Large Chemical Firms Research Articles

Dow plans industrial park

Dow Chemical plans to turn its 1,050-hectare manufacturing site in Midland, Mich., into a multitenant industrial park. The plan anticipates parent DowDuPont’s intention to split next year into three independent companies: Dow, DuPont, and Corteva Agriscience. Each will retain operations at the site. In addition, silanes maker Cabot, polyvinylidene chloride producer SK Saran Americas, and styrenics maker Trinseo already operate on the site and will continue to do so. Dow’s plan is to attract other industrial tenants who will benefit from the site’s existing utility, safety, logistics, and waste management infrastructure. As other large chemical firms have restructured, they too have turned sprawling sites into multitenant corporate parks. Among them is ICI, a once-dominant chemical maker that turned part of its Teesside, England, site into a multitenant research and pilot-plant facility called Wilton Centre in 2001. Clariant’s Muttenz, Switzerland, complex became Infrapark Baselland in 2011. Earlier this year, DuPont repurposed

Chemicals held hostage in China-U.S. trade spat

Groups representing the U.S. chemical industry are expressing alarm at the potential impact of a trade war between the U.S. and China. The two countries have both proposed lists of goods, each worth $50 billion annually, that will be subject to a 25% import tax if trade negotiations fail in the coming months. “China is one of the U.S. chemical industry’s most important trading partners, importing 11%, or $3.2 billion, of all U.S. plastics in 2017,” said Cal Dooley, CEO of the American Chemistry Council, which represents large chemical firms. “We are particularly concerned that 40% of the products to which China has assigned new tariffs are chemicals.” The Society of Chemical Manufacturers & Associates (SOCMA), a trade group for specialty chemical producers, also expressed concern. “Many of the proposed targeted products will impact the business of specialty chemistry, from vital upstream building-block materials to the dozens of downstream market

Borealis to study Kazakh cracker

Austrian polyolefins maker Borealis has signed an agreement with United Chemical, an arm of the Samruk-Kazyna Sovereign Wealth Fund, to study building an ethylene and polyethylene complex in Kazakhstan. Total output would be 1.25 million metric tons per year. A feasibility study will wrap up a year from now, and an investment decision is set for 2020. The partners are also collaborating on a polypropylene plant in the country. Over the past decade, two large chemical firms, LyondellBasell Industries and LG Chem, both pursued chemical complexes in Kazakhstan only to walk away before sinking steel into the ground.

The mechanisms behind environmental strategies in chemical manufacturing firms

The evaluation of an effective environmental strategy goes beyond understanding its antecedents and benefits. Identifying and understanding the various mechanisms behind the formulation, design and implementation of environmental strategies is important – yet past studies have not adequately addressed this issue. This paper explores corporate environmentalism, and extends the framework by identifying the internal mechanisms behind the environmental strategies in large Malaysian chemical manufacturing firms. Given the exploratory nature of the study, a case study method using semi-structured interviews was used to ascertain these mechanisms. Interestingly, the results revealed seven important mechanisms of the environmental strategies in large chemical firms. These are a central system, internal system, quantifiable measurement, specific environmental management unit, strategy alignment, collaboration, and collective involvement. The mechanisms are clustered as systems and commitments based on the role that these mechanisms play in the environmental strategy of the firms. Additionally, powerful and influential top management commitments were found to contribute to the initiation of these mechanisms.

German firms upbeat

The chief executives of Lanxess, Evonik Industries, and Covestro—three of Germany’s largest chemical firms—are in a sprightly mood after strong trading in the second quarter led them to raise their profit forecasts for 2016. Their improved outlook comes despite depressed chemical prices and turbulence in some markets. And it contrasts with that of BASF, Germany’s largest chemical maker. Lanxess has raised its forecast for 2016 pretax earnings to a range of $1.04 billion to $1.08 billion from its earlier prediction of $1.0 billion to $1.06 billion. The firm anticipates increased sales volumes, leaner costs, increased plant utilization, and a more profitable product mix achieved by restructuring of some businesses. Lanxess recorded a 13.8% drop in second-quarter net profits to $84 million on sales down 7.7% to $2.3 billion compared with the same period a year ago. For the first time, the firm’s results reflect the sale of 50% of its

The licensing dilemma: understanding the determinants of the rate of technology licensing

AbstractThe licensing of technology entails a trade‐off: licensing payments net of transaction costs (revenue effect) must be balanced against the lower price–cost margin and/or reduced market share implied by increased competition (profit dissipation effect) from the licensee. We argue that the presence of multiple technology holders, which compete in the market for technology, changes such a trade‐off and triggers more aggressive licensing behavior. To test our theory, we analyze technology licensing by large chemical firms during the period 1986–96 for 107 chemical products. We find that the rate of technology licensing displays an inverted U‐shaped relationship with the number of potential technology suppliers and is negatively related to the licensor's market share and to the degree of technology‐specific product differentiation. Copyright © 2006 John Wiley & Sons, Ltd.

The Licensing Dilemma: Understanding the Determinants of the Rate of Technology Licensing

The licensing of technology entails a tradeoff: Licensing payments net of transaction costs (revenue effect) must be balanced against the lower price-cost margin and/or reduced market share implied by increased competition (profit dissipation effect) from the licensee. We argue that the presence of multiple technology holders, which compete in the market for technology, changes such a tradeoff and triggers more aggressive licensing behavior. To test our theory, we analyze technology licensing by large chemical firms during the period 1986-96 for 107 chemical products. We find that the rate of technology licensing displays an inverted U-shaped relationship with the number of potential technology suppliers and is negatively related to the licensor's market share and to the degree of technology-specific product differentiation.

Agricultural Biotechnology's Complementary Intellectual Assets

We formulate and test a hypothesis for the dramatic restructur- ing that the plant breeding and seed industry has recently undergone: the reorganization can be explained in part by the desire to exploit comple- mentarities between intellectual assets needed to create genetically mod- ified organisms. This hypothesis is tested using data on agricultural biotechnology patents, notices for field tests of genetically modified organisms, and firm characteristics. The presence of complementarities is identified with a positive covariance in the unexplained variation of asset holdings. Results indicate that coordination of complementary assets has increased under the consolidation of the industry. NE of the central problems in the economics of inno- vation concerns how industries change as they absorb fundamental research breakthroughs. Rarely has change been more pronounced than in agriculture following the introduction of recombinant DNA technology and affiliated techniques of genetic engineering. By offering breeders the ability to alter plant traits by directly manipulating se- quences of genetic code, tools of agricultural biotechnology change the possibilities for crop improvement profoundly. The new techniques enhance the speed and precision of agricultural research and development (R&D), while ex- panding the space of potential new products. Seed firms now offer farmers crop varieties embodying new ap- proaches for controlling pests, managing physical stresses on plants, increasing crop yields, and growing differenti- ated, quality-enhanced crops. Concurrent with these technical changes in the R&D process, the agricultural inputs industry has over the past two decades witnessed a comprehensive restructuring. Sev- eral large chemical firms, including Monsanto, Dow, and DuPont, moved aggressively into plant biotechnology, mak- ing huge investments in the life sciences. As newly minted companies, these firms acquired all of the large, national seed firms in North America, including Pioneer, DeKalb, Asgrow, Garst, and others. Meanwhile, the research-intensive agricultural biotechnology sector, from its appearance in the 1980s as a large set of small startup firms, had by the end of the 1990s already reached a second stage, with most of the startups either folded or acquired by the new agronomic systems giants. The industry's consoli- dation was surprising not only for its rapid pace and com- prehensive scope, but also for the extremely high valuations at which some firms were acquired. In 1997, for example, Monsanto acquired Holdens' Foundation Seeds of Wil- liamsburg, Iowa, together with two marketing subsidiaries, for $1.02 billion—25 times the annual sales of the mature, privately held firm whose revenues derived entirely from the breeding and distribution of corn seed. The emergent industry structure—with a relatively small number of tightly woven alliances, each organized around a major life-sciences firm, each vertically integrated from basic R&D through to marketing—stands in contrast to the more diffuse structure of twenty years ago. This structure is likewise noteworthy when one considers trends in other research-intensive fields. The pharmaceutical biotechnology industry, for example, maintains a large number of free- standing firms specializing in R&D and earning revenues through various licensing agreements (Majewski, 1998). Hall and Ziedonis (2001) observe that the U.S. semiconduc-

Shrinking Presence For Sogo Shosha

In past decades, Japan's general trading companies, or sogo shosha, have played an important role in the development of the Asian chemical industry. Over the past year or so, several of them have shown signs of financial weakness. The trading companies' presence in Asia's chemical industry is pervasive. For several of them, the sales of their chemicals business, which consists mostly of trading commodities, is larger than that of Japan's largest chemical firms. They own equity stakes in dozens of chemical projects across Asia. Although their investment in such projects tends to be limited to less than 10% of the equity, the minority stake is misleading. The shosha often take a central role in getting projects moving: They secure lenders, may guarantee the debt of the project, sometimes lend money to other equity investors, secure raw materials, manage the sales channels, and provide the equipment and technical expertise required to run the projects. Many of ...

Preventive Choices: Organizations' Heuristics, Decision Processes and Catastrophic Risks

Organizational decision processes and criteria for making choices about reducing the chances of catastrophic accidents are examined in six case studies of large chemical firms. The processes and heuristics observed are not consistent with the compensatory decision rules presumed by strict liability laws. They are consistent with satisficing, ambiguity management, and some aspects of threat‐rigidity behaviours observed in other arenas of organization studies. They are also consistent with psychological findings about how individuals make decisions about low‐probability catastrophe risks. The heuristics may derive in part from anticipated accountability to outsiders and higher managers. They may lead to ‘too much’ attention to some catastrophe risks, ‘too little’ to others.

Chemicals and long-term economic growth: insights from the chemical industry

ORGANIZATION AND PURPOSE. Introduction (A. Arora, et al.). COUNTRY OVERVIEWS. On the Making of Competitive Advantage: The Development of the Chemical Industries of Britain and Germany Since 1850 (J. Murmann & R. Landau). Chemicals: A U.S. Success Story (A. Arora & N. Rosenberg). The Japanese Puzzle (T. Hikino, et al.). INNOVATION AT THE HEART OF THE INDUSTRY. The Process of Innovation in the Chemical Industry (R. Landau). The Impact of the Legal System on Innovation (T. Campbell & R. Landau). Technological Change in Chemicals: The Role of University-Industry Relations (N. Rosenberg). SURVEYING THE LEVELS OF THE MATRIX. The Industry Evolves Within a Political, Social, and Public Policy Context: A Brief Look at Britain, Germany, Japan, and the United States (M. Horstmeyer). Monetary, Fiscal, and Trade Policies in the Development of the Chemical Industry (B. Eichengreen). Finance and the Chemical Industry (M. Da Rin). Structure and Performance of the Chemical Industry under Regulation (K. Esteghamat). Evolution of Industry Structure in the Chemical Industry (A. Arora & A. Gambardella). The Evolution of Corporate Capability and Corporate Strategy and Structure Within the World's Largest Chemical Firms: The Twentieth Century in Perspective (A. Chandler, et al.). THE MODERN CHEMICAL INDUSTRY AND CORPORATE GOVERNANCE. Connecting Performance and Competitiveness with Finance: A Study of the Chemical Industry (A. Richards). INSIGHTS FROM THIS STUDY. Conclusions (A. Arora, et al.). About the Contributors. Index.

Communicating Under Section 112(r) of the Clean Air Act Amendments

Regulations under Section 112(r) of the 1990 Clean Air Act Amendments require fixed facilities having threshold quantities of materials on the U.S. Environmental Protection Agency's list of regulated substances to disclose to the general public the expected offsite consequences of worst‐case accidental chemical releases. This paper describes the communication practices of small firms in Delaware and New Jersey and the practical problems these facilities might encounter complying with the proposed rule. The paper reports an interesting difference between the apprehension voiced by small firms required to report worst‐case release information and the public's apparent lack of interest in such information. Unlike the difficulty expected by small firms in calculating and communicating worst‐case chemical release information, this paper includes some observations on the ability of large chemical firms to comply with the proposed requirements.

Chemical stocks hammered in Tokyo

Japanese chemical stocks have generally underperformed the declining Tokyo stock market so far this year. Although the stock market has lost 7 to 8% of its value since the end of December, stock prices of some of Japan's largest chemical firms have declined as much as 14%. poor performance of Japanese chemical stocks becomes even more apparent when tracked over the past three months. Some companies' stock prices have declined more than 25% since the end of October, substantially underperforming the market. One exception is Shin-Etsu Chemical, a company whose stock price, in contrast, has been increasing steadily for the past year. Companies with a large exposure to petrochemicals have been particularly hard hit, says Nicholas Smith, chemical sector analyst at Jardine Fleming Securities in Tokyo. The problem is that we are entering a downturn in the petrochemical industry. Also, Japanese chemical companies have significant competitive problems. During the past four years, they have made very little m...

Fatal work-related injuries in the U.S. chemical industry 1984–89

Several mortality studies of the chemical industry have examined fatal injuries, but most of these studies have been of employees of large chemical firms and have not separated work-related from non-work-related injuries. We examined all U.S. Occupational Safety and Health Administration (OSHA) investigation files in 1984-89 in 47 U.S. states of fatal injuries in the chemical industry, Standard Industrial Classification (SIC) 2800-2899. OSHA investigates all reported deaths over which it has jurisdiction; this includes most causes of work-related death except for homicide and motor vehicle crashes. For the 6 year period, there were 234 fatalities in the chemical industry, for a work-related fatality rate of 0.55 per 10,000 workers/year. The largest category of deaths was from explosions, with 99 (42%), followed by fire & burns, with 32 (14%), poisoning, with 31 (13%), and falls, with 18 (8%). Of the 99 deaths from explosions, 45 (45%) involved manufacture or handling of fireworks or other explosives. The fatality rate at firms with fewer than 50 employees was more than twice that of larger firms (P < 0.05) and employees at small firms were less likely to have been covered by a union contract (P < 0.05). OSHA issued citations for safety violations in 73% of the deaths. While regulatory authorities and the media often focus attention on large, multinational chemical corporations, the highest worker fatality rates are found at the smallest chemical firms.

Two companies offer early retirement

In what might be signs of a chemical industry slowdown, two large chemical firms have revived the use of early retirement incentives in an effort to reduce their work forces. Pharmaceuticals manufacturer Schering-Plough has announced a program for which 900 people, or 6% of its domestic work force, are eligible. Hoechst Celanese is offering incentives to 220 salaried employees at its polyester textile fibers operations in Spartansburg, S.C.; its polyester film operation in Greer, S.C.; and its polybenzimidazole fiber operations in Charlotte, N.C., with the goal of reducing employment by 117. The Labor Department's seasonally adjusted data show that chemical industry employment, essentially flat over the past six months, declined by 1000 in June to 1,106,000. Industry capacity utilization has remained essentially flat this year at about 82%, following previous highs in the 1988-89 period of 86.8%, according to the Federal Reserve Board. Housing construction, a major chemical industry customer, is now ...