For the eighth straight year, BASF, the German-based chemical producer, led the IHS ChemicalWeek ‘Billion-Dollar Club’ annual sales ranking of global chemical companies by registering US$81.5 in total sales for 2013.; followed by Sinopec (China) and Sabic (Saudi Arabia) to the second and third positions, respectively. The rapid ascension of the Chinese and Middle East firm in the IHS ChemicalWeek rankings, indicates a major leadership change in the global chemical industry once dominated by US, European and Japanese firms; and that they are no longer emerging companies, but industry leaders who will continue to reshape industry as they further expand on their competitive advantages enabled by scale, feedstock or market positions, according to IHS, the leading global source of critical information and insight, and the publisher of IHS ChemicalWeek.

IHS said that Sinopec had US$72.3 billion in sales in 2013, followed by Sabic at US$60.7 billion; ExxonMobil with US$59.3 billion, and Dow Chemical at US$57.1 billion in sales to round out the top five positions on the IHS ChemicalWeek list. IHS added that in 2000, both Sinopec and Sabic each had roughly US$7 billion in chemical revenue and have scaled that by approximately ten-fold in less than 15 year; and further forecasting that either Sinopec and Sabic will be outpacing the top earners like BASF, within the next few years, given that Sabic has the feedstock advantages, while Sinopec has the market advantages that make them formidable competitors.”

Moreover, this year, noted the IHS ChemicalWeek report, capital spending surged in basic and industrial chemical companies as the shale gale sparked a wave of projects, with the average capital expenditure for ranked companies (of those listed companies that reported a cost breakdown of chemical CAPEX costs) up about 1% year-on-year to US$814 million. Innovation expenses also grew 8% year-on-year as research and development costs increased to an average of more than US$350 million.

In 2013, industry continued to capitalise on the competitive advantages enabled by shale gas development, announcing a wave of projects to build chemical capacity in North America. Fourteen crackers have been announced in the last five years. Meanwhile, Europe’s growth in the chemical sector is stagnant, with industry association Cefic having recently adjusted its forecast for chemical output down to just 1.5% growth for 2014, from an earlier 2% estimate, said IHS.