Basic Chemical Manufacturers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 1,200 basic chemical manufacturers in the US produce commodity chemicals that act as raw materials in or catalysts for the production of more refined chemicals. Products include petrochemicals, industrial gases, synthetic dyes and pigments, inorganic chemicals, and organic chemicals.
Price-based Competition
The basic chemical industry is highly competitive, and products are generally considered commodities.
Capital Intensity
Basic chemical manufacturing is capital-intensive and generally requires large investments in property, facilities, and equipment.
Industry size & Structure
A typical basic chemical manufacturer employs about 118 workers and generates about $163 million annually.
- The basic chemical manufacturing industry consists of about 1,200 companies that employ 149,500 workers and generate $206 billion annually.
- The industry is concentrated with the 20 largest firms accounting for 52% of industry revenue.
- Large companies include BASF, Linde-Praxair, LyondellBasell, and Air Products.
- Some large companies, such as Dow Chemical and DuPont, produce basic chemicals in addition to a number of other products, including specialty chemicals and other downstream products.
Industry Forecast
Basic Chemical Manufacturers Industry Growth
Recent Developments
Mar 20, 2023 - EPA Proposes Limits on PFAS in Drinking Water
- The Environmental Protection Agency in March proposed the first federal limits on “forever chemicals” in public drinking water, The Wall Street Journal reports. The agency is proposing maximum allowable levels for two compounds in a class of widely used chemicals known as perfluoroalkyl and polyfluoroalkyl, or PFAS – called “forever chemicals” because they persist in the environment. In its new proposed rule, the EPA set a limit for two types of PFAS of 4 parts per trillion each in public drinking-water systems. EPA also said it would regulate four other PFAS chemicals by requiring treatment if the combined level reaches a certain concentration. If enacted, the rule would likely fuel fights over who will bear the cost for water treatment systems. Thousands of lawsuits to recover costs for cleanups and filtration are pending against companies that manufactured or used PFAS in their products.
- The chemical industry is exploring ways it can help avoid future public health and environmental disasters like the one caused by the February derailment of a Norfolk Southern train in Ohio, according to a March article in Chemical Processing (CP). Proposed solutions include closer oversight of logistics partners’ safety practices -- including auditing providers and their vehicles to ensure they meet safety requirements -- and new supply chain strategies that minimize shipping distances for hazardous materials, CP reports. Chemical suppliers also should know the maintenance practices of their logistics partners and be familiar with key safety features on the vehicle, such as a train’s braking system, to understand whether it can handle an emergency situation. Moreover, transportation companies also must understand the unique characteristics of the chemicals they’re carrying and their reactive properties while in transit.
- The February derailment of a Norfolk Southern train carrying toxic chemicals is likely to place renewed focus on rail safety, The Wall Street Journal reports. Vinyl chloride, butyl acrylate, ethylhexyl acrylate, and ethylene glycol monobutyl ether are known to have been released to the air, soil, and waters at the accident site in Ohio, according to the EPA. Chemical manufacturers rely heavily on rail for transporting products with freight railroads originating 2.2 million carloads of plastics, fertilizers and other chemicals in 2021, according to the Association of American Railroads. The chemical industry already was unhappy with the service provided by the nation's railroads prior to the accident, citing a lack of railcar availability and embargoes, among other issues. A spokesman for the American Chemistry Council said it’s too early to know what impact the derailment may have on the industry moving forward.
- Demand for synthetic fertilizer would be reduced, but not eliminated, by a shift to regenerative agriculture, according to Noble Research Institute (NRI). According to a recent report “Scaling Regenerative Farming: An Action Plan” from the Sustainable Markets Initiative Agribusiness Task Force, regenerative farming on 40% of the world’s cropland would save around 600 million tons of emissions, around 2% of the total. To limit climate change to 1.5 degrees, however, it must be scaled faster, and move from covering around 15 % of global cropland today to 40 % by 2030. One of the most promising aspects of regenerative agriculture, says NRI, is that diverse, active soil biology can replace fertilizers and supply adequate plant nutrition to growing forages in well managed, regenerative pastures and crop fields. Fertilizer use in regenerative farming is acceptable as long as it’s balanced with how it impacts the soil biology and production goals.
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