C&EN’s Global Top 50 chemical firms for 2022

The world’s chemical industry has recovered from the COVID-19 pandemic and is now riding the wave of higher prices

by Alexander H. Tullo

The world’s chemical industry didn’t just grow in 2021, it positively swelled.

According to C&EN’s latest Global Top 50 survey, the world’s 50 largest chemical companies, in aggregate, posted sales of $1.1 trillion in 2021, the fiscal year that forms the basis of the ranking. That’s a 38% increase over the combined total for the same 50 firms in 2020.

Profits more than kept up. Chemical operating income for the 41 firms that break out such numbers jumped 148% in 2021, hitting $127 billion.

There are two big reasons for the spike in chemical sales and earnings in 2021. First, the world’s economy sagged in 2020 on account of the COVID-19 pandemic. This downturn hit the chemical industry, albeit not as severely as it did industries like aerospace and automotive. The 50 firms that appeared a year ago in C&EN’s survey posted a 7% decline in sales. And they posted earnings declines for the second year in a row. With the world economy recovering in 2021, it stands to reason that chemical sales recovered as well.

Also related to the spike is inflation, the likes of which some countries around the world haven’t seen in decades. According to the Energy Information Administration, the US benchmark oil price rose from $47.07 per barrel in December 2020 to $71.69 a year later.

The chemical industry, most of which relies on oil as a raw material, responded by raising prices in kind. According to LyondellBasell Industries, US and European ethylene prices increased by 35% and 60%, respectively, in 2021, while polyethylene prices rose about 45%. Prices for ammonia more than doubled.

Thus, the healthiest sales increases seen in the Global Top 50 came from petrochemical companies. Sabic, Formosa Plastics, PetroChina, LyondellBasell Industries, and ExxonMobil Chemical all clocked in with sales increases of 40% or more. Also riding the crest of the commodity price wave are fertilizer makers such as Yara, Nutrien, and Mosaic, which posted astounding increases in sales.

1 BASF
2021 chemical sales: $93.0 billion

For the third consecutive year, BASF heads the Global Top 50. Because it has a home base in Germany, the company was strongly impacted by Russia’s invasion of Ukraine. BASF pledged in April to wind down operations in Russia and Belarus, which represent about 1% of its sales. The company says it will continue supplying agrochemicals to these countries to avoid disrupting the world’s delicate food supply chain. BASF has also been affected by the severe increase in European natural gas prices that the war has exacerbated. In March, BASF chairman Martin Brudermüller told a Houston audience at the IHS Markit World Petrochemical Conference that “European industry really has to rethink” its strategy, given its dependence on natural gas from Russia. The war has also affected the company’s Wintershall Dea energy joint venture, which has extensive operations in Russia. During the first quarter, BASF took a $1.2 billion write-off related to the cancellation of Nord Stream 2, a natural gas pipeline between Germany and Russia that Wintershall helped finance. BASF is also anticipating the coming energy transition. The company is carving out its emission catalyst business, which it acquired with its 2006 purchase of Engelhard. The move is a response to the dim outlook for internal combustion engine vehicles and could be a prelude to a sale. BASF has simultaneously been trying to grow as a producer of materials for electric vehicle batteries and aims to spend $5 billion on production capacity outside Europe.

Credit: BASF

Mixed metal oxide cathode materials being prepared at BASF

3 Dow
2021 chemical sales: $55.0 billion

In 2020, Dow revealed its aspiration to reach carbon emission neutrality by 2050, and at an investor event in October, it detailed its plans to get there. The company aims to spend $1 billion per year, about a third of its capital budget, to decarbonize its petrochemical sites around the world one by one. Topping that list is Fort Saskatchewan, Alberta, where in an industry first, the company will build a carbon-neutral ethylene cracker. An autothermal reformer will process the cracker’s off-gases to generate hydrogen that will be burned in the cracker’s furnaces instead of natural gas. Dow will capture the resulting carbon dioxide and inject it into Alberta’s CO₂ pipeline for sequestration. Dow’s sustainability push extends beyond greenhouse gases and into plastic waste. At the October event, for example, the company said it would collaborate with Fuenix Ecogy to build a waste plastics pyrolysis plant in the Netherlands.

9 LyondellBasell Industries
2021 chemical sales: $39.0 billion

Some chemical companies have been ditching commodities to focus on specialties. LyondellBasell Industries is exiting refining so it can better home in on commodities. In April, the company said it would shutter its 100-year-old Houston refinery by the end of 2023. The refinery, part of LyondellBasell Industries since it spun off from Atlantic Richfield in 1989, has long been an issue for the company. It was a joint venture with the Venezuelan state oil company PDVSA for more than a decade before Lyondell bought out its partner for $2.1 billion in 2006. Company officials say they may repurpose the property for sustainability projects such as a plastics pyrolysis plant. Meanwhile, LyondellBasell has been steadily growing its commodity chemical business. It bought 50% stakes in ethylene complexes in the US and China. And according to newly surfaced government documents, it is considering building a high-density polyethylene plant in Corpus Christi, Texas.

17 Wanhua Chemical
2021 chemical sales: $22.6 billion

The Chinese polyurethane and petrochemical maker has been rocketing up the Global Top 50 because of its prodigious growth in recent years. And 2021 was another enormous year for Wanhua Chemical—its revenues nearly doubled from 2020. Ambitious capital expansion projects have helped fuel the growth. In Yantai, China, it opened an ethylene cracker and derivatives plants and revamped methylene diphenyl diisocyanate production. In April, the company announced it would spend $3.6 billion to build a chemical complex in Penglai, China. The project, to be completed in 2024, will feature a propane dehydrogenation unit as well as downstream plants for polypropylene, propylene oxide, and other chemicals. The company also started producing cathode materials and the biodegradable polymer poly(butylene adipate-co-terephthalate).

21 Covestro
2021 chemical sales: $18.8 billion

The polyurethane specialist Covestro unveiled a plan late last year to cut up to 1,700 jobs—about 10% of its workforce—by the end of 2023. Most of the cuts will be in Germany. At the same time, the company is resuscitating a plan to build a world-scale methylene diphenyl diisocyanate plant by 2026. While the previous plan pinpointed Texas as the site of the complex, Covestro now says it may build it in either the US or China. The company is also increasing capacity for another polyurethane raw material, toluene diisocyanate, in Dormagen, Germany. And with the biotechnology firm Genomatica, Covestro plans to make biobased hexamethylenediamine, used in the manufacture of polyurethanes and nylon 6,6.

Credit: Covestro

Covestro technician Mario Lopes works at the pilot plant where the company is producing biobased hexamethylenediamine.

23 Evonik Industries
2021 chemical sales: $17.7 billion

Evonik Industries is yet another major chemical maker planning a portfolio transformation. The German company intends to divest its performance material businesses by the end of 2023. These commodities, such as C₄ chemicals, isononyl alcohol, and superabsorbent polymers, generate about 20% of the firm’s sales. Evonik had been considering a sale of superabsorbents—used in diapers and similar applications—since late 2020. At the same time, the firm plans to invest $3.2 billion in sustainable businesses. Separately, in June, Evonik announced it would build a $220 million plant in Lafayette, Indiana, for lipids used in messenger RNA applications like COVID-19 vaccines. The company has been supplying this burgeoning market from facilities in Germany. Evonik is also building a plant to make rhamnolipids, a class of biobased surfactants, in Slovakia.

24 Shell
2021 chemical sales: $17.0 billion

Later this year, Shell will open an ethylene and polyethylene complex in Monaca, Pennsylvania. The facility was the only one among a wave of new US ethylene crackers to be situated far from the Gulf Coast. The project took a long time. It was announced a decade ago, and construction began in 2017. It may be Shell’s last conventional ethylene project for a while. The company is collaborating with Dow to electrify the steam cracking process. The partners recently started an experimental unit in Amsterdam to test designs that could replace current natural gas–fired cracker furnaces. They want to build a large pilot plant by 2025. And at a recent conference, Shell officials said the company is running feedstocks based on biomass and plastic pyrolysis oil through its ethylene complex in Norco, Louisiana. The company intends to process 180,000 metric tons (t) of the alternative feedstocks by 2023 and to ramp up use to 600,000 t in 3–5 years.

30 Indorama Ventures
2021 chemical sales: $14.6 billion

The Thai polyester maker Indorama Ventures made another big acquisition to diversify its business earlier this year when it bought the ethoxylated surfactant maker Oxiteno from the Brazilian conglomerate Ultrapar Participações for $1.3 billion. Oxiteno has about $1 billion in annual sales. In 2020, Indorama bought Huntsman’s US-based surfactant unit, its first big move into surfactants. Indorama, already a big mechanical recycler of polyethylene terephthalate (PET), is plunging into the chemical recycling of plastics. It plans to build a plant in Longlaville, France, that will depolymerize PET using an enzymatic process from the start-up Carbios. The facility will be close to an Indorama PET plant.

37 Arkema
2021 chemical sales: $11.3 billion

Over the past year, Arkema has placed a lot of emphasis on one of its core businesses, adhesives, as well as on an emerging business, battery materials. The French specialty chemical maker bought Ashland’s adhesives business in February for $1.65 billion. The business has $360 million in annual sales of water-based polyurethane wood glues and acrylic, pressure-sensitive adhesives for packaging labels and other applications. In 2015, Arkema bought the adhesives maker Bostik from Total for $2.2 billion. With Nippon Shokubai, Arkema is studying the feasibility of producing lithium bis(fluorosulfonyl)imide electrolyte salts, used in next-generation batteries, in France. Arkema’s goal is to have sales to the battery market of at least $1 billion per year by 2030. To that end, it is also expanding capacity for poly(vinylidene fluoride) in Pierre-Bénite, France. The polymer is used as a binder and separator material in lithium-ion batteries.

39 Hanwha Solutions
2021 chemical sales: $10.9 billion

In June, Hanwha Solutions detailed plans to reach net-zero carbon emissions by 2050. Some 70% of the carbon reduction at the South Korean chemical and solar material maker will come from using renewable energy. Replacing fossil fuels in its manufacturing processes with hydrogen will yield another 15%. The balance of cuts will come from better efficiency and carbon capture. The company is also making investments in sustainability. It helped lead a $21 million venture capital investment in Novoloop, a California-based start-up that is developing a technology to convert postconsumer polyethylene into thermoplastic polyurethanes and other chemicals.

49 Lanxess
2021 chemical sales: $8.9 billion

Lanxess is planning a likely exit from the polymer business. The German company and the private equity firm Advent International formed a joint venture to buy DSM’s engineering polymer business—a producer of high-end nylon resins—for $4.1 billion. Lanxess is contributing its own business, which makes polybutylene terephthalate and nylon 6, to the partnership. It will own an up to 40% stake in the joint venture for 3 years, after which it will have an option to sell. At the same time, Lanxess is growing in specialty chemicals. Earlier this month, it completed the purchase of International Flavors & Fragrances’ microbial control business for about $1.3 billion. The business, which once belonged to Dow, makes glutaraldehyde biocides and isothiazolinone-based antimicrobials and has $450 million in annual sales.

Credit: Lanxess

A worker at a Lanxess polymer plant in Gastonia, North Carolina. The plant will become part of a joint venture with Advent International.

https://cen.acs.org/business/finance/CENs-Global-Top-50-2022/100/i26