The American Competitors

I begin by reviewing the largest and most significant of the American chemical industry s domestic competitors, the oil and gas companies. 

Four of these dozen companies—the forerunners of Exxon (Jersey Standard) and Chevron (Standard of California or Socal) and Shell and Phillips— began to lay the foundation of the petrochemical industry before the outbreak of World War II. These long-established petrochemical companies were very much pioneers among their competitors. As Williams Haynes, the chemical industry s historian, observed in the early 1940s, Production of chemicals by the petroleum industry appeared to be economically and technically sound, but most petroleum executives could not see what appeared to them to be a tiny market for a multitude of chemicals produced by a complexity of operations and sold to a long and diversified list of customers, tasks for which they had neither the technical nor the sales staff.  

Entering the Chemical Industry The First Movers and Followers 

Meanwhile, Standard Oil of California, lacking Shell s technological capability, developed agricultural and horticultural insecticides through the acquisition in 1931 of the California Spray Chemical Corporation. In the 1930s Standard Oil of California began producing by-products, primarily naph-thalic acids and derivatives.  

The entry of the petroleum companies into the polymer/petrochemical revolution proved a critically important development and required significant upgrading of their technological capabilities. The entry can be dated by the delivery of experimental high-octane gasoline in 1934 by Shell to the Army Air Force at Wright Field. Within a year. Shell, Jersey Standard, and Phillips 

---

Chapter 6 deals with the American competitors in petrochemicals. Nearly all were major petroleum companies that had been established before World War 1. They played an important role in commercializing products originating in the polymer/petrochemical revolution. Several attempted unsuccessfully to compete with the major chemical companies in polymer-based products. By the 1980s, however, several netted 25-30 percent of their profits by producing basic feedstocks and polymers. 

I now turn again to the American competitors listed in Table 1.1. Chapters 3-5 have covered twenty-six of the fifty companies listed in the table. Chapter 6 considers the evolution of the remaining twenty-four chemical companies. 

The smaller European companies evolved by concentrating on their home markets and European ones, and the Japanese likewise focused on their home market and other East Asian ones. These European and Japanese firms often licensed products from and had alliances with U.S. core companies and startup entrepreneurial firms, just as the American competitors did with European and Japanese pharmaceutical companies. Two of the Japanese companies developed from centuries-old roots. Indeed, Takeda began in 1781, and Shionogi nearly a century later in 1871. The third, Sankyo, was formed in the late nineteenth century as Japan began to industrialize and trade with Western nations. In 1898, Parke Davis penetrated Japan, employing Sankyo as its local marketer. The fourth firm, Yamanouchi, was the youngest, established in 1923. ... 

Fig. 3.13 The ACE50 method demonstrated for a mixture of ligands at 1 tM per component to the M2 receptor at 5 pM concentration. (A) NGD-3350 requires the greatest competitor concentration to be competed from the receptor, indicating that it is the highest affinity ligand. (B) Ratio plots indicate direct binding competition with atropine. (C) Select compound structures. Reprinted from [39] with permission from the American Chemical Society.

The Germans U.S. subsidiaries suffered less from the industry s crisis at the end of the 1970s and early 1980s than did their American competitors. Only recently having completed their initial reentry into the American market after World War II, they had not diversified in the manner of many American companies and so did not need to redefine the boundaries of their capabilities. Instead, they concentrated on reinforcing their strong product lines. 

Unlike the Swiss Rhine Valley companies, Solvay and Henkel maintained their focus in chemistry successfully over more than a century of their existence. Solvay increasingly became, after the 1970s, a specialty chemical company along the lines of the American focused companies while Henkel remained one of the three worldwide competitors in both consumer and industrial cleaning products. 

---