The Top 10 European Specialty Chemicals Companies: Changing business models, strategies and SWOTs

The specialty chemicals operations of major European players remained relatively resilient during the economic downturn compared to their other business lines. The 2005-09 period witnessed a considerable rise in consolidation activities among European companies. Some players are focused on backward integration of operations whilst others are aiming to offload non-core franchises. Consolidation is in part prompted by fluctuations in raw material prices and rising competitiveness in the global marketplace.
The report profiles major European players in the specialty chemicals segment and elucidates trends associated with these companies, and insights into the opportunities and threats facing them. This report provides detailed profiles of ten leading European specialty chemicals companies, and brief profiles of other major players. The detailed profiles contain descriptions of business, financial performance, growth strategies and SWOT analyses. Analysis is based on:
• Each company’s consolidated and segmental financial performance;
• Each company’s growth strategies and major acquisitions and divestments relating to the specialty chemicals market;
• Key partnerships and alliances formed by these companies;
• Business-related strengths and weaknesses of these companies.

Key features of this report

• Key drivers and resistors to growth of leading European specialty chemicals companies.
• Common industry characteristics in strategies and performance of European specialty chemicals companies.
• Analysis of financial performance and growth strategies of leading specialty chemicals companies during 2005–09.
• Overview of specialty chemicals product portfolios of leading companies.
• SWOT analysis of the leading European specialty chemicals companies.

Scope of this report

• Learn from the strategies of European specialty chemicals companies to target future growth markets effectively, avoid their mistakes, replicate their successes and learn of the threats they face.
• Benchmark your performance against the leading European specialty chemicals companies by understanding their strategies.
• Measure the resilience of specialty chemicals operations of European companies during the economic downturn.
• Compare performances of specialty and non-specialty chemicals operations of European companies in the global soft drink market arising from the change in consumers’ preferences and global recession.
• Save time, money and resources on analyzing the performance of leading specialty chemicals companies using this report.

Key Market Issues
• Raw material price fluctuations: Review of the 2005-09 period indicates that profits of specialty chemicals operations of leading European players are influenced by fluctuations in raw material prices. Rise in prices in early 2008 coupled with lack of backward integration squeezed margins of Ciba leading to its acquisition by BASF. Fall in prices during the economic downturn had considerable effects on operating margins of European players.
• Fall in demand during downturn: Fall in demand considerably suppressed operating income of European companies in 2009. However, prompt restructuring activities enabled several companies to maintain steady levels of operating margin.
• Relative resilience of specialty chemicals operations: Business Insights observes that the impact was less profound when compared to non-specialty chemicals. The contribution of specialty chemicals to the decline in consolidated revenues was relatively modest. Our in house developed Revenue Growth Index clearly differentiates the performance of specialty and non-specialty operations of European players.
• Consolidation: European players are focused on consolidating their position in the global specialty chemicals market through backward integration and shifting attention to core franchises. Ciba merged with BASF, sensing opportunities for backward integration. Lanxess divested its paper chemicals business, which was later acquired by Kemira.

Key findings from this report

• Business Insights forecasts that the global specialty chemicals market will grow at a CAGR of 2% during 2010–14 to reach a total value of approximately $319bn in 2014.
• The 15 leading European companies generated $44.9bn sales in 2009, accounting for 15.6% of the $288bn global specialty chemicals market.
• BASF was the largest European specialty chemicals company with $13bn sales in 2009. The acquisition of Ciba in 2008 propelled the company’s topline significantly.
• European specialty chemicals companies were not insulated from the fall in volume sales experienced by the global chemicals industry. The majority of these players were affected by the fall in industrial input costs as was observed in their selling prices.
• Business Insights’ Revenue growth index found that during the downturn, specialty chemicals businesses of European players performed better than their non-specialty operations.

Key questions answered

• What was the market size of the global specialty chemicals industry by value in 2009?

• What will be the market size of the global specialty chemicals industry during 2010-14?

• What are the key trends observed in the European specialty chemicals companies and strategic responses that are taking shape?

• Who are the major European players in the global specialty chemicals market?

• What are the growth strategies of the leading 10 companies?





Report Highlights

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Table of Contents
The Top 10 European Specialty Chemicals Companies
Executive summary 12
Competitive landscape 12
BASF 12
AkzoNobel 13
Clariant 13
Evonik Industries 14
Cognis 14
Kemira 15
Lanxess 15
Rhodia 15
Wacker 16
Croda 16
Chapter 1 Introduction 20
What is this report about? 20
Methodology 20
Chapter 2 Competitive dynamics 24
Summary 24
Introduction 24
Defining specialty chemicals 25
Global specialty chemicals market 27
Competitive positioning of major European specialty chemicals companies 27
Trends 30
Drivers and resistors 30
European specialty chemicals weather recession 30
Consolidation underway in the industry 32
Focus on emerging markets, especially China rises 33
Slow shift towards natural raw materials 34
Chapter 3 BASF 36
Summary 36
Company overview 36
Recent financial performance 37
Performance by business segments 38
Performance of specialty chemicals business 39
Growth strategies 40
New products/applications 40
Expansion in emerging markets 41
Partnerships and alliances 41
Acquisitions and divestments 42
SWOT analysis 43
Chapter 4 AkzoNobel 46
Summary 46
Company overview 46
Recent financial performance 47
Performance by business segments 48
Performance of specialty chemicals business 49
Growth strategies 50
Expansion in emerging markets 50
Acquisitions and divestments 50
SWOT analysis 51
Chapter 5 Clariant 54
Summary 54
Company overview 54
Recent financial performance 55
Performance by business segments 56
Performance of specialty chemicals business 57
Growth strategies 58
Leaner product spectrum for better profitability 58
Expansion in emerging markets 59
Partnerships and alliances 59
Acquisitions and divestments 59
SWOT analysis 60
Chapter 6 Evonik Industries 62
Summary 62
Company overview 62
Recent financial performance 63
Performance by business segments 64
Performance of specialty chemicals business 65
Growth strategies 66
Increasing focus on specialty chemicals 66
Expansion in emerging markets 66
SWOT analysis 67
Chapter 7 Cognis 70
Summary 70
Company overview 70
Recent financial performance 71
Performance by business segments 72
Performance of specialty chemicals business 73
Growth strategies 74
Identifying new product applications and expanding product family spectrum 74
Expansion in emerging markets 75
SWOT analysis 76
Chapter 8 Kemira 78
Summary 78
Company overview 78
Recent financial performance 79
Performance by business segments 79
Performance of specialty chemicals business 80
Growth strategies 81
Expansion in emerging markets 81
Partnerships and alliances 82
Acquisitions 82
SWOT analysis 83
Chapter 9 Lanxess 86
Summary 86
Company overview 86
Recent financial performance 87
Performance by business segments 88
Performance of specialty chemicals business 89
Growth strategies 90
New product launches 90
Expansion in emerging markets 90
SWOT analysis 92
Chapter 10 Rhodia 94
Summary 94
Company overview 94
Recent financial performance 95
Performance by business segments 96
Performance of specialty chemicals business 97
Growth strategies 98
Identifying new product applications and expanding product family spectrum 98
Expansion in emerging markets 98
Surfactant business strengthened through McIntyre acquisition 99
SWOT analysis 99
Chapter 11 Wacker 102
Summary 102
Company overview 102
Recent financial performance 103
Performance by business segments 104
Performance of specialty chemicals business 105
Growth strategies 106
Identifying new product applications and expanding product family spectrum 106
Expansion in emerging markets 106
Partnerships and alliances 107
SWOT analysis 108
Chapter 12 Croda 110
Summary 110
Company overview 110
Recent financial performance 111
Performance of business segments 112
Growth strategies 113
Reducing influence of commodities 113
SWOT analysis 114
Chapter 13 Other major players 116
Altana 116
Company overview 116
Recent financial performance 116
Performance of specialty chemicals business 117
Umicore 118
Company overview 118
Recent financial performance 119
Performance of specialty chemicals business 120
Sud-Chemie 121
Company overview 121
Recent financial performance 122
Performance of specialty chemicals 123
Arkema 124
Company overview 124
Recent financial performance 125
Performance of specialty chemicals 126
Yule Catto 127
Company overview 127
Recent financial performance 128
Performance of specialty chemicals 129
Appendix 131
Definitions 131
Revenue growth index 131
REACH 131
Exchange rates 131
Index 132
List of Figures
Figure 2.1: Business Insights’ chemical industry matrix 26
Figure 2.2: Competitive position of European specialty chemicals companies, 2009 29
Figure 2.3: Drivers and resistors of the specialty chemicals industry 30
Figure 2.4: Revenue growth index of European specialty chemicals companies, 2005–09 32
Figure 3.5: BASF’s consolidated financial performance, 2005–09 38
Figure 3.6: BASF SWOT analysis 43
Figure 4.7: AkzoNobel’s consolidated financial performance, 2005–09 48
Figure 4.8: AkzoNobel SWOT analysis 51
Figure 5.9: Clariant’s consolidated financial performance, 2005–09 56
Figure 5.10: Clariant SWOT analysis 60
Figure 6.11: Evonik Industries’ consolidated financial performance, 2006–09 64
Figure 6.12: Evonik Industries SWOT analysis 67
Figure 7.13: Cognis’ consolidated financial performance, 2005–09 72
Figure 7.14: Cognis SWOT analysis 76
Figure 8.15: Kemira SWOT analysis 83
Figure 9.16: Lanxess’ consolidated financial performance, 2005–09 88
Figure 9.17: Lanxess SWOT analysis 92
Figure 10.18: Rhodia’s consolidated financial performance, 2005–09 96
Figure 10.19: Rhodia SWOT analysis 99
Figure 11.20: Wacker’s consolidated financial performance, 2005–09 104
Figure 11.21: Wacker’s SWOT analysis 108
Figure 12.22: Croda’s consolidated financial performance, 2005–09 112
Figure 12.23: Croda SWOT analysis 114
Figure 13.24: Altana’s consolidated financial performance, 2005–09 117
Figure 13.25: Umicore’s consolidated financial performance, 2005–09 120
Figure 13.26: Sud-Chemie’s consolidated financial performance, 2005–09 123
Figure 13.27: Arkema’s consolidated financial performance, 2005–09 126
Figure 13.28: Yule Catto’s consolidated financial performance, 2005–09 129
List of Tables
Table 2.1: Global specialty chemicals market size ($bn), 2009–14 27
Table 2.2: Key financials of European specialty chemicals players, 2009 28
Table 2.3: Financial performance of specialty chemicals operations of European companies, 2005–09 31
Table 2.4: Illustrative examples of green products from European specialty chemicals companies 34
Table 3.5: BASF snapshot 36
Table 3.6: BASF’s consolidated financial performance, 2005–09 37
Table 3.7: Financial performance of BASF’s business segments, 2009 38
Table 3.8: BASF’s specialty chemicals portfolio 39
Table 3.9: Financial performance of BASF’s specialty chemicals business, 2005–09 40
Table 3.10: BASF: new products/applications, 2008–09 41
Table 3.11: BASF’s partnership deals, 2008–09 42
Table 4.12: AkzoNobel snapshot 46
Table 4.13: AkzoNobel’s consolidated financial performance, 2005–09 47
Table 4.14: Performance of AkzoNobel’s business segments, 2009 48
Table 4.15: AkzoNobel’s specialty chemicals operations, 2009 49
Table 4.16: Financial performance of AkzoNobel’s specialty chemicals business, 2007–09 50
Table 4.17: AkzoNobel acquisitions, 2008–09 51
Table 5.18: Clariant snapshot 54
Table 5.19: Clariant’s consolidated financial performance, 2005–09 55
Table 5.20: Performance of Clariant’s business segments, 2009 56
Table 5.21: Clariant’s specialty chemicals portfolio, 2009 57
Table 5.22: Financial performance of Clariant’s specialty chemicals business, 2005–09 58
Table 5.23: Clariant: new products/applications, 2008–09 58
Table 6.24: Evonik Industries snapshot 62
Table 6.25: Evonik Industries’ consolidated financial performance, 2006–09 63
Table 6.26: Performance of Evonik Industries’ business segments, 2009 65
Table 6.27: Evonik Industries’ specialty chemicals portfolio 65
Table 6.28: Financial performance of Evonik Industries’ specialty chemicals business, 2006–09 66
Table 7.29: Cognis snapshot 70
Table 7.30: Cognis’ consolidated financial performance, 2005–09 71
Table 7.31: Performance of Cognis’ business segments, 2009 72
Table 7.32: Cognis’ specialty chemicals portfolio 73
Table 7.33: Financial performance of Cognis’ specialty chemicals business, 2005–09 74
Table 7.34: Cognis: new products/applications, 2008–09 75
Table 8.35: Kemira snapshot 78
Table 8.36: Kemira’s consolidated financial performance, 2005–09 79
Table 8.37: Performance of Kemira’s business segments, 2009 80
Table 8.38: Kemira’s specialty chemicals portfolio 80
Table 8.39: Financial performance of Kemira’s specialty chemicals business, 2005–09 81
Table 8.40: Kemira’s acquisitions, 2008–09 82
Table 9.41: Lanxess snapshot 86
Table 9.42: Lanxess’ consolidated financial performance, 2005–09 87
Table 9.43: Performance of Lanxess’ business segments, 2009 89
Table 9.44: Lanxess’ specialty chemicals portfolio 89
Table 9.45: Financial performance of Lanxess’ specialty chemicals business, 2005–09 90
Table 9.46: Lanxess: new products/applications, 2008–09 90
Table 10.47: Rhodia snapshot 94
Table 10.48: Rhodia’s consolidated financial performance, 2005–09 95
Table 10.49: Performance of Rhodia’s business segments, 2009 96
Table 10.50: Rhodia’s specialty chemicals portfolio 97
Table 10.51: Financial performance of Rhodia’s specialty chemicals business, 2005–09 97
Table 10.52: Rhodia: new products/applications, 2008–09 98
Table 11.53: Wacker snapshot 102
Table 11.54: Wacker’s consolidated financial performance, 2005–09 103
Table 11.55: Performance of Wacker’s business segments, 2009 104
Table 11.56: Wacker’s specialty chemicals portfolio 105
Table 11.57: Financial performance of Wacker’s specialty chemicals business, 2005–09 105
Table 11.58: Wacker: new products/applications, 2008–09 106
Table 11.59: Wacker’s partnership deals, 2008–09 107
Table 12.60: Croda’s snapshot 110
Table 12.61: Croda’s consolidated financial performance, 2005–09 111
Table 12.62: Performance of Croda’s business segments, 2009 113
Table 12.63: Croda’s specialty chemicals portfolio 113
Table 13.64: Altana snapshot 116
Table 13.65: Altana’s consolidated financial performance, 2005–09 117
Table 13.66: Financial performance of Altana’s specialty chemicals business, 2005–09 118
Table 13.67: Umicore snapshot 118
Table 13.68: Umicore’s consolidated financial performance, 2005–09 119
Table 13.69: Financial performance of Umicore’s specialty chemicals business, 2005–09 121
Table 13.70: Sud-Chemie snapshot 121
Table 13.71: Sud-Chemie’s consolidated financial performance, 2005–09 122
Table 13.72: Financial performance of Sud-Chemie’s specialty chemicals business, 2005–09 124
Table 13.73: Arkema snapshot 124
Table 13.74: Arkema’s consolidated financial performance, 2005–09 125
Table 13.75: Financial performance of Arkema’s specialty chemicals business, 2006–09 127
Table 13.76: Yule Catto snapshot 127
Table 13.77: Yule Catto’s consolidated financial performance, 2005–09 128
Table 13.78: Financial performance of Yule Catto’s specialty chemicals business, 2006–09 130


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