Friday, March 27, 2015

Natural Gas to Gasoline GPM% Compared to Crude Oil to Gasoline/Diesel GPM% Data



The graph above was created based on US Energy Information Administration (EIA) crude oil, gasoline/diesel, and natural gas price data from January 2001 to December 2014.  (Click here, here, and here to find this data.)   Based on this EIA data and assumptions about the quantities of gasoline and diesel that are obtained from crude oil and natural gas, gross profit margin percentages (GPM%) were computed for gasoline/diesel sales from crude oil and gasoline sales from natural gas.

The resulting monthly GPM% results for both crude oil to gasoline/diesel and natural gas to gasoline were then used to create the graph.  The X-axis is the range of crude oil prices, per barrel, over the period January 2001 to December 2014 (sorted from lowest to highest).  And the Y-axis is GPM% values.   The blue line shows the monthly GPM% of selling gasoline and diesel produced from crude oil against monthly Brent crude oil prices.   The red line shows the monthly GPM% for selling gasoline produced from natural gas against various crude oil prices.

Based on EIA information, 12 gallons of diesel and 19 gallons of gasoline are obtained (on average in 2013) from 1 barrel of crude oil.  Using this output quantity and EIA per gallon market prices, a total sales price for the diesel and gasoline produced from one barrel of Brent crude oil was computed for each month.  The cost of material sold is the Brent monthly market price.  From these values, a monthly gross profit and GPM% were computed and plotted against monthly Brent crude oil prices per barrel (shown by the blue line on the graph).

From several sources found on the Internet, an estimated 5 gallons of gasoline can be obtained from each thousand cubic feet of natural gas.  And, from EIA monthly data for the industrial delivery price of natural gas and the monthly gasoline market prices, monthly GPM% were computed and plotted against the monthly Brent crude oil prices per barrel (shown by the red line on the graph).

No other costs were considered in computing the GPM%; other than the cost of the input material (crude oil and industrially-delivered natural gas) – costs obtained from the EIA.  Therefore the GPM% is only for sales prices less cost of raw material.  

The graph indicates that as the price per barrel of Brent crude oil increases, an increasing GPM% divergence clearly shows in favor of the natural gas to gasoline conversion compared to the crude oil to gasoline/diesel conversion.  This begins to happen in the $65 to $70/barrel range.

This divergence is consistent with what seems to be an increased commercial interest in recent years with gas to liquid conversion processes.

Saturday, March 21, 2015

Some Animal Feed Additive Statistics

An extensive search of the Internet found that in the 2012 to 2013 time period, approximately $14 to $15 billion is the likely amount globally spent on animal feed additives.  The following table identifies most, if not all, of the major additive types, with estimated percentages (estimates found during the Internet search) spent on those types in the 2012 to 2013 time frame:
animal feed type
sales percentage  for the type
total recent sales  usd  (millions)
amino acids
32%
4,900
antibiotics
27%
4,200
other
16%
2,500
vitamins
9%
1,400
acidifiers
8%
1,200
enzymes
5%
730
minerals
3%
400
antioxidants
1%
170
100%
15,500


Compounded average growth rates of amounts spent per year on the animal feed additives are expected to be about 2% to 4% through 2019/2020.  Increasing uses of feed additives aid needed increases in the industrial production of meat.    Such increased production is the only way to meet the growing global demand for meat.  Feed additives also help to decrease environmental impacts of animal wastes and increase process safety and meat quality.  The additives can enhance weigh gain rates, prevent/control infectious diseases, and help to ensure healthy animals.

Chemcial companies (and chemical-liked companies) provide the major proportion of the animal feed additives.  Some of the publicly-traded companies that do so are identified in the following table, along with some financial data:

revenues (usd)   (millions)
gross   profit  (millions)
gpm%
operating  income (usd)  (millions)
operating income %
products
Balchem
238.5


34.1
14%
vitamins
CJ Corporation
246.0


11.4
5%
amino acids
DSM
2,471.0




vitamins  carotenoids  enzymes  minerals
Elanco
2,346.6
564.2
24%


antibiotics  growth enhancers
Evonik
2,570.0




amino acids
Novozymes
281.4




enzymes
Nutreco
2,300.0


161.0
7%
amino acids  vitamins  minerals  emulsifiers  anti-oxidants  digestive enhansers
Phibro
653.2
178.9
27%
56.7
9%
antibacterials  nutritional products  minerals
Zoetis
479.0




medicated feed additives


average
26%
average
9%




The financial data presented in the above table are found in annual reports published by the publicly-traded companies.  This data is available because the companies have only an animal feed additive business or have a segment doing substantial animal feed business and therefore this requires providing data on the business segment in the reports.  Absent amounts in the table indicate that no data is provided in the reports.  For example, in some cases a segment may include businesses other than animal feed additives, and in such cases, although revenues are provided for each business, only the total operating income for the segment is provided.

The average gross profit margin percentages (gpm%) and operating income percentages, shown in the table, seem to me to be fairly good results, but not outstanding, for a business. 

Other publicly-traded companies that have animal feed businesses but are not segment businesses and do not report financial results on the animal feed business include: Ajinomto; BASF; Biovet; Chr. Hansen; Church & Dwight; Darling Ingredients; Dow; DuPont; Mosaic; and Novus (part of Mitsui).  Private companies that have substantial animal feed businesses include: Addcon; Alltech; Adisseo; Chareon Pokphand; China Bluestar (part of ChemChina); Kemin; and Lallemand.


Even though a lot of companies are in the animal feed additive business, I found that available financial results for this business are difficult to find.

Tuesday, March 10, 2015

Gross Profit Percentages for Some of Turkey’s Chemcial Companies

Using three sectors (chemicals, petroleum, rubber and plastic products; chemicals; and other chemical products) on the Turkey Stock Exchange (click here), recent revenue and gross profit data were found for 13 chemical companies. 

Presented below are the names of the 13 companies, product/sector information, and recent sales (revenue) and gross profit amounts in US dollars (Turkish Lire amounts were converted to usd using 1 usd = 1.874 Turkish Lire exchange rate).   Also shown are the gross profit margin percentages (gpm%) for the revenue (sales) and gross profit data.


company
products
sector
sales usd (millions)
gross profit usd (millions)
gpm%
Petkim
petrochemicals
petrochemical
2,205
50
2%
Gubretas
fertilizer
fertilizer
1,227
311
25%
Aksa
carbon fiber
fiber
923
168
18%
Brisa
tires
rubber
800
209
26%
Soda Sanayil
soda ash
chemicals
747
154
21%
Sasa
polyester
fiber
582
38
7%
Dyo Boya
paint
paint
304
105
35%
Pakpen Plastik
plastic
plastic
229
37
16%
Bagfas
fertilizer
fertilizer
176
28
16%
Ege Plast
pipes
plastic
169
47
28%
Alkim Alkali
sodium sulfate
chemicals
121
29
24%
Ege Guebre
fertilizer
fertilizer
106
22
21%
Berkosan
packaging
plastic
13
2
15%
total sales $7.6 billion
average gpm%
20%



The average gross profit margin percentage (20%) of the 13 Turkey chemical-related public companies is lower than the typical US chemical company gpm%.  A US company gpm% average was computed as 28%.  Click here to go to US company data.   On the other hand, the Turkey companies’ gpm% average is higher than a gpm% average computed for 14 South Korean public companies, which is 17%.  Click here to go to the South Korean data.

The US chemical companies’ gpm% may be higher because more of their products encompass unique attributes versus products with more basic attributes being sold by Turkish and South Korean companies. 

Estimates for recent chemical sales by Turkey’s chemical companies are between $40 and $45 billion.  Chemical sales growth in recent years has been estimated to be about 8 to 10 % per year.  Around 4,000 companies are believe to sell chemicals, with most of these small (less than 150 employees) and private.  For example, only 13 companies, identified above, could be found listed on the Turkey Stock Exchange.  These 13 companies account for about 18% of the $40 to $45 billion in sales ($7.6 billion/$42.5 billion).

The major chemical sectors are: paints and coatings; fertilizers; detergents, cosmetics, and personal care; plastics; rubber; and inorganic chemicals.  Turkey has large sources of soda ash, chromium, sodium sulfate, and boron.

Turkey has an excellent geographical position as an exporting country, located between Europe, the Middle East, North Africa, and Central Asia with good ports on the Mediterranean and Black Seas.  Turkey chemical exports are significant, about half of its production of $40 to $45 billion, and have been increasing at a good rate.  For more on Turkey’s chemical production and exports, click here to read another of my posts.


Wednesday, March 4, 2015

Chemical and Material Shortage Alert – February 2015

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 February 2015.

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 January 2015 Chemical and Material Shortage Alert list.

Section II lists the new chemicals and materials (not on the January 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.   None

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

Polyethylene:   Middle East; production 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: polyethylene
3.  Government regulations: none
4.  Sources no longer available: none
5.  Insufficient imports:  none
6.  Supply not keeping up with demand:  none