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Volume 86 Issue 27 | p. 3 | Editor's Page
Issue Date: July 7, 2008

Facts & Figures

Department: Business, Editor's Page

This week's cover story is C&EN's venerable Facts & Figures, the most complete set of statistics on the chemical industry available anywhere for the cost of membership in the American Chemical Society.

Facts & Figures covers 40 consecutive pages of this week's issue. Assembling the data for Facts & Figures involved the work of seven members of C&EN's Business Department staff led by Assistant Managing Editor Michael McCoy (see page 35 for their names). Getting the graphs and tables into publishable form took the efforts of all of the C&EN Editing & Production team, led by Managing Editor for Production Robin Giroux, and C&EN's Art Department and Production & Imaging, specifically Yang Ku and Krystal King. Getting all of this on the Web occupied the entire staff of C&EN Online led by Editor Rachel Pepling.

The C&EN Online team, in fact, is still working on their component of Facts & Figures. As we first did with the 2005 edition of this feature, all of the tables will be downloadable as .csv files for readers to use and manipulate according to their needs. That component of Facts & Figures will go live no later than July 21.

So how is the global chemical industry doing? The numbers from 2007 suggest that the answer to that question is, pretty well. "The global chemical industry enjoyed continued strong demand in 2007, despite rising prices for petrochemical feedstocks," we report in our section on finances. "Producers raised prices, but not dramatically; therefore, increased sales did not lead to higher profits in the U.S. or Europe. On the whole, however, firms were able to extend the solid financial performances of 2006."

The strongest chemical sectors, perhaps not surprisingly given the surge in production of biofuels, were those "whose products are used or produced on farms. Prices in the U.S. for inedible fats and oils rose 28.1% during 2007, and agricultural chemical prices increased by 14.5%."

The solid financial performances of chemical companies around the world led to increased investment in capacity and R&D. But the numbers here hold a cautionary note for U.S. chemical firms. We report that "spending on new plants and equipment by 22 major U.S. chemical firms rose an admirable 10.6% in 2007 to $9.21 billion; still this growth was less than half that seen in 2006, when capital spending soared 22.6%."

While those numbers suggest healthy investment, U.S. spending is lower than in Europe and Japan. Nineteen European chemical companies C&EN tracks spent a combined $16.0 billion on capital, a 10.3% increase over 2006, and 12 Japanese firms spent $10.1 billion, a 7.7% increase.

A similar picture emerges for R&D spending. The 22 U.S. chemical companies spent a combined $5.38 billion on R&D in 2007, a 6.6% increase over 2006. Although a number of European firms saw declines in R&D spending, overall, the 19 companies followed by C&EN spent a combined $11.6 billion. While the 5.9% increase over 2006 for the European firms was smaller than the increase for U.S. firms, total R&D spending—investment in the future—was more than double in Europe.

Only two U.S. firms, Dow Chemical and DuPont, spent more than $1 billion on R&D in 2007. By contrast, four European firms—Bayer, BASF, Lonza, and Solvay—spent more than $1 billion, with Bayer leading all chemical companies worldwide with $3.5 billion in R&D spending.

U.S. pharmaceutical firms' R&D spending dwarfed that of U.S. chemical firms, with eight companies spending a combined $36.1 billion. Pfizer, at $8.1 billion, and Johnson & Johnson, at $7.7 billion, outspent the 22 chemical companies combined.

As always, graphs are remarkable tools for visualizing numerical data. The graph of U.S. chemical production by month from 2003 through 2007 on page 61 captures beautifully the impact nature can have on human activity. When I first glanced at it, I thought, "What in the world happened in August or September of 2005?" I mentioned it to Giroux, and she immediately said, "Hurricanes Katrina and Rita." Of course.

I hope you gain some useful insights into the performance of our industry in these pages of Facts & Figures.

Thanks for reading.

 

Views expressed on this page are those of the author and not necessarily those of ACS.

 

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