Friday, April 18, 2014

Gross Profit Margin Percentages for South Korean versus US Chemical Companies

Recent gross profit margin percentages (GPM %) for 14 large and mid-size South Korean chemical companies have been computed to be on average 17%.   2012 sales for these companies ranged from approximately 575 million to 36 billion US dollars.  The gross profit and revenue amounts used to determine the 17 GPM % average were obtained from the companies’ websites.   The South Korean chemical companies are all listed on the Koran Stock Exchange as chemical companies.   Click here to go to the Korean Stock Exchange website and to find stocks listed as chemical companies.

The 17% GPM % is low when compared to an average GPM % for US chemical companies.  For example, in a blog I wrote in December 2013, I indicated that a recent average GPM % for 27 US companies (small, mid-size, and large) is 28%.  Click here to read this December 2013 blog.  If correct, such a large difference in GPM % between South Korean and US chemical companies suggest that on average US chemical companies are much more profitable.

An explanation for the large GPM % difference might be that the costs of raw materials from which chemical products are produced are much higher in South Korea.  This is consistent with South Korea’s lack of chemical product-related natural resources.  Another reason might be South Korean chemical companies are not able to demand higher prices from their customers.

Tuesday, April 15, 2014

A Benchmark for a Country’s Chemical Industry Productivity

A European Chemical Industry Council (CEFIC) report (click here to go to the report – PDF file) gives total 2011 chemical sales for several countries.  These total sales apparently represent an estimated total revenue amount that products produced by the country’s chemical industry generated in 2011.

Using the data in the CEFIC report (and for a few countries, data from other sources), a chemical products sales amount per person amount was computed using 2011 country population data. World Bank 2011 population data was used.  Click here to see this data.

The computed results were then used to generate the graph shown below.

So, what might the chemical sales per person for a country show?  Perhaps one demonstration is a comparison of the “robustness” of a country’s chemical industry productivity.

Also, the chemical products sales per person amount can be used as a benchmark for improvement.  For example, if by 2015, India has a $288 per person amount, a conclusion would be that India’s chemical industry has made progress in becoming more productive.