And Calm Prevailed

Calm. That may be the best word to describe the chemical industry in 2013. What looked to be threats to the sector at the beginning of the year—a Chinese slowdown, Europe’s debt crisis, budgetary impasses in the U.S.—never erupted into calamities. Performance fell neatly into trends: Europe declined, Asia slowed, and the U.S. grew.

Merger and acquisition activity abated somewhat in 2013, which is saying something given that 2012 wasn’t exactly a banner time for deal-making. However, two of the largest U.S. chemical firms, DuPont and Dow Chemical, launched major divestiture initiatives during 2013 intended to focus their businesses on specialty products.

Capital investment patterns didn’t surprise either. Access to U.S. shale gas still drove investment, although new plant announcements came at a less prodigious pace than during the previous two years when the prospect of an exploitable new source of feedstock was still exciting chemical executives.

This was also a year in which established chemical companies gained more confidence in industrial biotechnology and in biosourced new materials. But whereas biotech chemical producers and industrial users pressed ahead, the public wasn’t especially receptive to the green alternatives.

On the intellectual property front, it was another contentious year. Patent lawsuits were fought, and one between Monsanto and DuPont resulted in a multi-billion-dollar settlement.

For instrument makers, it was a year shadowed by some consolidation and government spending limitations that dragged down purchasing. Meanwhile, specialty chemical makers contended with spotty markets and tried to position themselves for better times ahead.