Friday, May 30, 2014

Chemical and Material Shortage Alert – May 2014

The purpose of this blog is to identify chemical and material shortages reported on the Internet.  The sources of the information reported here are primarily news releases issued on the Internet.  The issue period of the news releases is May, 2014.

Section I below lists those chemicals and materials that were on the previous Chemical and Material Shortage Alert list and continue to have news releases indicating they are in short supply. Click here to read the April 2014 Chemical and Material Shortage Alert list.

Section II lists the new chemicals and materials (not on the April alert).  Also provided is some explanation for the shortage and geographical information.  This blog attempts to list only actual shortage situations – those shortages that are being experienced during the period covered by the news releases.   Chemicals and materials identified in news releases as only being in danger of being in short supply status are not listed.

Section I.   Chemicals and materials that continue from April to be reported as in short supply are: construction materials, e.g., bricks, (United Kingdom); natural gas (Middle East).

Section II.   Shortages Reported in May not found on the Previous Month’s List

Herbicides:  Western Australia; supply not keeping up with demand.
Ilmenite: India; local mining not keeping up with demand.
Water:  Crimea; Ukraine restricting supply.
Urea:  India; government limiting availability of natural gas.
Iron Ore:  India; mining restrictions by government..

Reasons for Section II shortages can be broadly categorized as: 

1.  Mining not keeping up with demand: Ilmenite
2.  Production not keeping up with demand: none
3.  Government regulations: water; urea; iron ore
4.  Sources no longer available:  none
5.  Insufficient imports:  none
6.  Supply not keeping up with demand:  herbicides


Friday, May 23, 2014

Supply Chain Benchmarks for Chemical Companies

A 2013 PwC report (click here to read the report – PDF file) offers 2 benchmark metrics for chemical companies – inventory turns and percentage of time in which deliveries are on time and in full (OTIF).   The authors used earnings before interest and taxes (EBIT) as a percentage of sales (EBIT margins); revenue growth; inventory turns; and OTIF to group survey-responding companies into leaders or laggards with respect to the companies’ supply chain performance.  (OTIF and other information were obtained from a survey of 503 supply chain executives)

Included in the survey respondents were responses from approximately 75 chemical and process industry companies.  For these 75 companies, the PwC report shows the leader group had an average 17.3 inventory turns and the laggards 6.5.   For OTIF values, the report shows that leaders had on time, in full (OTIF) deliveries 97.5 % of the time versus 80.2% for laggards.  These metrics (inventory turns and OTIF percentages) for chemical and other processing companies can serve as excellent benchmarking goals for individual chemical companies.

Other survey respondents came from the automotive, industrial products, pharmaceutical, retail and consumer goods, technology and telecom sectors in addition to the chemical and other processing companies sector.  The survey obtained not only OTIF metrics but also responses on what companies believe work best and are most needed for good supply chain performance.   The report provides an analysis of these responses.


Wednesday, May 14, 2014

Using Patent Databases to Identify Chemical Companies’ Business Interests

Information associated with patents can be useful in determining the research, and therefore business interests, of chemical companies.   For example, using the European Patent Office (EPO)’s Espacenet (click here to go to Espacenet) search system, I was able to search for patents filed at the EPO to identify companies interested in a certain business. 

Using Espacenet, I searched for companies with recent interests (reflected by the patents they have filed) in converting sugars (or other carbohydrates) into ethylene (or other alkenes) using enzymes or catalysts.  I found recent patents (filed within the last 5 years) associated with the following 11 companies:  Bio Architecture Lab; Braskem; Codexis; Danisco (now part of DuPont); DSM; Genomatica; Invista Technologies; LS9 (now part of Renewable Energy Group); Novozymes; Shell Oil; and Sued Chemie (now part of Clariant).

This seems a fairly large number of companies filing recent patents on converting carbohydrates into alkenes.  However, given the profit-potential and policy implications of a feasible economic process for doing so, the large number is not surprising.  Using carbohydrates, rather than petroleum, as a source of chemical feed-stocks (e.g. ethylene) potentially offers large revenues as well as public policy benefits.

Filed patents is a good indicator of successful research that a company is producing, and likely related to a company’s business objectives.  Identifying companies, and researchers who can also be associated with the patent applications, should be useful in establishing alert and other information programs used to stay abreast of research and developments for those companies.

Using the European Patent Office’s Espacenet search system is relatively easy.  Please email me if I can be of assistance in your research and analysis needs.  The company list in this blog is not met to be an exhaustive list of companies interested in carbohydrate to alkene conversion using catalysts or enzymes, but only what might be found searching a patent database.


Friday, May 2, 2014

Some Oil Company Metrics

Data from recent (2013; 2012) annual reports of 40 of the largest oil companies in the world were reviewed and analyzed.  The oil companies represent 6 global regions (North America; South America; the Middle East; Africa; Europe; and Asia).

Some comments from the review and analysis of the data are:

1.  The average annual revenues of the 40 companies were 108 billion USD.  The revenue range was from $2 billion to $453 billion.  Each region has oil companies with revenues greater than the average.

2.  Gross profits (revenues from products less cost to produce those products) ranged from $812 million to $149 billion, with the average being $27 billion.

3.  The gross profit margin percentage (gross profit as a percentage of revenue) ranged from 3% to more than 65% with the average being 30%.  All regions had oil companies exceeding the average gross profit margin percentage.

4.  The number of employees at the companies ranged from a few thousand to more than a hundred thousand with the average being 52,000.  The average sales revenue per employee was $3.4 million.

These financial metrics are very high for any industrial sector, showing that the petroleum (oil) sector does very well on average.   Also, companies exceeding these metric averages were found in all 6 regions (identified above) showing that no particular area prevents an oil company’s economic success.


Please email me if you would like more details on the above and further research and analysis.

Thursday, May 1, 2014

Chemical and Material Shortage Alerts – April 2014

The purpose of this blog is to identify chemical and material shortages reported on the Internet.  The sources of the information reported here are primarily news releases issued on the Internet.  The issue period of the news releases is April, 2014.

Section I below lists those chemicals and materials that were on previous Chemical and Material Shortage Alerts lists and continue to have news releases indicating they are in short supply. Click here to read the March 2014 Chemical and Material Shortage Alerts list.

Section II lists the new chemicals and materials (not on the March alert).  Also provided is some explanation for the shortage and geographical information.  This blog attempts to list only actual shortage situations – those shortages that are being experienced during the period covered by the news releases.   Chemicals and materials identified in news releases as only being in danger of being in short supply status are not listed.

Section I.   Chemicals and materials that continue from March to be reported as in short supply are: construction materials, e.g., bricks; (United Kingdom). 

Section II.   Shortages Reported in April not found on the Previous Month’s List

Steel:  Chicago; supply not keeping up with demand.
Coconut/Copra: India; supply not keeping up with demand.
Natural Gas:  Middle East; supply not keeping up with demand.
Asphalt:  Mexico; supply not keeping up with demand.

Reasons for Section II shortages can be broadly categorized as: 

1.  Mining not keeping up with demand: none
2.  Production not keeping up with demand: steel; coconut/copra; natural gas; asphalt
3.  Government regulations: none
4.  Sources no longer available: none
5.  Insufficient imports:  none

6.  Supply not keeping up with demand:  none