The US "Chemical Weekly" recently released the latest ranking of the billion-dollar club of global chemical companies in 2019. In terms of sales revenue in 2019, BASF has returned to the top of the billion-dollar club with annual sales revenue of 66.647 billion US dollars. In the 2017 and 2018 lists, BASF gave the top spot to Dow DuPont. Sinopec (SINOPEC) still ranked second, and the newly independent Dow Chemical (Dow) ranked third. The "Chemical Weekly" Billion Dollar Club is the annual ranking of the world's chemical manufacturers with annual sales revenue of more than 3 billion US dollars.
The top 5 companies this time are BASF, Sinopec, Dow, ExxonMobil and Formosa Plastics. These 5 companies are among the top five companies in 2016. However, Formosa Plastics ranked fourth in 2016, while Exxon Mobil ranked fifth. The sixth to tenth in this ranking are Lyondell Basel, Saudi Basic Industries Corporation, China National Chemical Corporation, Mitsubishi Chemical Corporation and Linde Corporation.
Chemistry Weekly’s billion-dollar club data is based on reports from various companies. Due to differences in data collection, it may not be completely consistent with the billion-dollar club rankings of the previous year.
In addition, several companies with a large amount of chemical business failed to participate in this year's ranking because they did not fully report chemical revenues publicly, including Ineos, Koch Industries, Shell, Total and PetroChina (PetroChina).
In addition to the top 5 in the list, mergers and acquisitions continue to affect the billion-dollar club rankings. After the reorganization, DuPont ranked 13th on the list, and Corteva, the spin-off of DowDuPont's agrochemical business, ranked 25th for the first time. Both Bayer and ChemChina, which have a large number of agrochemical businesses, are ranked higher than Corteva. ChemChina ranks eighth on the list and Bayer ranks twelfth. 2019 is also the first year after Linde and Praxair merged. New Linde ranks tenth in the ranking, while industrial gas competitor Air Liquide ranks 11th.
Last year, the sales of chemical companies worldwide generally declined. For example, BASF and Sinopec are two companies with a sales revenue of more than US$50 billion in 2019, while there were four companies in each of the previous two years. However, in 2019, there were 40 companies whose sales revenue exceeded $10 billion, which was the same as in 2018.
Despite this, the sales revenue and profits of chemical companies in 2019 have fallen sharply. The 99 billion-dollar club companies included in the list had an average chemical sales revenue of US$11.9 billion, down 2% year-on-year. The average operating profit was US$1.15 billion, a year-on-year decrease of 11%. Among the 99 companies in the billion-dollar club this year, 60 companies saw sales decline, and 39 companies increased or remained flat.
Last year, the sales revenue of chemical companies in the Americas and the Asia-Pacific region fell the most. The median sales revenue of companies in the two regions fell by 6% year-on-year. Sales revenue of EMEA chemical companies was roughly flat year-on-year. The average sales revenue decline in the Americas region is greater than that in the Asia Pacific region. The average sales revenue of EMEA actually increased year-on-year, but the average revenue also followed a similar pattern. The median operating profit of chemical companies in the Americas and the Asia-Pacific region fell by double digits last year, the median operating profit of EMEA fell by single digits, and the overall profitability of the world was declining. The average operating profit trend is similar. The median profit margin has also fallen. The median operating profit margin of the ranking companies in 2019 was 10.2%, lower than the 11.9% in 2018.
BASF’s chairman of the board of directors, Bo Murray, said in February that the market had been challenging throughout the year last year. Contrary to expectations at the beginning of the year, the economic environment in 2019 is not so good. Trade conflicts, political uncertainty, and a sharp drop in demand from major customer industries (especially the automotive industry) have put tremendous pressure on the company's business. The price drop last year exceeded expectations, and overall BASF was not satisfied with the performance. BASF is also adjusting its product portfolio. In 2019, it divested its oil and gas, paper chemicals and pigments businesses, and completed the acquisition of agrochemicals and polyamide businesses.
As far as Sinopec is concerned, the main reason for the decline in operating income of the company's chemical sector is that the increase in production capacity has led to a sharp drop in the price of chemical products and the resulting changes in the supply and demand structure. Of course, all these challenges have been overshadowed by the outbreak.
