Arizona Chemical Competition
Now Viewing Arizona Chemical's competition in: Chemicals (primary)
Recent Developments
Toxic Substances Bill Re-introduced - A bill that would aim to reform the US Toxic Substances Control Act (TSCA) is likely to be re-introduced soon. The Kid-Safe Chemical Act (KSCA), which failed to pass in 2008, is believed to have better chances in the current session of Congress. Part of the bill would make the industry prove chemicals are safe to be used, whereas under current TSCA rules, the EPA has to prove chemicals are hazardous to restrict their use. While the bill is generally well-regarded by labor, environmental, and health groups, critics argue KSCA fails to adequately address some key shortfalls of TSCA, including an improvement in how the EPA works with other chemical regulators, such as OSHA and the FDA.
Alternative Energy to Drive Chemicals Demand - Several chemical companies anticipate the growing trend toward renewable energy will spur demand for their products. Industry leader DuPont expects sales of its products used in the photovoltaics industry to reach $1 billion within five years as the solar energy market grows by 50 percent year-over-year. Chemical companies also supply thermosetting epoxy used in wind turbines that generate renewable energy.
Companies May Face Refinancing Troubles - More chemical sector bankruptcies are expected, because the number of highly leveraged companies is greater than in past recessions, according to Moody's Investor's Service. Moody's considers 72 percent of the chemical sector companies it covers to have elevated leverage. Some companies with lower credit ratings may have trouble refinancing as a way to weather the downturn.
Competitive Landscape
Demand is driven by the health of the US economy because chemicals are used to make a wide variety of industrial and consumer products. The profitability of individual companies is closely tied to efficient operations. Big companies have large economies of scale in production. Small companies can compete effectively by producing specialty products, of which there are a large number, or by operating a single plant highly efficiently. The industry is highly automated: average annual revenue per employee is over $500,000.
Chemicals Industry Forecast
from Hoover's/D&B subsidiary First Research
The output of US chemicals is forecast to grow at an annual compounded rate of 2 percent between 2008 and 2013. Data Sourced: December 2008
Chemical Manufacturing Growth Dives Then Recovers
First Research forecasts are based on INFORUM forecasts that are licensed from the Interindustry Economic Research Fund, Inc. (IERF) in College Park, MD. INFORUM's "interindustry-macro" approach to modeling the economy captures the links between industries and the aggregate economy.
First Research Industry Growth Rating
The First Research Industry Growth Rating reflects the expected industry growth relative to other industries, based on INFORUM's forecasted average annual growth for the combined years of 2009 and 2010.
- Demand: Growth in specialty chemicals
- Need strong technical expertise
- Risk: Higher raw material costs
Industries Where Arizona Chemical Competes
- Chemicals
- Basic and Intermediate Chemical & Petrochemical Manufacturing (primary)