2004 YEAR IN REVIEW

Abstract

THE LONG-AWAITED TURNAROUND IN THE CHEMICAL sector finally arrived in 2004. Its intensity came as a surprise to most observers in the industry, as did its resilience in the face of extremely high raw material and energy costs. In 2004, volumes, prices, profits, and even chemical stock prices all increased. The year saw a frenzy of deals. Private equity firms targeted the industry while large diversified companies seized the opportunity to carve out smaller divisions through initial public offerings. Although the industry didn't expect to boost R&D much this year, it was pursuing research in nontraditional ways in hopes that prosperity could come from resources other than its own. Venturecapital investments in start-up firms and farming out problems to Internet-based forums were among the tools companies used to gain insights into areas outside of their expertise. Legacy issues such as asbestos and price-fixing problems complicated daily operations. Companies continued to develop new products to counter ...