European Chemical Firms Wrangle Higher Sales

Demand for chemicals was soft in the third quarter, but most major European chemical firms reported higher overall sales and earnings. For BASF, strong demand for products in its agriculture and oil and gas segments helped lift sales 8.0% to $24.7 billion over the year-ago period. Earnings before interest and taxes rose 5.4% to $2.7 billion. In chemicals, BASF had weak sales in performance products and functional solutions, whereas demand for plastics and basic chemicals was up. At Bayer, an expansion in life sciences—both pharmaceuticals and agricultural products—powered a 5.5% increase in quarterly sales to $12.6 billion; earnings rose slightly. Earnings at Bayer MaterialScience were down because of lower polycarbonate sales and higher costs. Solvay, AkzoNobel, and Clariant all reported higher revenues but lower sales volumes due to the weak economy in Europe and slowing growth in Asia and other developing regions. Wacker Chemie reported that third-quarter sales eroded 6.2% to $1.6 billion compared with last year and earnings sank 35.7%. The drop was due to Wacker’s polysilicon business, which is suffering from lower prices, overcapacity, and consolidation in the solar industry.