In 2005, the global chemical industry experienced sustained growth, with strong earnings and rising prices across the sector. However, this progress was challenged by high crude oil and natural gas prices, as well as the impact of two major hurricanes in the U.S., which significantly disrupted operations, especially within the American chemical market.
According to a recent report from *Chemical Engineering News*, the profitability of global chemical companies continued its upward trend from 2004. In the first quarter of 2005, profits surged, with 24 surveyed companies reporting a 55% increase compared to the same period the previous year. Total sales reached $39.3 billion, while net profits hit $4 billion.
The rising cost of raw materials, combined with the aftermath of the hurricanes, led to sharp price increases for basic chemicals in the U.S. Prices rose by an average of 6.8% in September and 3.8% in October. Despite these challenges, the industry remained profitable, though growth slowed to its lowest level since 2003. The 24 companies in the survey still saw a 22.9% increase in profits compared to 2004, reaching $2.5 billion.
The American Chemical Council (ACC) reported that chemical production in 2005 would grow slightly by 0.5%, following a 3.1% increase in 2004. Basic chemicals were hit hardest, with an estimated 4.7% decline. Meanwhile, specialty chemicals and pharmaceuticals continued to show strong growth. The U.S. chemical industry was expected to grow by 2.7% in 2006, with plastic resins leading the way at a projected 4.9% growth.
Mergers and acquisitions remained active throughout 2005. According to Y&P, a New York-based investment bank, global M&A activity in the first three quarters of 2005 was stable, with annual deals remaining at a normal level. It was expected that the total value of transactions would decrease by 15% to 20% from the previous year, reaching around $25 billion. For 2006, M&A activity was expected to remain consistent with 2005 levels.
Notably, most chemical M&A deals in the first three quarters focused on basic chemicals. Ineos, a relatively new player, acquired BP’s olefins and derivatives business for $9 billion, becoming the sixth-largest chemical company globally. Access Industries also made a significant move by purchasing Basel, a joint venture between BASF and Shell, for $5.4 billion. Basel is the world's largest polypropylene producer and a key player in polyethylene and catalysts.
Europe remained the dominant region for chemical M&A, accounting for 41% of global deals in the first three quarters of 2005. The U.S. share dropped from 37% to 26%, while Asia and other regions saw a significant rise, increasing from 14% to 33%.
Asia, particularly China, became a major investment hotspot. With a large population, abundant resources, and rapid economic development, the region showed huge potential for chemical consumption. Several major petrochemical projects were completed in 2005, including Shanghai SECCO ethylene and Nanjing Yangba, as well as the BP-Sinopec joint venture. The Shell/CNOOC project, valued at $4.3 billion, was set to be completed by the end of the year. DuPont planned to invest $1 billion in a titanium dioxide plant in Dongying, while Wacker and Dow Corning announced a joint silicone factory in Shanghai.
Meanwhile, the Middle East, with its vast oil and gas reserves, attracted significant investment. Over the next decade, ethylene production capacity in the region is expected to double to 30 million tons per year, while propylene capacity will triple to 7 million tons. Borealis and Abu Dhabi National Oil Company are planning a $2.5 billion petrochemical project, scheduled for completion in 2010. Saudi companies are also investing heavily, with plans to build a comprehensive petrochemical plant by 2008 and an ethylene cracker by 2012.
Automatic High Pressure Cleaning Machine
Automatic High Pressure Cleaning Machine,No Contact Car Washing Equipment,Contactless Car Washing Equipment,Tunnel Car Washing Equipment
Xuzhou kushuilong Machinery Equipment Co., Ltd , https://www.kslcarwash.com