Business

Chemical investment abroad continues strong Foreign assets of 10 leading

U.S. chemical firms reached

$14 billion in 1980, up

13.5%, and now account for

31.1 % of their total assets

Overseas investment by the U.S. chemical industry seems to have in­creased further in the past year, based on data from 10 chemical companies that make up about 55% of U.S. chemical company sales.

Combined "identifiable foreign assets" of these 10 companies—Air Products, Allied Chemical, Celanese, Dow Chemical, Du Pont, B. F. Goodrich, Hercules, PPG Industries, Reichhold Chemicals, and Union Carbide—reached $14.1 billion in 1980, a 13.5% increase from 1979. On the other hand, total assets for the 10 companies, including those in the U.S., amounted to $45.5 billion by the end of 1980, a 10.1% increase from 1979.

Thus, foreign assets of the 10 companies increased more last year than their U.S. assets, which rose 9.0% to $31.4 billion in 1980.

Considering these 1980 increases, foreign assets now make up more than 31% of total assets of the 10 companies. In 1979 foreign assets accounted for about 30% of the total.

Dow Chemical, which has prided itself on its strong foreign business in the past few years, was far and away the leader in increasing its overseas properties last year. Its assets over­seas increased about 26% to $5.5 bil­lion last year. At more than 47%, these assets now make up almost half of the company's total, compared to 42% in 1979.

Foreign assets of three of the com­panies surveyed decreased in 1980. The biggest drop was for B. F. Good­rich, whose foreign assets fell 2.9% to $417 million in 1980. Reichhold Chemical's foreign assets declined 2.4% to $81 million during the year. And Du Pont's foreign assets de­creased 2.5% to $2.27 billion.

Although combined foreign assets for these 10 companies increased healthily, their foreign business in­creased even more. Overseas sales, including exports, for the 10 com­panies surveyed increased 16.5% in 1980 to a combined $17.2 billion. Their U.S. sales increased just 7.9% to a total of $36.9 billion.

Thus, with overall sales at more than $54 billion in 1980 (up 10.6% from 1979), foreign sales of the 10 companies now make up almost 32% of total sales. This compares to just over 30% in 1979.

Once again, Dow is the leader in percentage of sales abroad. The company's $5.5 billion in overseas sales account for almost 52% of total company sales, an increase from about 51% in 1979.

However, two companies edged out Dow's 17.6% foreign sales growth in 1980 over 1979. Allied Chemical's foreign sales jumped 38.7% to $1.5 billion in 1980. And Air Products' foreign sales increased 27.8% to $344 million. B. F. Goodrich chalked up the smallest increase in foreign sales, 2.9%, bringing them to $648 million last year.

For the 10 companies, for each dollar of foreign assets, there was $1.22 in foreign sales. This amount is up from $1.19 in 1979. In fact, in 1979, the 10 companies averaged $1.19 per dollar of assets in both their foreign and U.S. businesses. In 1980, U.S. sales per dollar of assets fell to $1.18, creating a total companywide average of $1.19 for 1980. The largest ratio was at Reichhold Chemicals, with $2.14 in sales for each dollar of com­panywide assets; each dollar of its foreign assets returned $1.93 in for­eign sales.

At the other extreme, Air Products' foreign sales amounted to just 77 cents for each dollar of foreign assets, and total sales just 81 cents for each dollar of total assets.

The caveat with these figures, however, is that instead of a high sales-to-assets ratio meaning that business has been good, it can mean that the company is running older, much more depreciated plants or that the company's export sales were larger in relation to sales from plants located at overseas sites.

William Storck, New York

Dow Chemical leads in foreign investment, with

$ Millions

Air Products0

Allied Chemical Celanese Dow Chemical Du Pont

B. F. Goodrich Hercules PPG Industries Reichhold Chemicals Union Carbide

Total

Foreign assets3

1980

$ 447 1,155

493 5,450 2,268

417 489 451

81 2,882

$14,132

% change

from 1979

20.4% 6.4 4.2

26.4 -2.5

-2.9 6.5

14.5 -2 .4 14.5 13.5%

Total assets 1980

$ 1,751 4,538 2,634

11,538 9,032

2,000 1,574 2,826

414 9180

$45,487

% change

from 1979

23.3% 7.8

10.7 12.5 6.8

5.0 8.5 7.2

-0 .3 12.0 10.1%

i overseas assets totaling $5.5 billion

Foreign assets as % of total assets 1980 1979

25.5% 25.5 18.7 47.2 25.1

20.8 31.1 16.0 19.6 31.4 31.1%

a Foreign identifiable assets, b Foreign sales include exports, c For fiscal year ending Sept

26.1% 25.8 19.9 42.1 27.5

22.5 31.6 14.9 20.0 30.7 30.1%

30, 1980.

Foreign salesb

1980

$ 344 1,531

760 5,493 3,865

648 632 661 156

3,149 $17,239

% change

from 1979

27.8% 38.7 13.1 17.6 15.1

2.9 5.2

16.2 13.9 13.2 16.5%

Total sales 1980

$ 1,421 5,519 3,348

10,626 13,652

3,080 2,485 3,158

885 9,994

$54,168

% change

from 1979

15.6% 27.4 6.4

14.8 8.6

3.1 6.0 2.1 1.2 8.9

10.6%

Foreign sales as % of total sales 1980 1979

24.2% 27.7 22.7 51.7 28.3

21.0 25.4 20.9 17.6 31.5 31.8%

21.9% 25.5 21.4 50.5 26.7

21.1 25.6 18.4 15.7 30.3 30.2%

8 C&EN March 30, 1981