Chemical Manufacturing Industry Profile

Companies in this industry manufacture basic, intermediate, and specialty chemicals. Major companies include BASF (Germany), Dow and DuPont (US), Roche (Switzerland), Mitsubishi Chemical (Japan), INEOS Group (UK), and LyondellBasell (the Netherlands).

The global chemical manufacturing industry generates about $5 trillion in annual revenue. China, the US, Japan, and Germany produce the most chemicals and also are among the largest importers of chemicals. Countries in Asia (China, Thailand, India), the Middle East (Saudi Arabia), Eastern Europe (Russia), and South America (Brazil) are being targeted for industry growth.

The US chemical manufacturing industry includes about 10,000 companies with combined annual revenue of about $780 billion and is expected to grow slowly in the next two years. Key growth drivers include manufacturing output and consumer spending.

COMPETITIVE LANDSCAPE

Because chemicals are used to make a wide variety of industrial and consumer products, demand is driven by the overall health of the US economy. The profitability of individual companies is closely tied to efficient operations. Big companies have large economies of scale in production. Small companies can compete effectively by producing specialty products, of which there are a large number, or by operating a single plant highly efficiently. The industry is concentrated: the top 50 companies account for about 55 percent of revenue.

Because they often have a high value-to-weight ratio, many chemicals are traded internationally, and many US manufacturers have production plants overseas. The largest sources ...