Several Chemical Companies Interested in Mass Balance Accounting

An internet search and examination of company annual reports identified the following chemical companies that are interested in using mass balance accounting: 

• BASF
• Celanese
• Chevron Phillips
• Clariant
• DSM
• Eastman
• LyondellBasell
• Perstorp
• Schill Seilacher
• Trinseo
• Wacker 

The term mass balance accounting refers to the process of using amounts of  “biomass/recycled” raw materials along with fossil-based raw materials as starting products for producing the compounds needed (e.g., low-chain carbon compounds) for making other chemicals used in producing finished products.  The greater the amount of the “biomass/recycled” raw materials used, the greater the overall reduction in carbon dioxide emissions. 

If ten percent of the starting raw materials is “biomass/recycled”, and not fossil-based, then ten percent of the finished product can be considered to be “green” and the company can market that ten percent as  “green”, a market which is increasing and represents a path to badly-needed reductions of carbon dioxide emissions.  Click here to read an Ellen MacArthur Foundation report on mass balance accounting. 

The number of chemical companies in the list above, as well as what is in the MacArthur Foundation report and information found at American and European chemical industry trade associations, suggest that mass balance accounting is being viewed by chemical companies as an important process for reducing carbon dioxide emissions and one that chemical companies could enthusiastically support.

 

 

 

 

 

 

 

 

Lists of Publicly-Traded Chemical Companies

1.                  The Global Industry Classification Standard (GICS)  (click here) identifies a few hundred publicly-traded chemical companies.  Companies on the list represent several countries.  GICS divides these chemical companies into 5 sub-categories: commodity chemicals; diversified chemicals; fertilizers & agriculture; industrial gases; and specialty chemicals. 

The GICS is provided by MSCI and S&P Dow Jones by subscription to financial institutions, such as Fidelity Investments and Charles Schwab, and other enterprises.  Access to the GICS database, where the chemical companies can be identified, can be through companies like Fidelity Investments and Charles Schwab. 

2.                  WSI/Markets (click here) has a list of more than 1,000 publicly-traded chemical companies.  Company profiles are available. 

3.                  The American Chemical Society’s Chemical and Engineering News magazine publishes annually a list of the 50 largest global chemical companies by revenues (click here).

 

 

 

 

 

Businesses Based on Graphene – the United Kingdom Experience

Since the discovery of graphene in 2003/2004 at England’s University of Manchester and the awarding of a Nobel Prize in 2010 to the researchers making that discovery, the British government has allocated significant funding to research in hopes of developing businesses based on graphene. 

Unfortunately, little business has evolved in the UK based on graphene.  A few companies have concentrated on graphene production (e.g., Applied Graphene Materials and Thomas Swan) and apparently been successful in their efforts, but demand for graphene seems to be underwhelming for the production capacity obtained.  

This insufficient demand would be based on a lack of products needing graphene.  A few products have been developed by British companies (e.g., Haydale’s graphene face masks, graphene-enhanced carbon fiber prepregs, and printing inks with graphene and Graphene Composites’ armor shields) but demand for these products seem much less than the available supply. 

So it seems to me that the supply/demand equation is preventing robust businesses that the British government was hoping for.  This is unlikely to change until a market disruptive application (with sufficient graphene demand) is found.  Graphene is unanimously viewed as  a material with awesome properties, but I do not think this is enough for disrupting markets until an application can be found that is commercially disruptive.

 

  

Intermediates Businesses in Several Global Chemical Companies

In a previous blog, I showed the reporting segment names used by 38 global chemical companies.  (Click here to see that blog.)   Eight of the 38 companies have intermediates in one of their reporting segment or division names (Arkema, BASF, Celanese, Dow, Eastman, Evonik, Lanxess, and Lyondellbasell).   

In this blog, I provide brief descriptions in the table below on those eight companies’ (Arkema, BASF, Celanese, Dow, Eastman, Evonik, Lanxess, and Lyondellbasell) intermediates-related businesses.  I also reviewed the annual reports of the other 30 companies as to what intermediate-related businesses they have, even though they have no reporting business segments or divisions with intermediates in the name.  The other companies that indicate intermediate-related businesses are also presented in the table below, along with brief descriptions of their intermediate-related businesses based on my review of the companies’ annual reports.  Altogether, 15 of the 38 companies indicate energy-related businesses, and 23 of the 38 companies report no intermediate-related businesses and are not listed in the table below.

  

company	intermediates businesses
albemarle	lithium compounds as intermediates in pharmaceutical manufacturing
arkema	has intermediates reporting segment	amino acids
basf	one of 11 divisions named intermediates	poly THF used in making textile fibers	butanediol; amines; neopentyl glycol; formic and propionic acid	vinyl monomers; acid chlorides; chlor formates; adipic acid	for use in manufacturing coatings; plastics; fibers; pharmaceuticals; and crop protection chemicals
celanese	has a division named intermediates	acetyl products; acetic acid; vinyl acetate monomers; acetic anhydride	acetyl aldehyde; ethyl acetate; formaldehyde; butyl acetate	for use in manufacturing paints; coatings; adhesives; lubricants; pharmaceuticals; films ; textiles; inks
chemours	intermediates are a principal product	glycolic acid; free radical initiators; substituted nitrile compounds
dow	one of divisions named industrial intermediates	ethylene oxide and propylene oxide derivatives	glycols; amines; silicone materials
eastman	has intermediates reporting segment	acetyls; oxo alcohols; alkylamines; olefin-based intermediates
evonik	has intermediates reporting segment	alkoxides; amino acids; isononaol	intermediates for plastics, rubber, superabsorbent industries
fmc	makes intermediates for internal use
lanxess	has intermediates reporting segment	for automobile, agricultural, construction, aroma/flavors, rubber, and electronics industries
lyondellbasell	has intermediates reporting segment	styrene monomer, acetyls, ethylene oxide, and ethylene glycol
mitsubishi	pharmaceutical intermediates
olin	chlorinated carbon intermediates	silicones, cellulosic, epoxy intermediates, allyls
shin-etsu	silicon monomers
solvay	soda ash, peroxides

  

I believe the following are some interesting conclusions based on the information above and found in the company annual reports: 

• The intermediate businesses are not considered to be high-margin businesses. 
• The intermediate businesses are considered to be mature, steady, cash-flow businesses. 
• The intermediate businesses are often based on long-term customers and arrangements with those customers. 
• A difference in strategy exists in pursuing these businesses.  For example, some companies, such as Chemours, consider their intermediates business to be a principal business, while other companies, such as Arkema, are trying to exit intermediates.  One chemical company, not on the table above, Huntsman, has recently sold its intermediates business. 
• Some companies, such as BASF and FMC, depend on their intermediate businesses to produce intermediates used internally to make higher-margin products.

Energy-Related Businesses in Several Global Chemical Companies

In a previous blog, I showed the reporting segment names used by 38 global chemical companies.  (Click here to see that blog.)   Two of the 38 companies have energy in one of their reporting segments names (Sumitomo and Umicore).   

In this blog, I provide brief descriptions in the table below on those two companies’ (Sumitomo and Umicore) energy-related businesses.  I also reviewed the annual reports of the other 36 companies as to what energy-related businesses they have, even though they have no reporting business segments with energy in the name.  The other companies that indicate energy-related businesses are also presented in the table below, along with brief descriptions of their energy-related businesses based on my review of the companies’ annual reports.  Altogether, 21 of the 38 companies indicate energy-related businesses, and 17 of the 38 companies report no energy-related businesses and are not listed in the table below. 

 

company	energy-related businesses
air products	gasses for refineries	gasses for energy producers
akzo nobel	coatings for wind turbines
albemarle	lithium for batteries	catalysts for petroleum refining
arkema	materials for batteries	additives for reducing energy needed for asphalt	chemistries to improve photovoltaic cells	polymer recycling	insulation materials	improved agents to reduce tire friction
asahi kasei	battery materials
basf	performance chemicals used in refining	performance chemicals used in gas extraction
celanese	products used in energy storage
clariant	catalysts used in hydrogen production by renewable energy	converting agricultural residues to biofuels
covestro	additives for improving insulating forms
dow	chemicals for improving energy exploration, recovery	chemicals for refining
evonik	improving renewable energy generation
huntsman	improved insulating materials
linde	gases for energy production
mitsubishi	battery materials
nitto denko	materials for wind energy generation	filtration technologies for oil drilling
olin	epoxy products for wind energy systems
shin-etsu	battery materials
sumitomo	energy and functional materials is a reporting segment	battery materials
toray	battery materials	carbon fibers for wind turbines
umicore	energy technologies is a reporting segment	battery materials	fuel cell technologies
wacker	silicon-based products for solar industry

 

I believe the following are some interesting conclusions based on the information above: 

• Many global chemical companies recognize that energy generation, storage, efficiencies, and other energy-related activities represent business opportunities for their company skills and technologies. 
• Many of the businesses identified in the table above are non-fossil fuel, renewable energy-related business pursuits.   This suggests that chemical companies are likely to make important contributions to global renewable energy goals. 
• Many chemical companies likely will benefit significantly from governmental policies directed at increasing renewable energy production.