Document pmJmDOpdGOo19jZRowNjEMmNE

Industry / Business arowth slows in Top 50 chemicals' output Total output reached about 410 billion pounds last year, but growth of 4% was less than half that of year before Earl V. Anderson C&EN, New York The steady stream of annual reports that has flowed out of chemical com panies' headquarters recently indicates that 1973 was a joyous one for the in dustry in terms of profits. But this year's list of the Top 50 chemical prod ucts paints a somewhat different pic ture for chemical output last year. The list clearly marks 1973 as the year in which the chemical industry had to learn to live with shortages, a life style it may have to contend with for several years to come. A chemical company vice president recently told C&EN, "We aren't taking customers out to lunch anymore. We're wining and dining our suppliers." He was laughing when he said it, but he probably wasn't joking. The Top 50 list shows why. Run your finger down the growth rate columns. For 11 chemical products, production declined in 1973. By comparison, only four sported minus signs for 1972 (C&EN, May 7, 1973, page 8), year of the gTeat recovery for the chemical in dustry. Moreover, of the entire 50 products on the list, only 13 had higher growth in output in 1973 than they had the preceding year. On last year's list, 41 products had higher growth rates. Overall, the growth rate last year for the 50 products was only about half what it had been in 1972. The total volume of production for all 50 chemi cals was up 4.1% in 1973, compared to an increase of 9.7% during 1972. Production of all the 50 chemicals on C&EN's list totaled more than 400 bil lion pounds. That is a solid foundation upon which to gage the industry's per formance. The list has been an excel lent barometer of chemical production in past years and this year is no excep tion, even though the readings may not be to the industry's liking. In the past, whenever chemical pro duction tapered off, the reason could usually be found in the general health of the economy. Lower production growth rates usually accompanied a re cession, or at least a business slowdown when demand for chemical products just wasn't there. Not so in 1973. The valve that limit ed production growth was on the sup ply end of the flow chart, not the de mand end. This was particularly true of organic chemicals where shortages of crude oil and natural gas, and the Arab oil embargo put a squeeze on petro chemical feedstocks. The Top 50 list reflects this dramatically. Of the 30 or ganics, only five had higher growth rates in 1973 than they did in 1972. Among inorganic chemicals, with only 20 products on the list, eight chemicals grew faster last year than they did the preceding year. Ethylene and its derivatives provide a good example of the chain reaction caused by the shortage of hydrocarbon raw materials. Last year ethylene out put hit 22.4 billion pounds, tops among About the Top 50 list C&EN compiles its list of the Top 50 chemical products on the basis of production volume, using gov ernment and trade association sources for data when they are available and C&EN estimates when data are incomplete. Each product's ranking for the previous year (in this case 1972) has been revised to reflect changes in statis tics and may not coincide exactly with its rank as published in last year's Top 50 table. All basic, intermediate, and chemically homogeneous finished products are candidates for the list. These range from petrochemical building blocks, such as ethylene and propylene, to such derivative products as ethylene glycol and vinyl acetate. The list includes basic inorganics, such as sulfuric acid and caustic soda, but excludes basic minerals (for instance, salt, lime, potash, gypsum, and sulfur). It also excludes such petrochemical feedstocks as ethane, propane, and butane because they are largely products of the oil and gas industry and have many nonchemical uses. Admittedly, the list contains some gray areas. Basic aromatic chemicals--benzene, toluene, and xylene, in particular--make the purely chemical nature of the list less pure. This year, C&EN chose the organics. But that represents a growth of only 7.4%, compared to 13% the year before. Faced with a shortage of ethylene, companies that used it as feedstock had a decision to make. Which of their products would get the ethylene that was available? The obvious answer was those prod ucts that yield the greatest profit mar gin. The Top 50 list and the accompa nying list of plastics show what hap pened. Output of high-density polyethylene jumped 20.8% and that of low-density polyethylene advanced 10%, good growth even though less than occurred in 1972. However, other downstream products suffered. Ethyl ene oxide output was down 1.9%, com pared to a 9.8% increase in 1972. Eth ylene glycol production was down 0.3%; it was up 7.5% in 1972. Ethanol output was up 5.1% last year, only a third the growth it displayed in 1972. to keep benzene, toluene and xy lene (all grades) on the list. How ever, for the first time, it also con sidered as candidates p-xylene (which had enough production vol ume itself to make the list) and oxylene (which did not make it). This year, the companion table of plastics, synthetic fibers, and syn thetic rubber has been expanded. Consequently, several plastics have been omitted from the Top 50 table. Some, such as polyethylene, proba bly are qualified candidates for the Top 50 table. Others, such as poly vinyl chloride and its copolymers, probably aren't sufficiently distinct chemical entities to be on the list. For consistency, however, all plas tics were excluded from the list, thus opening up several spots for "purely chemical" candidates. In the future, additional changes may be made to eliminate further gray areas. The process is limited, how ever, by availability of statistics. The commonly used units of measurement (pounds, gallons, cubic feet) have been converted to billions of pounds to provide an ac curate ranking and easy compari son. However, the more familiar units of measurement also are list ed, as well as growth rates for the most recent year, previous year, past five years, and past 10 years. 10 C&EN May 6, 1974 BFG24837 2332.1001 RENEWABLE. A few things in life may still be renewable but not many are raw materials. Arizona's resins, rosins, esters, fatty acids and terpenes are made from renewable resources. The products we're making today are conceivably being made from trees planted about the time we started in business. Twenty-five years from now we'll be making other products from trees planted today. So if you're making or developing products that require chemicals like ours, come to Arizona. Arizona Arizona Chemical Company, Wayne, New Jersey 07470 May 6, 1974 CAEN 9 BFG24838 23321002 wRnaintfnc * i1 23 32 44 55 Sulfuric adW Oiyfsa, high and law purity Ammonia, synthetic anhydrous Ethylene Sodium hydroxide, 100% liquid MM 63.18 62.60 31.87 29.22 30.94 30.39 22.41 20.86 21.36 20.43 vn w 31.50 tt 31.388 tt 385 bef bcf 15,460 tt 15,199 tt 22,405 mp 20,852 mp 10,678 tt 10,217 tt 048 8M8 MM MM 8.9* tJt 1.8 7.4 4.5 7-8* 98.7 4.8 13.8 5.7 MS u% 9.2 11.8 M 8.7 11.3 114 3.8 6.3 6 6 Chlorine, gas 20.60 19.75 10,302 tt 9,873 tt 4.3 5.6 4.1 6.6 7 9 Nitrogen, high and low purity 16.38 14.06 226 bcf 194 bcf 16.5 15.5 13.7 16.1 8 8 Sodium carbonate, synthetic and natural 14.99 14.88 7,496 tt 7,439 tt 0.8 4.0 2.5 2.6 9 7 Nitric acid 14.86 15.96 7,430 tt 7,981 tt -6.9 4.S 1.2 5.8 10 10 Ammonium nitrate, original solution 13.89 13.76 6,943 tt 6,881 tt 1.3 3.7 3.9 5.7 11 11 12 12 13 14 14 13 15 15 Phosphoric add, total Benzene, all grades Propylene Ethylene dichloride Urea, primary solution 13.00 13.08 10.65 9.18 8.78 8.47 7.90 8.60 7.12 6.95 6,480tt 6,531tt -0.5 9.4 4.3 8.4 1,453 mg 1,252 mg 16.1 16.4 7.8 8.4 8,764 mp 8,472 mp 3.4 22.9 4.5 12.4 7,903 mp 8.600 mp -8.1 13.8 10.5 18.0 7,120 mp 6,950 mp 2.4 9.2 7.9 12.4 15 18 17 16 18 17 19 20 20 19 Methanol, synthetic Toluene, all grades Ethylbenzene Formaldehyde, 37% by weight Styrene 21 21 22 22 23 23 24 25 25 24 Xylene, aR grades Vinyl cMeride nyWwQIMIK mdUf HnHaa-----a-- -a- a - - - - -*- -a--A--a AffMMiHi riMl . Ohytanemdde 28 26 27 28 28 27 28 30 30 29 medians (!, rubber grade CerbewMa* ^p^p^bcb lma^nfMns >fVO IlOmmw ptM^- Carbee si terns 7.12 6.78 6.60* 6.17 6.01 5.98 6.63 6.43* 5.69 5.95 7,118 mp 5,956 mp 19.5 20.3 13.3 11.8 936 mg 985 mg 2.2 4.6 6.1 8.7 6,508 mp* 6,425 mp* 1.2 28.9 10.0 104 6,173 mp 5,650 mp 9.3 24.9 7.5 9.3 6,(04 mp 5,960 mp 1.1 274% 18.2 18.8 5.98 5.38 5.35 5.18 4.78 4.68 3.98 3.72 3.88 3.98 8e 5.30 n* 24*t8 140 tt 735mp iOlnp U8tt - :% ^... X: . - JUS'-' 84 ** ffif.fr*:. * 12.5 \ sjtr 6.5 Mfc- -8-2 'zmiL- 8.1 94 14.1 *5 5.1 74 3.88 Ml 3.28 24 2.77 IS 1 2.(8 2.* ' 34*t*P 34*pS% mm* * 4.7 Mm# **w *8 l^;'-4^f> ^aje* ' hi 14*98 Uif>4- -Kfe 14** lAMp?- $&^-m U* *(* 2 24*r t 240 2.48 240 2J8. *M'-tm2*1- 2J^'~ fate* 24#^ 148 1.78 1.97* 14P Ute 248 148 148 U* 148 Ut 14* <*5853^ **' w - ^5|j \ *T jf^t ?'---tt4"-*4 -**:- z* +jaoMjPPflr `^'A "4-*x. * 7.* 7.7 -*& -'_ 7* --*3 it 14 14 ------ --- . ---- Biir--m aflhi Ciwat, 1.5* 1.48 1.48 1.48* 1.38 1.4*. 1.28 1.32 148* 1.17 /%;" < W13.9 24 14 ?*2s*^ 2.8 5La,8 ,:^jr 1 ,`*4*>V^V4 ' ^rjssiiMaL 'ji f* fe* ' ?**: ifr*-m*e8B* ii BFG24839 Production of another important eth ylene derivative--ethylene dichloride-- was down 8.1% last year, but a critical shortage of chlorine contributed as much to that decline as did the short age of ethylene. Output of ethylben zene was held to a low 1.2% gain, not only because of a lack of ethylene, but because of a tight benzene situation. In 1972 ethylbenzene production in creased a hefty 28.9%. The ethylben zene shortage, in turn, dropped the growth in styrene production from 27.1% during 1972 to only 1.1% in 1973. Two products that were able to weather the general shortage of aro matics were terephthalic acid and di methyl terephthalate. Both are raw materials for polyester, the stellar per former of man-made fibers. Polyester fiber output jumped 24% last year to 2.9 billion pounds, and production of terephthalic acid and dimethyl tereph thalate jumped right along with it by 23.6% and 30.9%, respectively. Although production of organics suf fered more than that of inorganics in 1973 as a result of shortages, the organ ics as a group are still growing much faster. There are 30 organics on this year's Top 50 list; only four years ago there were 24. On a volume basis, the organics on the Top 50 list increased their output 6.8% in 1973, but the inor ganics only advanced 2.7%. Both the five-year and the 10-year average growth rates are higher for organics than for inorganics. But what the inorganics lack in growth, they more than make up in sheer volume. They account for better than 65% of the 410 billion pounds of production of all products on the Top 50 list. Sulfuric acid, the perennial vol ume leader, alone accounts for 63 bil- Plastics, synthetic fibers, and rubber provide 38 billion pound market for chemicals PLASTICS Thermosetting resins Epoxies (unmodified) Polyesters (unsaturated) Urea resins Melamine resins Phenolic and other tar acid resins (Billions of pounds) 1973 PRODUCTION (Common units*) 1373 1372 1971 1969 19C3 0.22 223 184 169 158 81 1.06 1,051 933 730 615 255 0.87 867 739 636 816 518 0.17 170 171 168 e C 1.39 1,387 1,453 1,194 1,097 741 AVERAGE ANNUAL CHANGE 1972-73 1371-72 1999-73 1993-73 21.2% 12.6 17.3 -0.6 -4.5 8.9% 27.8 16.2 1.8 21.7 7.1% 11.3 4.9 C 4.8 10.6% 15.2 7.2 C 6.5 Thermoplastic resins Polyethylene Low-density High-density Polypropylene and copolymers Styrene and copolymers Polyvinyl chloride and copolymers TOTAL* TOTAL PLASTICS* SYNTHETIC FIBERS Celluloslcs Rayon Acetate TOTAL Noncelluloslcs Nylon Acrylic*1 Polyester* Olefin1 Glass fiber TOTAL TOTAL SYNTHETIC FIBERS SYNTHETIC RUBBER Styrene-butadienes Butyl Nitrile Polybutadiene Polyisoprene Ethylene-propylene Neoprene and other* TOTAL SYNTHETIC RUBBER 5.80 2.64 2.16 5.02 4.56 20.19 23.aa 5,803 2,637 2,162 5,022 4,562 20,196 23,864 5,274 2,325 1,726 4,671 4,259 18,255 21,735 4,458 1,924 1,288 3,748 3,471 14,889 17,785 3,306 1,261 878 2,896 2,635 10,976 13,662 1,754 516 197 1,494 1,386 5,347 6,942 10.0 13.4 25.3 7.5 7.1 10.6% 9.9% 18.3 20.8 34.0 24.6 22.7 22.6% 22.2% 11.9 15.9 19.8 11.7 11.6 13.0% 11.8% 12.7 17.7 27.2 12.9 12.7 142% 13.2% 0.90 895 965 915 1,104 979 -7.3 5.5 -4.1 -0.1 0.46 462 429 476 490 370 7.7 -9.9 -1.2 2.2 1.36 1,357 1,394 1,391 1,594 1,349 -2.7% 0.2% -3.0% 0.1% 2.18 0.74 2.90 0.49 0.69 7.00 a.36 2,175 742 2,901 492 689 6,999 8,356 1,975 626 2,339 417 572 5,929 7,323 1,595 545 1,831 322 468 4,761 6,152 1,350 521 1,094 264 403 3,632 5,226 692 210 220 35 192 1,349 2,698 10.1 18.5 24.0 18.0 20.5 U.0% 14.1% 23.8 14.9 27.7 29.5 22.2 24.9% 19.0% 10.0 7.3 21.5 13.3 11.3 u.o% 98% 12.1 13.4 29.5 30.5 13.6 17.9% 12.0% 3.39 0.35 0.19 0.74 0.26 0.26 0.60 1,512 157 83 332 117 118 266 1,476 129 73 294 132 90 223 1,416 106 65 254 117 60 222 1,389 113 71 217 140* i 201 1,159 108 48 1391 j j 154 2.4 21.7 13.7 12.9 -11.4 31.1 19.3 4.2 (21.7 12.3 15.7 12.8 50.0 0.5 1.7 6.8 3.2 8.9 10.9* i 5.8 2.7 3.8 5.6 15.11 j i 5.6 5.79 2,585 2,417 2,240 2,131 1,606 7.0% 7.9% 3.9% 4.9% abePclaausstiecsoaf nrodusnydninthga, tcicinfibcleurdse, smmillieolnampionuenadns;dsuyrnetah,edticInrculbubdeers, thousand long tone, b Totals modacrylic. a includes email are only for amounts of those products listed. Totals may not add anidax, saran, spandex, vinyon, and TFE- fluorocarbon yarn and monofilament, f Includes vinyon staple and tow. g Excludes high-styrene latex, h Includes chlorosulfonated polyethylene, poiyisobutylene plus aciylic, fluoro, polysulfide, ana silicone elastomers. Excludes polyurethane elastomers, i Includes polvisoprana and poiybu- tadiene. j includes polybutadiana, polyisoprana, and ethylene-propylene. Sources: Economics Bureau, Rubber Manufacturers Association, and Bureau of the Census Society of the Plastics Industry, jTyariff Commission. Textile /\ilA 12 C&ENMay6, 1974 BFG24840 I Organics trail inorganics in output... 500 Billions of pounds . but lead them in growth rate 20 a annual growth* | | Inorganics In To* 50 Organic* in Top SO H Top SO chamlcala IS 10 fct 3s m\ Organics in Top SO 1903 J_____ L. 1908 1907 I 1909 I_______ I________ L. 1971 1973 a Average of individual product growth rates (not growth rats of total volume in each category). 1974-73 1971-73 1900-73 1903-73 Total output of plastics, fibers, and rubber has almost tripled in past 10 years Billions of pounds 40 4 average annual growth 1073-73 1071-73 1960-73 1903-73 lion pounds of the total production, more than twice as much as does am monia, the second-ranked product. And the fact that sulfuric acid output was held to only a 0.9% gain last year is one reason why the inorganics as a whole registered their relatively low overall growth. Although most of the inorganics in creased between 2 and 7%, as they usually do, some of them stood above the crowd. The industrial gases, oxygen and nitrogen, scored gains of 9.1% and 16.5%, respectively. And sodium sili cate (water glass) jumped 10.4%. How ever, phosphorus (white and red), which was on the list last year, couldn't generate enough volume this year to be ranked among the 50 leading products. This year, it took a production of 1.35 billion pounds to make the Top 50 list. Last year, 1.13 billion pounds was sufficient. Unless some of the inorgan ics near the bottom of the list grow faster than their past long-term annual rate, they probably will be replaced on next year's list. Several billion-poundplus organics, among them carbon tet rachloride, phthalic anhydride, adipic acid, and o-xylene, are pressing to take their places. It will be interesting to watch what displacement, if any, occurs on next year's list. The lowest ranked inorganic is sodium silicate, in the 48th spot. If output increases this year only in line with its long-term growth trend, sodi um silicate stands a good chance of being bumped from the list. However, production of sodium silicate jumped 10.4% last year, triple its 10-year aver age growth rate. If it comes even close to repeating this year, it would again be assured a spot on the list. Of all the inorganics, sodium tripolyphosphate seems to be most likely to drop off the list. Production of STTP has been declining for the past several years, and it's only a matter of time before one of the unlisted organics passes it on its way down. The two most likely organics to make the Top 50 list are o-xylene, which had an output of 1.07 billion pounds last year, and adipic acid. Adipic actually was ranked 47th on the 1972 list, but output plummeted al most 25% last year, knocking it out of the 1973 ranking. May 6,1974 C&EN 13 BFG24841 233 1005 PPG's Newton wins CMRA Memorial Award Chemist turned marketing executive Wilbert F. Newton has seen chemical market research evolve from a relative ly simple approach to production, ca pacity, and marketing problems to its present status as a sophisticated, if, in his view, not yet quite scientific, pro fession. "In 1945," the congenial corpo rate vice president for marketing at PPG Industries (then Pittsburgh Plate Glass Co.) recalls, "I was asked to come to Pittsburgh to start up a mar ket research and development depart ment for PPG's chemical division. My first question was: What does that mean?" No one in the company could really answer him specifically, so Bill Newton had to set his own course. He soon be came active in the Chemical Market ing Research Association (CMRA), then still a very informal group made up mostly of people equally inexperi enced in the techniques of industrial market research. As he remembers it, "What we didn't understand, we sat around explaining to each other." Hav ing been present at the creation of CMRA, nearly 30 years ago. Bill New ton will receive in New York City this week, CMRA's annual memorial award "in recognition of his outstanding con tributions to the understanding, accep tance, methods, and knowledge of chemical marketing research." His respect for marketing research has grown. "You may not always be lieve it," he admits, "but you don't dare ignore it, either. If nothing else, it points up the need by business for a lot of contingency planning." Now, as head of all PPG's marketing activities and a member of its fourman management committee, Mr. Newton, 59, is no longer directly in volved with selling the company's chemicals, coatings, glass, or glass fiber. The decentralized firm's four di visions have prime responsibility for their own sales, both in the U.S. and abroad, although when appropriate he may prod them a bit to move more ag gressively. "But my major job," he ex plains, "is to contribute to the general growth, profitability, and welfare of the corporation." This lofty sounding mandate charges him .with coordinating divisional longrange planning and requests for capital appropriations, as well as with keeping interdivisional channels of communica tion open. On his shoulders, also, is re sponsibility for PPG's relations with the outside world (including federal agencies) and overall corporate devel opment. During a trip to Moscow last November, for example, he spearhead ed PPG's negotiations with Soviet offi cials that led last month to the signing of a letter of intent with U.S.S.R. Min ister of the Chemical Industry L. A. Kostandov. The agreement points the way toward cooperation in building a large-scale plastics complex (presum ably involving PPG's vinyl chloride technology) and other industrial proj ects in the Soviet Union. Perhaps because he is in charge of PPG's corporate relations activities, Mr. Newton is increasingly concerned about the tangled interface between big business and big government. "We have a system that operates, essential ly, through interactions in the market place," he says, "with governmental activity increasingly regulating that market economy. The fundamental question, as I see it, is: How can we get whatever regulation is needed--and I tend to favor minimum regulation--yet permit the system to function effec tively? How do we work, day-to-day, with regulatory actions and proposed legislation that affect our company in terests, without in the longer term los ing sight of the ultimate effect of gov ernment on our market system?" He suggests, for one thing, that something similar to environmental impact statements be required of pro posals for increasing taxes or regulating business that would spell out their eco nomic impact. As chairman of the U.S. Chamber of Commerce's antitrust and trade regulation committee, he is par ticularly apprehensive about the po tential threat he sees in Congressional proposals to broaden U.S. antitrust laws or to discourage overseas invest ment. He fears such moves will under cut the ability of U.S. companies to meet foreign competitors on an equal footing and also stifle foreign trade. He also is disturbed about what ap pears to be an increasingly critical atti tude toward big business on the part of the American public. He warns that industry spokesmen have done poorly in explaining how our business system operates, and he advocates a steppedup research effort aimed at developing more facts and better perspectives on questions of markets and free enter prise. "I feel very strongly that busi nessmen must do a much better job of interpreting how they function and communicating an understanding of our economic system to the public, as well as working constructively with all the branches of government," he argues. "It can't be done just with a big publicity campaign to say how good we are, but must be based on solid in formation and reasoned insights. " Mr. Newton is convinced that such matters are not really as unrelated to industrial marketing and market re search as they first might seem. "The impacts of government actions, con sumer attitudes, and public opinion are very much a subject for careful analysis and interpretation," he points out, "and offer a tremendous challenge to business market research." A native of Norfolk, Va., Bill New ton graduated with a B.S. in chemistry Newton: lot of contingency planning from the University of California, Berkeley, in 1937. He joined PPG in 1941 after working as a control and re search chemist for Shell Chemical in Pittsburg, Calif. After four years at PPG's Barberton, Ohio, laboratory, doing research and pilot-plant work on resins and phosgene chemistry, he set up the chemical division's market re search operation to explore potential outlets for a large number of inter esting materials the research labs had on their shelves but which the compa ny didn't then know what to do with. This, in turn, led to his taking on the task of coordinating chemical mar keting with the company's R&D ef forts, a job that sparked, among other things, PPG's initial efforts to find captive uses for its large chlorine out put by moving into chlorinated sol vents, vinyl chloride, and similar de rivatives. R&D, he became convinced, "should be directed primarily toward areas that the company has some rea sonable prospect of exploiting commer cially. Otherwise, it only leads to a lot of frustration." By 1956, Mr. Newton was director of PPG's chemical sales. Then, in 1961, in a switch that per haps was even sharper than his move from chemical to marketing research, Mr. Newton was named director of market planning for PPG's merchan dising division. The division then han dled most of the sales and distribution of the company's many paint and glass products. One of his assignments was to help restructure and simplify the company's paint and glass distribution systems, which hadn't changed very much in some 70 years. Eventually, the division was dissolved and its functions taken over by the glass and coatings divisions themselves. "I was able to bring to the problem of reorganization the objectivity of someone who had not been long immersed in the established system," he notes wryly. Mr. Newton later served two years as marketing 14 C&EN May 6. 1974 23321006 BFG24842