The Global Top 50

This week’s cover story is C&EN’s annual Global Top 50 chemical companies by Senior Correspondent Alex Tullo, who has been preparing it since 2009. C&EN has been producing the Global Top 50 since 1990, making this the 25th edition of the feature.

Some things change rapidly in the chemical industry. One that doesn’t change is BASF, which was the world’s largest chemical company in 1990 and remains the world’s largest chemical company in 2014. In fact, BASF has topped the Global Top 50 for all but five years—in 2001 and 2002, Dow Chemical and DuPont claimed the top two spots on our list, and from 2003 through 2005, Dow was the top company with BASF number two.

But many other changes have occurred. As Tullo pointed out to me in an e-mail, fully half the companies on the 1990 Global Top 50 either no longer exist or have strikingly different corporate personas. Hoechst, number three in 1990, has long since been broken up and exists today as a variety of corporate entities such as Celanese and Clariant. Degussa, number 12 in 1990, exists today as Evonik Industries, number 21 in 2014, and Umicore.

Some companies have an appetite to grow larger through acquisitions. Dow acquired Union Carbide, number 11 in 1990, in 2001 and swallowed Rohm and Haas, number 46 in 1990, in 2009. That acquisition was a messy affair that at one point threatened Dow’s corporate existence.

Other companies have simply exited chemicals. General Electric was number 23 in 1990, but chemicals made up only 9% of its total sales and eventually were deemed expendable. In 2007, GE sold GE Plastics to Saudi Basic Industries Corp. (SABIC) (number four in 2014) and sold its advanced materials business, a maker of silicones and specialty quartz, to a private equity firm that renamed it Momentive.

The sheer size and growth of the chemical enterprise comes through in the Global Top 50 tables. In 1989, BASF had chemical sales of $17.1 billion, which accounted for 60% of its total sales; in 2013, BASF had chemical sales of $78.6 billion, accounting for 80% of its total sales. In 1989, the 50 largest chemical companies had $310 billion in total chemical sales; in 2013, that figure had reached $980.5 billion. Even in constant dollars, BASF has far more than doubled in size and the sales of the Global Top 50 have nearly doubled.

Some numbers jump out at you. In 1990, Saudi Basic Industries, founded by royal decree in 1976, was number 34 on the Global Top 50. Ten years ago, as SABIC, it had climbed to number 12. In this year’s ranking, it has moved up to number four, trailing only BASF, Dow, and China’s Sinopec.

Sinopec itself was created in 2000 and made the 2001 Global Top 50, settling in at position 25 with $6.8 billion in chemical sales, only 17.4% of total sales, and a profit margin of 4.3%. By 2004, Sinopec had climbed to number 13 with $9.7 billion in chemical sales and a profit margin of 2.5%. In the 2014 Global Top 50, Sinopec has ascended to the number two position with $60.8 billion in chemical sales (13% of total sales) and operating profits of $103 million, for a paltry profit margin of 0.2%. They’re making more of whatever they make at Sinopec and selling it at poorer and poorer margins!

Thanks for reading.