Billion-Dollar Club: Industry muddles through a down year

Sales for the chemical industry’s top companies declined year over year in 2023, as destocking and soft demand took a toll. The top of the leaderboard was, again, relatively stable.

For the fourth consecutive year, BASF SE topped Chemical Week by S&P Global’s Billion-Dollar Club ranking of the chemical industry’s top companies by revenue. BASF has topped the ranking seven times in the past ten years, being knocked off its perch only by the short-lived DowDuPont in 2017 and 2018, and by China Petrochemical Corp. (Sinopec) in 2014.

BASF retained the top spot despite seeing a 19% decline in sales from 2023 to 2022. This mirrored trends across the industry. Among the top 10 companies in this year’s Billion-Dollar Club, just one – China’s Rongsheng Petrochemical Co. Ltd. – saw a year on year sales increase in 2023.

In general, the industry’s leaderboard was stable. The top five was, once again BASF, Sinopec, China National Chemical Corp. (ChemChina), Formosa Plastics Group and Dow Inc., with Dow and Formosa Plastics simply switching places from last year’s ranking. LyondellBasell Industries N.V., Saudi Basic Industries Corporation (Sabic), ExxonMobil Corporation and Ineos Group Ltd. were also among the top 10 companies in the ranking for the year. Most of these companies ranked somewhere in the top 10 two years ago, as well.

Beyond the top 10, there was also substantial stability. Nutrien Ltd. fell four spots in the ranking as the boost to fertilizer markets in 2022 from the Russia-Ukraine war and stronger agricultural demand faded in 2023. Linde AG, L’Air Liquide SA, Mitsubishi Chemical Corp., Hengli Petrochemical Co. Wanhua Chemical Group Co. Ltd., Bayer AG, LG Chem Ltd. and The Sherwin-Williams Company all ranked in the top 20 in this year’s ranking and last year’s ranking.

Some firms did move up or down significantly. Chinese petchem producers such as Rongsheng and Shanghai Petrochemical Co. as China’s economy continued to recover from shutdown-related shocks, albeit at a slower pace than many had anticipated. PPG Industries Inc. and Ecolab Inc. moved up nine spots and six spots, respectively – with PPG cracking the top 20 – simply due to growing sales modestly while many companies posted declines. Fertilizer producers such as Nutrien, Yara International, and The Mosaic Company generally moved down several spots or more as fertilizer prices came down to earth after inflating significantly in 2022.

The chemical industry broadly saw declining revenues in 2023. Among the 104 companies in this year’s edition of CW’s billion-dollar club, median revenues fell by about 10% year over year. This compares with an 11% median revenue increase in 2022.

A look at the composition of the ranking tells a story of declining sales. The median Billion-Dollar Club company generated about $9.20 billion in revenue in 2023, compared with about $9.71 billion in 2022.

Profits also fared poorly in 2023. The median Billion-Dollar Club company saw operating income fall by about 25%, compared with a median decrease of 2% in the year prior. The median profit figure stood at $580 million. Some 26 companies reported year on year increases in operating income, slightly more than the comparable figure for sales.

Bright spots for chemical producers in 2023 were few and far between. Diversified and commodity chemical producers, specialty chemical producers, and companies in the agchems and industrial gases sectors all mostly reported year on year revenue declines last year. Some specialties and industrial gases producers saw revenues hold up reasonably well, but few firms outside of China reported big sales increases. Sectors that saw boom times in 2022, such as fertilizers and lithium chemicals, generally saw those booms decisively end in 2023 as market prices deflated. These sectors have continued to be challenged this year.

The figures in CW’s Billion-Dollar Club are based on company reports and data pulled from S&P Capital IQ. Figures may not line up perfectly with last year’s Billion-Dollar Club because of differences in the data set. These differences may occur as a result of changes in corporate reporting practices; data collection; corporate restructuring; mergers, acquisitions and divestitures; currency impacts; and the exclusion of firms that fell off the ranking in either 2022 or 2023.

Several companies with substantial chemical operations do not publicly report chemical revenues. These include Koch Industries, Inc., TotalEnergies SE, PetroChina Co. Ltd. and Reliance Industries Ltd. Some of these companies did not respond to CW’s requests for information. There may be some changes in data access from year to year.

Please check out the full report here: Billion-Dollar Club: Industry muddles through a down year.