I N T E R N A T I O N A L

Germany's Big Three Do It Again Bayer, Hoechst, and BASF outpace German chemical industry with combined world-wide sales of $2.83 billion

West Germany's big three chemical firms—Fiirbenfabriken Bayer, Farb-werke Hoechst, and Badische Anilin-& Soda-Fabrik—grew bigger than ever last year. Bayer, still the undis­puted leader, pushed total world-wide sales to about $1.1 billion, 10.4% above the value of its 1962 sales. Hoechst did well, too, with total world sales of 8935 million, 8.1 % over the previous year. BASF, for the sec­ond year in a row, outstripped its sister firms in growth with a thrust of 11.39c, pushing world sales to $795 million.

Excluding operations abroad, the big three performed this way in 1963. Bayer and its wholly owned domestic subsidiaries chalked up sales of $904 million, 10.49c above the previous year. Hoechst, together with domes­tic subsidiaries in which its interest ex­ceeds 509c, sold $825 million worth of products, a gain of 7.29c over 1962 sales. C&EX estimates that sales of BASF's domestic interests totaled $747 million last year. (Since 1961, BASF has included sales of foreign in­

terests in which its holding is at least 509c in its published sales figure. Ac­cording to the firm's annual report for 1962, however, such foreign-based sales represented about 6% of the total in 1962 and 4% in 1961. C&EN's estimate of BASF's sales for 1963 is based on 6%.)

In a large part, 1963 was a carbon copy of 1962, when Bayer's world­wide sales increased almost 1 1 % , Hoechst's 8%, and BASF's 10%. The big three sales line-up remains the same as it has been since 1959, when Hoechst moved ahead of BASF to re­gain second place.

Exports. Exports were larger than ever for the three German chemical companies last year. Bayer sold $439 million worth of its products abroad, 16% more than in 1962. That was 48.69c of its inland production, com­pared to 46.29c in 1962. Hoechst's exports charged ahead just under 17% to $278 million, 33.7% of domestic production vs. 3 1 % a year earlier. BASF exported about $284 million

Combined Sales of Bayer, Hoechst, and BASF, Including German-Based interests, Reached $2.5 Billion Last Year SALES OF FOREIGN INTERESTS NOT INCLUDED

Year

1963 1962 1961 1960 1959 1958 1957 1956 1955 1954 1953 Notes: Bayer's sales include sales of the parent firm and its wholly owned domestic subsidiaries. Hoechst's sales include sales of the parent firm and domestic subsidiaries in which its interest exceeds 50%. Sales of BASF and its German interests for 1961-63 are C&EN estimates based on the company's world-wide sales. Conversion is 4.2 Deutsche mark per $1.00 for 1953-60 and 4.0 Deutsche mark per $1.00 thereafter.

Bayer Hoechst

(millions of dollars)

BASF

$904 $825 $747 818 770 674 762 718 625 670 642 616 585 528 540 478 449 459 441 419 428 380 352 356 342 302 300 288 268 250 244 225 211

worth of goods, about 13% more than in the previous year. As a share of in­land production, BASF's exports edged from 37.3% in 1962 to 38.1% last year.

In few other countries is so much chemical weight wielded by only three firms. In an unbroken trend over the past 11 years (since 1952), the three largest I. G. Farben successor firms have captured an increasingly greater share of West Germany's total chemi­cal sales. Combined sales of domes­tic interests of the trio—$2.48 billion-no w represent almost 37% of total West German chemical sales, which probably reached $6.75 billion last year. In 1953, the big-three slice was about 26%.

Combined exports of the three, at about $1 billion, were 53.5% of the national total of chemical exports, which were about $1.87 billion last year. Combined investment at $292 million, was almost 47% of the Ger­man chemical industry's total of $625 million in 1963. And at year's end, 163,365 people, about one in three of the total chemical work force, were employed by the three big firms.

With competition from within the European Economic Community, the U.S., the United Kingdom, and else­where building, there's no reason to believe that this trend toward concen­tration won't continue. Whether it's a healthy trend is hard to say. Such concentration would seem to strengthen the industry as a whole against foreign competition, but, at the same time, it tends to squeeze out smaller firms.

There doesn't seem to be quite as much talk in German chemical cir­cles these days about falling prices and shrinking profits. However, Bayer says that its production in tonnage rose 15% last year while the dollar volume of its sales increased only 10.4% be­cause of a 4% tumble in prices. Hoechst's tonnage output rose 10% vs. a 7.2% rise in sales value.

Labor costs continued their upward

62 C & E N FEB. 17, 196 4

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spiral, too. For Bayer, the 1963 labor bill jumped about 10.7% above 1962. In 1962, it had climbed 1 1 % . On the other hand, all three firms are increas­ing per capita sales. BASF now boasts per capita sales of about $16,-300 vs. $15,000 a year ago, Hoechst $15,200 vs. $14,500, and Bayer $14,-500 vs. $13,300. By comparison, Bayer's per capita sales in 1952 were about $6210, Hoechst's $6910.

Overseas. Germany's three big chemical companies seem to be throw­ing more effort into overseas ventures. Hoechst, for example, put out about $8 million last year for investments abroad, bringing its total overseas in­vestment to almost $51 million. In France, Hoechst recently picked up a substantial interest in Société Nor­mande de Matières Plastiques, which makes polypropylene. In the United Kingdom, Hoechst started to operate a polyvinyl acetate plant with the English firm Revertex. The company also started up a new PVA plant in Colombia, and is about to increase PVA production at its Canadian plant. In Australia, the firm bought a part in­terest in Industrial Chemical Products. The company, now called ICP-Hoechst, Pty., Ltd., will make PVA and organic dyes.

Meanwhile, BASF formed an Aus­tralian affiliate called BASF Australia (Mfg.), Pty., Ltd., to make expand­able polystyrene among other prod­

ucts. And, just at the end of the year, BASF's wholly owned subsidi­ary, BASF Overzee, N.V., took over United Cork Companies, South Kearny, N.J., which had had a BASF license to make expandable polysty­rene.

Investments. The three companies have continued substantial investment programs. Last year, Bayer socked about $112 million into plant invest­ment, a little less than 1962's $122 million, but about 12.4% of sales of its domestic interests. For Hoechst, the investment tab came to about $98 million, a bit more than in 1962 and representing about 12% of sales of its German-based interests. BASF in­vested about $81 million in its Lud-wigshaven plant last year compared to about $69 million the year before. That was about 1 1 % of the sales of its German-based interests. This year, Bayer and Hoechst both plan to invest about the same amount in new plant and equipment as they did last year. BASF, however, says it will probably spend more than a $100 million at its huge Ludwigshaven works, and still more in 1965.

Research spending by the three companies was at about the same level last year as in 1962. Hoechst shelled out $34 million for research. BASF spent about $32 million for re­search and Bayer's research spending was $40 million.

Methane Plant Rises on Mediterranean Coast At Arzew, Algeria, on the Mediterranean Coast, construction of CAMEL's methane liquefaction plant progresses on schedule. The plant will liquefy 150 million cubic feet a day of natural gas piped from the Hassi R'Mel fields in the Sahara Desert (C&EN, Sept. 16, 1963, page 130). The first unit, to process 50 million cubic feet a day of natural gas, should be completed this spring. Special tankers will take the methane to England and France. CAMEL is a 50/50 joint venture of a French con­sortium and Britain's Conch International Methane, Ltd.

64 C & E N FEB. 17, 1964

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4000 to 625 cm*1, with a version avail­able in linear wavelength. It is ideal if you normally operate in this fundamental region. The Model 337, also available in either linear frequency, or linear wave­length, scans from 4000 to 400 cm 1 . Both instruments cover their individual ranges in two serial scans, on convenient 8Vfc" χ Π " charts. No matter what your choice, either the Model 237B or the Model 337 will pro­vide all the performance you want at the lowest price available. For more informa­tion, write Instrument Marketing Division, Perkin-Elmer C o r p o r a t i o n , 7 8 0 M a i n Avenue, Norwalk, Conn.

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BRIEFS

Engelhard Industries, Inc., Newark, N.J., and Sumitomo Metal Mining Co., Ltd., Tokyo, Japan, have agreed to es­tablish a jointly owned company, Nippon Engelhard, Ltd., in Japan. The new company will make precious metal products for the chemical, pharmaceutical, electrical, and other industries in the Far East. Engelhard Industries, manufacturer of precious metal and chemical products, has 15 divisions in the U.S. and subsidiary companies in 12 foreign countries. Sumitomo Metal Mining is part* of the-Sumitomo industrial group, one of the three principal industrial complexes in Japan.

Air Liquide will design and build a plant at Sydney, Nova Scotia, to pro­duce 85 tons per day of high-purity oxygen for its sales organization, Canadian Liquid Air, Ltd., Montreal. The plant will cost more than $1 mil­lion and is scheduled to go on stream late this year.

Electric Reduction Co. of Canada, Ltd., is building a granular triple superphosphate plant at Port Mait-land, Ont. ERCO is a subsidiary of Albright & Wilson, Ltd., London, England. The company expects the plant to be completed in mid-1964.

Acquila Societa per Azioni Tecnico-Industriale has added a 2000 barrel-per-day Udex unit to its refinery at Trieste, Italy. The unit, designed and licensed by Universal Oil Products Co., Des Plaines, 111., separates aro­matic chemicals from catalytically re­formed gasoline stocks.

IGE Export division of General Electric will supply two gas turbine package power plants worth more than $2 mil­lion to the Trinidad and Tobago Elec­tricity Commission (T&TEC), Trini­dad, West Indies. The two gas tur­bine powermakers, each capable of generating 12,450 kw. of electricity, will be installed on T&TEC's power system at Point Lisas for T&TEC's in­creased power demands in the sur­rounding area. The turbines will also supply electricity for a new extension to the chemical plant owned by Fed­eration Chemicals, Ltd.

66 C&EN FEB. 17, 1964