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• Sector Overview
• Sector Performance
• Leading Companies
• Mergers, Acquisitions and Joint
Ventures
Industry Prole
• Industry Size and Value
• Production Levels
• Sector Investment
Market Trends and Outlook
• Polyethylene Glycol Presents
Opportunities in Asia
• Rising Demand for Automobile
Adhesives
• The Asia-Pacic is the Fastest
Growing Region for AerosolPropellants
• Market Outlook
Country Proles
• China
• India
• Japan
• Malaysia
• South Korea
• Taiwan
Currency Conversion Table
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• The chemical sector in the Asia-Pacic region grew in the six months under review, due to a jump
in M&A deals, demand for chemical and chemical products and investment activity in the region.
• Despite the slow recovery of the global economy, the Asia-Pacic continued to dominate the global
specialty chemicals market, closely followed by North America and Europe.
• The share prices of selected companies assessed by Mergent from November 7, 2014, to April 7,2015, grew by an average of 9.57%.
• A challenging and slowly recovering global economy led to increased Asia-Pacic joint venture
and acquisition activity, as companies sought to optimize their business portfolios by developing a
strategic alliance to boost prots and their market share values.
Industry Prole — Key Points
• The Asia-Pacic chemical industry is among the most diversied of global industries and produces
more than 70,000 products ranging from toiletries and plastics, to cosmetics, petrochemicals,
pharmaceuticals and fertilizers.
• China’s chemical companies continue to dominate the Asia-Pacic chemical market, replacing
Germany as the world’s second largest chemical producer, after US.
• Changing market dynamics have spread global chemical production throughout Asia, mostly to
China and India, making China the world’s second largest chemical producer after the US, andcontributing to Asia’s production levels and overtaking those in Europe.
• The Indian chemical industry is the country’s second largest industrial sector, after IT, with nine
broad segments: basic chemicals, petrochemicals, fertilizers, paints, varnishes, glass, perfumes,
toiletries and pharmaceuticals.
Market Trends and Outlook — Key Points
• Polyethylene glycol (PEG) has recently begun to experience growth in the global market as one
of the top lubricating agents. With the progressive development of the pharmaceutical industry in
countries such as China, Brazil and India, the market demand for PEG is expected to rise.
• Asia-Pacic countries, particularly China and India that are spearheading the commercial vehicle
production industry, are the largest consumers of adhesives in the global market.
• Aerosol propellants, widely used in products such as spray paints, air fresheners, and deodorants,have experienced signicant growth in the global market over the past six years.
• The outlook for the Asia-Pacic chemical industry is expected to remain stable over the next six
months, with China poised to lead growth due to a steady economy, abundant supply of feedstock
and a favorable labor market.
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8/16/2019 Asia Pacific Chemical Industry Report
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8/16/2019 Asia Pacific Chemical Industry Report
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Major Asia-Pacic chemical sectors grew in the six months
under review, due to an increase in M&A deals, demand
for chemical and chemical products and further investment
activity within the region. The strong rebound in fast-
emerging industries such as automotive, construction
and agricultural sectors boosted chemical demand in the
region, which continued to attract investment as global
chemical players saw it as an expansion platform for their
petrochemical and chemical business due to the local
availability of cheap feedstock.
Despite the slow recovery of the global economy, the
Asia-Pacic continued to dominate the global specialty
chemicals market, closely followed by North America and
Europe in the six-month period. Countries such as China
and India underpinned the demand for the specialty market
due to strong industrial activity. Japan and China are
expected to lead the Asia-Pacic market in the near future.
Japan’s economy and its chemical industry performed
better than expected in the six-month period, mainly due
to monetary policies to enhance global competitiveness
that promoted the depreciation of the yen. In June 2014,Japan’s Prime Minister Abe announced a broad package
that comprised the “third arrow” of the plans, including
liberalization of the agriculture and healthcare sector, and
also reducing the corporate tax from 35% to below 30%,
which began in January 2015.
China enjoyed continuous encouraging domestic demand,
strong agricultural markets and rapid development of
industrialization and infrastructure. However, its chemical
industry faced growing external competition in feedstock
supplies, a petrochemical surplus and safety issues,
causing chemical players to expand their efforts to become
more competitive globally. In India, persistent ination anda weak investment climate curbed chemical sector growth.
Nevertheless, rising disposable incomes and higher
standards of living led to higher consumption of chemicals
in the country.
In Malaysia, a sustained revenue expansion, a stronger
economy, more effective spending and the implementation
of expenditure reforms boosted growth. Gebeng Industrial
Park, located in Kuantan, continued to grow as a major
center for high-grade petrochemical production, with BASF
Petronas Chemicals spending RM1.5 billion (US$0.42
billion) on an integrated aroma ingredients complex to be
built within its existing site. Due to be fully operational
in 2016, the complex will employ 120 technically skilled
locals. Moreover, the demand for rare earth elements
continued to pick up due to the Malaysian Government’s
plans to implement a cost-efcient system for car vehicles.
Rising domestic chemical demand in Taiwan drove growthover the six-month period, thanks largely to the booming
private consumption and signicant acceleration in public
and private investment, while increased production and
global demand boosted employment. However, due to lack
of natural resources, Taiwan’s chemical industry faced
higher energy costs as it depends heavily on fuel imports.
A lack of attractive R&D incentives and booming US shale
gas discoveries continued to be major threats to Taiwan’s
chemical sector, causing a shift in focus to more original
products, advances in technology and strategic innovation
plans to gain competitive advantage.
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In the six-month period, major Asia-Pacic economies
performed moderately. The share prices of selected
companies’ assessed by Mergent from November 7, 2014,
to April 7, 2015, grew by an average of 9.57%, with LG
Chem Ltd and Sinopec Corp seeing double digit increases.
The share price of the region’s largest oil rener Sinopec
Corp (HKSE: 00338) closed at HK$3.18 (US$0.51) on
April 7, 2015, compared with HK$2.43 (US$0.39) on
November 7, 2014, reecting a 30.86% increase on the
Hong Kong Stock Exchange, while world’s largest lithium-
ion maker LG Chem Ltd’s (KSE: 051910) share price rose by 21.48% on the Korea Stock Exchange, from KRW188,
500 (US$169.65) to KRW229, 000 (US$206.1) on April
7, 2014.
Formosa Petrochemical Corp (TWN: 6505) saw its
share price increase by 3.22% in the six-month period
to NT$70.50 (US$2.21) on the Taiwan Stock Exchange
(TWN), compared with NT$68.30 (US$2.13) six months
earlier. Japan’s third largest chemical company Sumitomo
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Chemical Corp’s (TSE: 8053) share price rose 7.99% to
JPY 1317.50 (US$11.06) from JPY1220.00 (US$10.24).
Tata Chemicals Ltd (BSE: 500770) share price increased
on the Bombay Stock Exchange, by 8.94% from Rs418.55
(US$0.29) to Rs456.00 (US$7.34), due largely to the
fast growing demand form agriculture and for consumer
staples such as salt and pulses. The only company that
underperformed was giant oil rener Reliance Industries’
(BSE: 500325), whose share price dropped 15.05% from
Rs980.90 (US$15.79) to Rs833.20 (US$13.41) on the
Bombay Stock Exchange. The drop was due to lower crude
oil prices and volumes mainly in the rening and its oil andgas business.
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Taiwan’s second largest oil rener Formosa Petrochemical
Corp’s revenues for the year ended December 31, 2014
dropped 1.95% to NT$913.08 billion (US$28.57 billion),
from NT$931.33 billion (US$29.15 billion) a year earlier. Its
operating prot dropped 99% to NT$227 million (US$7.10
million) from NT$23.41 billion (US$0.73 billion), while
its net income dropped to NT$9.06 billion (US$0.28
billion) from NT$26.85 billion (US$0.84 billion), mainly
due to increased cost of revenue and selling, general andadministrative costs. The poor nancial result was largely
due to the global decrease in oil prices.
The world’s largest lithium-ion battery maker, South
Korean-based LG Chem Ltd’s (KSE: 051910) saw its
fourth quarter 2014 revenue total KRW22.57 trillion
(US$0.02 trillion), down by 2.4% from KRW23.14 trillion
(US$0.02 trillion) a year earlier. Net income declined
by 31.4% to KRW867.9 billion (US$0.78 billion) from
KRW1.26 trillion (US$0.001 trillion) a year earlier,
mainly due to poor demand from its major petrochemicals
markets, especially China, and slower growth in its
liquid crystal display sales. However, sales by its energy
solutions division outperformed those of other divisions,
due to increased polymer battery production and a wider
range of battery use. Operating income fell by 26.3%
from KRW1.66 trillion (US$0.0014 trillion) a year earlier
to KRW1.23 trillion (US$0.0011 trillion), due largely to
increased selling, general and admin expenses.
Japan’s third largest chemical company Sumitomo
Chemical Corp’s (TSE: 8053), in the nine months toDecember 31, 2014, saw its gross prot declined 23.40%
to ¥685.1 billion (US$5.75 billion), from ¥894.4 billion
(US$7.51 billion) a year earlier, while prot for the year
declined massively by 97.94% to ¥4.8 billion (US$0.04
billion) from ¥233.9 billion (US$1.96 billion) a year
earlier. The poor nancial result was mainly due to high
investment and operating activities within the nancial
period.
One of Asia’s largest rener, China Petroleum and Chemical
Corporation or also known as Sinopec Corp engaging in
segments such as chemical, petrochemical, petroleum,
natural gas, fertilizer and synthetic ber. In 2014, SinopecCorp’s chemical posted turnover, other operating revenue
and other income of RMB2.83 trillion (US$0.46 trillion),
a 1.9% decrease year-on-year, primarily due to the
price decline of crude oil and petrochemical products.
Confronted by severe market conditions with low chemical
products prices, the company reduced its feedstock costs by
increasing the light feedstock ratio, strengthening efforts in
R&D, production, and sales of new products, and adjusted
its product mix. The company reported operating revenue
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of RMB427.5 billion (US$68.91 billion) for its chemicalsegment, down by 2.3% from the same period a year ago,
due mainly to a drop in chemical product prices.
Tata Chemicals is a global India-based company that
involve in production and manufacturing of chemicals,
fertilizers and food additives. For the third quarter ended
December 2014, the company’s consolidated net sales
grew 5% from Rs4, 580.46 billion (US$73.7 billion)
in the previous corresponding period of 2013 to Rs4,
820.46 billion (US$77.6 billion). This is primarily due to
an improved business environment in India and oversea,
in particular the US. Despite the persistent ination and
weak investment climate, the company saw an impressive
growth in its net prot of Rs205 billion (US$3.3 billion) in
the third quarter 2014, 39% higher than the corresponding
period a year ago. This was mainly due to the robust
demand for soda ash in India.
The world’s largest producer of polyester ber and yarn,
and India’s largest petrochemical company, Reliance
Industries’ (NYSE: RELIANCE) saw its net revenues
decrease by 20.4% to US$15.3 billion in third quarter 2014,
compared with the corresponding period of 2013, due
mainly to a decline in the sales of petrochemicals, rening
and oil and gas businesses. Its third quarter net prot totaled
US$822 million, down by 7.7% from the same period a
year ago. The company, which operates the world’s largestrenery complex in Gujarat, has been investing heavily
in consumer-facing areas such as telecoms and retail to
expand beyond rening and petrochemicals.
@$#9$#3A B0C"*3*&*+%3 7%? D+*%& E$%&"#$3
A challenging and slowly recovering global economy led
to increased Asia-Pacic joint venture and acquisition
activity, as companies sought to optimize their business
portfolios by developing a strategic alliance to increase
prots and boost their market share values. In addition, due
to the steady regional trade and rebound in the fast-emerging
markets, the investors’ condence level has restored inorder to further expand their business relationship.
On April 1, 2015, leading Chinese oil rening, petrochemical
and new coal chemical engineering company, Sinopec
Engineering Group Co Ltd (HKG: 2386), and Exxon Mobil
Research and Engineering Company (EMRE) participated
in a cooperative development agreement (CDA) for
advancement of uid bed methanol to gasoline technology,
widely recognized as methanol gas (MTG) technology.
The CDA was to leverage the two companies’ expertise andexperience in methanol conversion to gasoline and uid
bed technology development to rene and commercialize
a uid bed version of the technology. Both companies
are developing the technology under the cooperative
development agreement with the intent to globally license
the technology. With more than forty years of R&D
experience in MTG technology, Exxon Mobil is looking
forward to continuing these efforts through its cooperative
agreement with Sinopec.
Exxon Mobil’s manager of technology sales and licensing,
Vince Alberico believes that once the technology is
successfully developed they anticipate it to have a strong
market competitiveness and broad marketability.
On February 3, 2015, Sumitomo Chemical Corp (TSE:
8053) agreed to acquire compound semiconductor
materials business of Hitachi Metals Ltd (TYO: 5486). The
acquisition was nalized on April 1, 2015 and the business
Sumitomo Chemical acquired from Hitachi Metals
included those of compound semiconductor materials,
such as gallium nitride (GaN) substrates, gan epiwafers,
and gallium arsenide (GaAs) epiwafers. The acquisition
allowed Sumitomo Chemical to expand its business of
GaN substrates and epiwafers for use in electronic and
optical components, for which the market has kicked off
on a full scale, while at the same time devoting its effortsto early commercialization of the products for use in power
devices.
In addition, the fusion of Hitachi Metals’ ample resources
and superior mass-production technology and Sumitomo
Chemical’s technological and other expertise will
accelerate the Company’s work for commercialization of
its next-generation GaN epiwafers that are currently under
development. As for GaAs epiwafers, which Sumitomo
Chemical has already commercialized, the company looks
to further strengthen its business foundation by making the
best use of a reservoir of each other’s resources. Sumitomo
Chemical positions the compound semiconductormaterials business for next-generation power devices as a
potential area in its long-term business portfolio for the IT-
related chemicals sector. The business acquisition further
reinforced the company’s relevant operations, and paved
way for it to become a leading company in the eld.
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6/32
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The Asia-Pacic chemical sector is the region’s largest
industry and among the most diversied worldwide, with
more than 70,000 products ranging from toiletries to
plastics, cosmetics, petrochemicals, pharmaceuticals and
fertilizer. For a decade, changing market dynamics have
spread global chemical production throughout Asia, mostly
to China and India, making China the world’s second
largest chemical producer after the US, and contributing to
Asia’s production levels overtaking those in Europe.
China’s chemical industry is the country’s third largest,
after textiles and machinery, and accounts for nearly 27%
of global chemical production, which generated revenues
of US$810 billion, excluding pharmaceuticals in 2013.
The National Development and Reform Commission
(NDRC) estimates there are 25,169 domestic chemical
companies that manufacture specialty chemicals, rubber
products, organic chemicals and synthetic materials and
that they enjoyed modest growth in 2013. Revenues totaled
RMB3.8 trillion (US$0.61 trillion), up by 13.2% compared
with RMB3.3 trillion (US$0.53 trillion) in 2012.
The Indian chemical industry is the country’s second largestindustrial sector, after IT, with nine broad segments: basic
chemicals, petrochemicals, fertilizers, paints, varnishes,
glass, perfumes, toiletries and pharmaceuticals. India’s
Department of Chemicals and Petrochemicals estimates the
industry, which accounts for more than 5% of the country’s
GDP, had an annual growth rate of 12.5% in 2013, and
generated net revenues of US$155 billion. India’s rising
standard of living and higher disposable income have
boosted growth in consumer spending, leading to higher
demand for chemical products.
Japan’s chemical industry is the world’s third largest in
terms of shipment and production, with the Japan ChemicalsIndustry Association (JCIA) reporting production was
worth US$338.2 billion in 2012, and the industry employed
about 880,000 people. However, the booming US shale gas
and oil industry has becoming a major feedstock threat to
Japan, so its chemical industry is intensifying its focus on
specialty chemicals and niche products.
Malaysia’s chemical industry is diversied, with seven
broad segments: oleo chemicals, petrochemicals, industrial
gases, agricultural chemicals and fertilizers, inorganic
chemicals, soaps and detergents and cosmetics and paints.
Its oleo chemical segment is one of the world’s largest,
accounting for 20% of global production. Malaysia
has the world’s 15th largest natural gas reserves and 28th
largest crude oil reserves, which make its petrochemical
and polymer industry the most important segment, with
investment totaling RM112 billion (US$31.33 billion) in
2013.
South Korea’s chemical industry is the world’s sixth largest
in term of production after those of China, the US, Japan,
Germany and Brazil. The industry is the country’s second
largest manufacturing sector and has four broad segments:
petroleum products, plastic resins, synthetic bers and
synthetic rubbers. The South Korean Government’s plan
to develop 100 core technologies that focus on green
chemistry and clean energy has attracted more than 470
foreign chemical engineering companies, helping develop
South Korea as a chemical hub. It has boosted foreign
direct investment (FDI) by US$7.5 billion from 2003 to
2013, and made the country the second highest recipient
of FDI.
Taiwan’s chemical industry remains vital to the country’s
economy, accounting for 29.5% of manufacturing GDP
in 2012, according to the American Institute of Chemical
Engineers (AIChE). It has 11 broad segments: base
chemicals, fertilizers, petroleum and kerosene products,
petrochemical intermediates, polymers, specialty
chemicals, pharmaceuticals, paper and printing inks,
synthetic bers, rubber and plastics.
Production Levels
Production growth in the Asia-Pacic region was betterthan that in Europe and the US, with China being the largest
chemical producer in 2013, and chemical production in
most Asian countries returning to pre-nancial crisis level.
However, there was a slowdown in China’s production,
growth due largely to surpluses after local and foreign
players’ massive investments in basic chemicals over the
previous ve years. Slowdowns in major Chinese industries
such as automotive, and construction also curbed chemical
production growth in 2013.
Industry Size and Value
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The American Chemical Council estimates Asia-Pacicchemical production, excluding pharmaceuticals rose
by 19%, higher from that in 2012, thanks largely to easy
credit policies, positive agricultural performance and
higher demand for industrial chemicals for infrastructure
development. The improving global economy and an
emerging middle class led to higher demand for goods from
Asia’s electrical and electronics, agricultural, construction
and automotive sectors, bringing growth to the chemical
industry in 2013.
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Despite the sluggish economy, there were several major
investments in the Asia-Pacic chemicals sector in thesecond half of 2014. In November 2014, Asia’s largest
chemical producer Formosa Plastic Group (TWN: 6505)
announced its decision to pour an addition US$2 billion
into its US investment projects. In a move motivated by the
cheaper supplies of natural gas, the company’s expansion
in the US has led to the group constructing and purchasing
numerous PVC factories and chemical production facilities
in the country.
In December 2014, Leading South Korean chemical
company LG Chem Ltd reported it would invest KRW320
billion (US$304 million) to expand its crude acrylic acid
(CAA) and super absorbent polymers (SAP) plants bySeptember 2015. CAA is used as a raw material for diapers
and SAP is used in paints. The expansion is expected to
boost LG Chem’s annual production capacity of CAA by
160,000 tonnes to 510,000 tonnes, and of SAP by 80,000
tonnes to 360,000 tonnes.
Also in December 2014, major Indian oil rener Reliance
Industries (NYSE: RELIANCE) announced plans to invest
Rs4 billion (US$644 million) in polyester value chain to
increase the capacity from 7.5 million tonnes to 15 milliontonnes. The company is expanding its entire value chain
of polyester including puried terephthalic acid (PTA),
the preferred raw material for polyester. Polyester ber
manufacturers in India have been importing large quantities
of PTA, as a gap exists between demand and supply.
Tata Chemicals Ltd announced in December 2014 that
it plans to invest Rs150 million (US$2.42 million)
into setting up a nutraceuticals manufacturing facility
in Sriperumbudur, Channai which is expected to be
completed in the next three years. The investment is in line
with the company’s strategy to focus on the farm solutions
and food products business. Tata expects its branded and
non-commodity business, which is at 22% of turnover, to
increase to 50% in the next seven years.
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Polyethylene glycol (PEG) has recently begun to
experience growth in the global market as one of the top
lubricating agents. With the progressive development of
the pharmaceutical industry in countries such as China,
Brazil and India, the market demand for PEG is expected to
rise due to its non-toxic, resistant, and physical properties
such as its solubility in organic solvents. As a result, this
polyether compound has also become increasingly popular
in construction, automotive, and marine industries for use
in water-based coatings, paints, and inks.
For the last two years PEG has been increasingly used in
the medical industry as a dispensing agent, solvent, tablet,
and ointment, accounting for more than 40% of market
share, according to report by Grand View Research Inc.
Having also gained popularity in pharmaceutical and
biotechnological applications, these compounds are useful
as thickeners, moisturizers, and softeners in cosmetics.
However, the existing health and environmental concerns
that come with the addition of PEG into personal care
products are expected to abate market growth.
China and India are currently the fastest growing
pharmaceutical, automotive, and construction sectors
globally, making the Asia-Pacic one of the largest
markets for PEG. Throughout the rapid industrialization
in this region over the past ten years, there has been a
steady demand for PEG and these trends are anticipated
to continue over the long term period. The key players in
the global market consist of BASF SE, The Dow Chemical
Company, Ineos, Liaoning Oxiranchem, Jiangsu Haian
Petrochemical Plant, India Glycols, and Taijie Chemical.
Having just announced the Draft National Chemical Policy
in 2012, the Indian Government aims to improve domestic
chemical production output, and consequently raise the
country’s share in the global chemical industry by two-
fold, from 3% to 6% within 2013 and 2020. This is likely
to augment PEG market demand in the years to come.
Rising Demand for Automobile Adhesives
Adhesives, one of the most versatile binding agents
available on the market today, has a long-established usage
in industries involved with building and construction,
packaging, and transportation. Consequently, the
market for adhesives has thus become impervious to
the general slowdown in economic activity. Major Asia-
Pacic economies spearheading the commercial vehicle
production industry, particularly China and India, are
the largest consumers of adhesives in the global market.
With a predicted compound annual growth rate (CAGR)
of 3% between 2014 and 2019, the regional demand for
substances such as epoxy, polyurethane, and acrylics,
is thus expected to grow, according to gures by the
Chemicals and Petrochemicals Manufacturers Association
(CPMA).
Acrylic-based adhesives, which made up 35% of the total
volume in the region in 2013, is the leading product segment
in the regional market due to its quick-setting properties,
environmental resistance, and stronger adhesion to hard-
to-bond substances. Forecasts for 2014 to 2020 estimate
the CAGR to be approximately 3.5%, making acrylic-
based adhesives the fastest growing product in the region,
according to RnRMarketResearch.
World leading automotive adhesive solutions supplier
Henkel (OTCMKTS: HENKY) claims ownership to the
largest adhesives factory in the world located in Shanghai,
China. In July 2014, Henkel Asia-Pacic released Loctite
4090, its rst hybrid adhesive designed with strong and
rapid bonding properties. About a month later, Henkel
collaborated with the organizers of the Federation
Internationale de l’Automobile (FIA) Formula E Team
China Racing to feature exclusive electric-powered
Formula cars designed to promote sustainable technology.
China continues to play a leading role as the world’s
largest automotive market in terms of production and
population. As part of their development plan for fuel-
efcient and new energy cars, the Chinese government
aims to hit a total market volume of ve million cars by the
year 2020, according to the National Bureau of Statistics.
Manufacturers are thus promoting hybrid body structures
composed of plastic and composite materials combined
with traditional steel and light alloy components. Due to
their ability to secure hard-to-bond substrates, the demand
Polyethylene Glycol Presents Opportunities in Asia
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for adhesives is expected to increase along with thecountry’s growing “New Energy Vehicle industry”.
The Asia-Pacic is the Fastest Growing Region for
Aerosol Propellants
Aerosol propellants, which are widely used in products
such as spray paints, air fresheners, and deodorants, have
experienced a signicant growth in the global market. As
these propellants are increasingly used in personal care
products, such as personal hygienic items and cosmetics,
consumer demands are expected to drive market growth
throughout the years to come.
The aerosol propellants industry consists of different
segments, such as CFC, dimethyl ether (DME) and
methyl ethyl ether, nitrous oxide and carbon dioxide, and
hydrocarbons. Hydrocarbon propellants, which are highly
stable and less toxic compared to other propellants, account
for the majority of market volume and are supported based
on the guidelines of the US Environmental Protection
Agency (EPA). These organic propellants are said to have
zero ozone depletion potential, and due to their short
atmospheric residence times are expected not to have any
signicant impact on global warming.
As a result, there has been a growing demand forhydrocarbons to be used in products such as hairsprays,
antiperspirants, styling mousses, and shaving creams,
which is expected to play a major role in driving market
growth.
In the next six years, the Asia-Pacic will be the
fastest growing region in the global market for aerosol
propellants due to increasing awareness, consumer
income, and product demand, according to Chemical
Market Associates Inc (CMAI). A change in lifestyle of
the general population has also resulted in an increase in
personal care product use among the younger generations,
primarily from countries such as China and India, whichis expected to have a positive impact on overall market
growth. Older generations have also contributed to
the increasing demand for propellants due to the use of
aerosols in anti-ageing cosmetics.
Several large corporations that play key roles in the global
market, such as Lindal, Aeropress, Honeywell, and Bayer
Material Science AG, have begun to introduce more
environmentally-friendly propellants that offer lower
volatile organic compound (VOC) formations at lowercosts which are expected to broaden opportunities for the
market in the years to come.
Market Outlook
The outlook for the Asia-Pacic chemical industry is
expected to remain stable over the next six months, with
China poised to lead growth due to a steady economy,
abundant supply of feedstock and a favorable labor
market. Mergent believes that China’s chemical industry is
maturing and entering a phase of slower but solid growth,
supported by its petrochemical industry, which is one of
the largest consumers and importers over the past decade,and is expected to maintain its growth momentum, driven
by key products such as polyethylene and polypropylene.
Chemical production in China is forecast to rise by 8.5%
in 2015, compared with 8.8% in 2014, according to data
by the China Petroleum and Chemical Industry Association
(CPCIA)
India’s chemical industry is expected to see double-digit
growth in 2015 with sales is estimated to reach US$150
billion 2015, according to gures by the Indian Chemical
Council. Many of the fundamentals that support chemical
industry in the country, such as urbanization, higher GDP
growth, and a growing middle class, is expected to increasedemand. Furthermore, the Indian government is expected
to introduce and implement several policies and special
economic zones centered on the petrochemical sector
to attract foreign and private investment and make the
industry more progressive.
Chemical growth in Japan also has a promising outlook,
with chemical production expected to grow by 1.5% in
2015 and 2.2% in 2016, compared with 1.4% in 2014.
A strong rebound in the industrial and construction
sectors continued to contribute to the growing demand
for Japanese chemicals such as adhesives, paints and
coatings, while a weakening yen is expected to promoteexport growth.
Taiwan and South Korea’s chemical industries are likely to
expand over the next six months as continuous R&D efforts
should boost trading activities and market share, despite
challenges linked to structural issues in their economies.
Some of the more emerging chemical industries in the
region such as Vietnam and Indonesia are expected to
record strong growth.
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Asahi Kasei is one of Japan’s top three chemical producers
in diversied segments such as basic chemicals, plastics,
fertilizers, construction materials, bers, electronicmaterials and medical products. The company continues to
enjoy huge growth in net sales, thanks largely to favorable
performances in its homes segments and higher chemicals
and pharmaceuticals sales volumes, while the weaker yen
helped boost exports.
For the scal rst nine months ended December 31, 2014,
Asahi Kasei’s net sales rose 5.83% to ¥1.47 billion (US$
billion) from ¥1.39 billion (US$0.38 billion) in the same
period of 2013, while operating income rose by 148%
to ¥118.7 million (US$0.99 million) from ¥47.8 million
(US$0.40 million). Its ordinary income grew to ¥127.3
million (US$1.06 million) from ¥53.1 million (US$0.44million) and net income grew by 127% to ¥88.4 million
(US$0.74 million), compared with ¥38.9 million (US$0.32
million) a year earlier.
Asahi Kasei plans to invest billions of yen to its subsidiary
“Fuji Branch” for production equipment and aims to
generate revenues of about ¥30 billion (US$0.25 billion)
by 2020. Its production materials will be purchased from
US Crystal IS (a private company), which it acquired in
2011.
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Tokyo-based Shin-Etsu Chemical is one of the world’s
largest suppliers of semiconductor materials, semiconductor
silicon, polyvinyl chloride (PVC) resins, synthetic quartz
glass, methyl cellulose and electronic materials. It operates
in three segments: organic and inorganic chemicals,
electronic and functional materials, and others.
Its fourth quarter 2014 revenue was ¥1.16 billion (US$
billion), compared with ¥1.02 billion (US$0.0085 billion)
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Lucky Goldstar Chemical Ltd, or LG Chem Ltd, is the world
largest lithium-ion battery maker and makes diversied
products including cosmetics, personal care products,
petrochemicals, pharmaceuticals and specialty chemicals.
It has 21,966 workers in South Korea and operates in
Europe and the Americas. Although its business outlook has
been affected by slow global economic recovery affecting
demand for its petrochemicals, it remains a leading global
producer.
In fourth quarter 2014, its revenue totaled KRW22.57trillion (US$0.02 trillion), down by 2.4% from KRW23.14
trillion (US$0.02 trillion) a year earlier. Net income
declined by 31.4% to KRW867.9 billion (US$0.78 billion)
from KRW1.26 trillion (US$0.001 trillion) a year earlier,
mainly due to poor demand from its major petrochemicals
markets, especially China, and slower growth in its liquid
crystal display sales.
However, sales by its energy solutions division
outperformed those of other divisions, due to increased
polymer battery production and a wider range of battery
use. Operating income fell by 26.3% from KRW1.66
trillion (US$0.0014 trillion) a year earlier to KRW1.23
trillion (US$0.0011 trillion), due largely to increasedselling, general and admin expenses. LG Chem is focused
on producing more high-prot petrochemical products and
diversifying its IT and electronics materials, producing
new OLED and touch materials.
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SK Innovation is a leading energy provider with
subsidiaries SK Energy Co, SK Global Chemical Co
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and SK Lubricants Co producing chemical lubricants, petroleum and petrochemicals. The SK Group is the third
largest conglomerate in South Korea that owns 113 ofces
with 70,000 employees worldwide.
The prolonged volatility in oil prices has affected demand
for its oil products making its 2014 outlook less favorable.
In second half 2014, its operating income totaled KRW1.06
billion (US$0.00095 billion), compared with KRW733.20
million (US$0.65 million) a year earlier. Operating prot
rose 69.26% to KRW923.60 million (US$0.83 million)
from KRW550.98 million (US$0.49 million) a year earlier.
Net income declined to KRW111.25 million (US$0.10
million) from KRW376.30 million (US$0.33 million).
With an on-going but slow global economic recovery, the
company expects growth in its rening margins and a better
performance by its lubricants business. The establishment
of strategic business relationships and capacity expansions
should continue to build up SK Innovation values.
In January 2014, SK Innovation formed a joint venture,
Beijing BESK Technology, with China’s state-run Beijing
Automotive Industries Holdings (private company) and
Beijing Electronics Holding (private company), the
world’s No.5 LCD manufacturer. The company stated that
the collaboration will be a catalyst to expand its market
share in the China’s fast-emerging electric vehicle (EV)market as China is expected to become the world’s single
largest EV market in 2020 with Beijing policy to increase
subsidies to EV buyers.
Market Outlook
South Korea’s chemical industry is gradually evolving
to become leader in the world market. However, new
investments in energy resources, a shift to higher-value-
added products, and development of major environmental
friendly technologies are needed for South Korea to
improve with the most advanced chemical economies.
Despite the slowly improving global economic climateand the booming US shale gas industry, the outlook for
South Korea’s chemical industry looks fragile over the
next six months due to continuous volatility in crude oil
prices and a new wave of challenges in adapting advanced
technologies. The stronger Korean won, which has reduced
exporters’ dollar earnings, will also restrain prot growth.
However, with South Korea paying more attention to
its petrochemicals business, there is hope for further
strengthening of the chemical industry in the next sixmonths. Toward the end of 2015, South Korea will have
more ethylene plants in an annual production capacity of
more than 300,000 tons.
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Formosa Plastics Corp (FPC) is one of the world’s leading
petrochemical and polyvinyl chloride (PVC) resins
manufacturers. Its revenues for year ended December 31,
2014 totaled NT$216.58 billion (US$6.77 billion), up by
0.5% from NT$215.42 billion (US$6.74 billion) a year
earlier, thanks largely to increased demand for its PVC,
polyethylene (PE) and polypropylene (PP) after it restarted
its vinyl chloride monomer (VCM) plant in Kaohsiungand its PE plant in New Taipei. Operating income rose to
NT$5.51 billion (US$0.17 billion) from NT$4.58 billion
(US$0.14 billion) a year earlier. Despite a good operational
and revenue results, net income fell by 13.41% to NT$17.99
billion (US$0.56 billion) from NT$20.72 billion (US$0.64
billion) due to high income taxes.
In August 2013, Formosa Plastics established a US$1.15
billion joint venture with Australia’s third largest iron
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This report looks at the chemicals industries in the Asia-Pacic, with a focus on China, India, Japan, Malaysia, South
Korea and Taiwan. The report examines the current environment in the sector, proles the industry and discusses market
trends and outlook. The key nancial results for leading companies in each country sector, as reported by the company,
are represented in the comparative data tables on proceeding pages.
Research analysts draw on a range of credible industry and company data sources as well as news and information
services to research and analyze the current trading environment, industry landscape and market trends and outlook for a
particular sector. Primary sources are used, unless otherwise indicated, and include company data, e.g. annual reports and
company nancial results: macroeconomic and trade data; data information from global and country regulatory, industry
and trade bodies; government data; and reports from industry organizations and private research organizations.
Industries covered by the industry reports are dened by standard industry classication systems and leading companies
are identied on this basis. The following SIC codes are relevant to the industry: 2812 (Alkalies and Chlorine); 2813
(Industrial Gases); 2816 (Inorganic Pigments); 2819 (Industrial Inorganic Chemicals); 2821 (Plastics Material andSynthetic Resins, and Nonvulcanizable Elastomers); 2822 (Synthetic Rubber); 2823 (Cellulosic Man-Made Fibers); 2824
(Man-Made Organic Fibers, Except Cellulosic) 2841 (Soaps and Other Detergents, Except Specialty Cleaners); 2842
(Specialty Cleaning, Polishing and Sanitary Preparations); 2843 (Surface Active Agents, Finishing Agents, Sulfonated
Oils, and Assistants); 2844 (Perfumes, Cosmetics, and Other Toilet Preparations); 2851 (Paints, Varnishes, Lacquers,
Enamels, and Allied Products); 2861 (Gum And Wood Chemicals); 2865 (Pigments); 2869 (Industrial Organic Chemicals);
2891(Adhesive And Sealants); 2892 (Explosives); 2893 (Printing Ink); 2895 (Carbon Black); 2899 (Chemicals and
Chemical Preparations); 2873 (Nitrogenous Fertilizer); 2874 (Phosphatic Fertilizers); 2875 (Fertilizers, Mixing Only);
and 2879 (Pesticides and Agricultural Chemicals).
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Global and Regional
American Chemical Society (ACS)
The primary US professional organization for chemists and related professionals.
http://www.acs.gov
American Chemistry Council (ACC)
The association represents the US chemical industry on public policy issues; it also conducts research and administers the
industry’s environmental, health and safety program.
http://www.americanchemistry.com
Asian Development Bank
A membership development nance institution engaged in promoting the economic and social progress of its developing
member countries in the Asian and Pacic regions.
http://www.adb.org
Chemical Market Associates Inc (CMAI)
A research and consulting rm that offers services for petrochemical companies worldwide.http://www.cmaiglobal.com
Organisation for Economic Cooperation Development (OECD)
The OECD group’s 30 member countries share a commitment to democratic government and the market economy. The
OECD plays a prominent role in fostering good governance in the public service and in corporate activity.http://www.oecd.org
World Trade Organization (WTO)
The global international organization dealing with the rules of trade between nations that aims to liberalize trade, negotiatetrade agreements and settle trade disputes.
http://www.wto.org
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A leading agency controlled by the government-run State Information Center that provides information about the nation’seconomic activities.
http://ce.cei.gov/cn
China Petroleum and Chemical Industry Association
The trade association that represents the petroleum and chemicals industry in China.http://www.cpcia.org.cn
China National Chemical Information Center
The center is a branch of the National Engineering and Technology Library that provides comprehensive informationresearch, information services and computer application technology development for China’s chemical industry.
http://www.cncic.gov.cn
National Bureau of Statistics
A government ofce that provides general and economic data.
http://www.stats.gov.cn/english/
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National Development and Reform Commission
A trade department of the State Council with a mandate to develop national economic strategies, long-term economic plans and annual plans, and to report on the national economy and social development.
http://www.ndrc.gov.cn
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Chemicals and Petrochemicals Manufacturers Association (CPMA)
CPMA is the apex forum representing the Indian Petrochemical Industry. It provides real-time linkages between the
industry, the Government and the society.http://www.cpmai.net
Confederation of Indian Industries (CII)
An industry whose goal is to create and sustain an environment conducive to the growth of industry in India and partnerwith industry and the Government.
http://www.ciionline.org
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A government agency that formulates policies related to foreign trade, including import and export policies, multilateral
and bilateral commercial relations, state trading and export promotion measures.http://commerce.nic.in
Indian Chemical Manufacturers Association
An association that fosters and promotes the development of the chemicals industry to government.
http://www.icmaindia.com
Indian Plastic Federation
A body formed to represent various interests of India’s plastic industry.
http://www.plasticfederation.org
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Ministry of Economy, Trade and Industry (METI)A government agency that overseas and implements economic and trade policy in Japan and provides information on
various industries in Japan.http://www.meti.go.jp
Ministry of Finance
The Ministry of Finance is responsible for developing Japan’s scal and monetary policies to provide guidance for thenational economy.
http://www.mof.go.jp
Japan Foreign Trade Council Inc
A private sector organization that engages in a wide range of activities with the objective of contributing to the prosperity
of Japanese economy and the enhancement of international society through trade.http://www.jftc.or.jp
Malaysia
Chemical Industries Council of Malaysia (CICM)
CICM is the umbrella body that represents chemical groups (ranging from oleochemicals, paints, cosmetic and toiletries,fertilizers, petrochemicals, agriculture chemicals, industrial gases and pharmaceutical sectors), following restructuring in
2001 to establish a stronger and better representation of the Malaysian chemical industry.http://www.cicm.org.my
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Ministry of Industrial Development Authority (MIDA)
MIDA is the Malaysia Government’s principal agency for the promotion and coordination of industrial development
in Malaysia. It is often the rst point of contact for investors who intend to set up manufacturing and related services projects in Malaysia.
http://www.mida.gov.my
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Bank of Korea (BoK)
The country’s central bank issues South Korea currency, coordinates monetary policy, maintains price stability and
manages foreign exchange reserves.http://www.bok.or.kr
Korea International Trade Association (KITA)
A trade organization that provides trade information, tariff schedules and statistical data about South Korea’s majortrading partners.
http://www.kita.org
Korea Petrochemical Industry Association
The trade association that represents the petrochemicals industry in South Korea.http://www.mofe.go.kr
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The American Institute in Taiwan is a private, non-prot corporation established to promote relations between the US
and Taiwan.http://www.ait.org.tw
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The ministry is responsible for administering industry, commerce, trade and international cooperation, small and mediumenterprises, investment, intellectual property, technological research and development, energy, water resources, mining,
standards, inspection, weights and measures and subsidiary enterprises.http://www.moea.gov.tw
Photonic Industry and Technology Development Association (PIDA)
PIDA works with private enterprises and government agencies to improve the competitiveness of Taiwan’s optoelectronics
industry.http://www.pida.org.tw
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• Automotive• Aviation• Banking• Biotechnology• Chemicals
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