that could be pursued today, within the context […]
“Green shoots” of recovery disappear from sight
A year ago, Ben Bernanke (head of the US Federal Reserve), startled financial markets with his claim that “green shoots” of recovery were now visible. This helped to lead to a major stock market rally, based on the sentiment that the US and other western economies would quickly bounce back to 2003-7 growth levels. Observers […]
Regional competition set to grow in Asia, as export opportunities reduce and imports increase
The above chart presents an excellent snapshot of the development of Asia’s chemical industry over the past 20 years. It comes from the American Chemistry Council’s global production report, and shows volume growth in each country/region, with a base of 100 in 2002. • China (blue line) has seen the largest growth over the past […]
CEOs remain cautious over 2010 Outlook
The blog’s quarterly survey of company Outlook statements shows CEOs remain very cautious. There has been a rebound after the destocking disaster of Q4 2008 – Q1 2009. But there seems little confidence that we will quickly return to the levels of demand and margin seen in the 2003-7 Boom period. China’s stimulus and loan […]
World trade sees biggest fall in 65 years, GDP declines
World trade fell 12% last year, its worst decline since 1945. First estimates also suggest global GDP fell 2.2%, according to Pascal Lamy, head of the World Trade Organisation. This confirms the World Bank’s fears back last March, that the global economy might shrink for the first time since World War 2. Lamy went on […]
Carrefour CEO sees “challenging” times ahead
France’s Carrefour is the world’s 2nd largest retailer, with sales of €86bn ($117bn). Reporting 2009 results, CEO Lars Oloffson echoed Wal-Mart’s CEO Mike Duke, saying he saw “challenging” times ahead. And he added that “I don’t see any improvement in the short term in the economic environment. That means very clearly that we have to […]
US housing starts 74% below 2006 peak
15% of Americans were either in foreclosure, or at least one payment overdue, according to the Q4 Mortgage Bankers Association survey. This is a record high, but the MBA sees some signs that the numbers may have peaked. It is concerned, however, over the rise in the number of long-term unemployed, now a record 40% […]
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