The Focused American Companies

While this chapter concentrates primarily on the ten focused chemical companies, it also considers the evolution of a comparable set of specialty enterprises, the specialized engineering firms (SBFs). After World War II, the SBFs designed and built a substantial number of chemical processing plants around the world. These firms had the potential to become focused core companies, but in the United States, at least, only one such firm. Scientific Design, made the attempt, which proved unsuccessful. 

Rohm and Haas 1909 3.2 Resins and then acrylic-based products 

Air Products and Chemicals 1940 2.9 Industrial gases, beginning with oxygen, followed by hydrogen, nitrogen, etc. 

Great Lakes Chemical 1933 1.7 Bromide-based products 

Water-soluble To become a multisectored core firm polymers and by diversifying into basic polymers specialty in 1950s, and to higher value-added 

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The crisis had less of an impact on the focused American companies and the multisectored European competitors. The Europeans had completed their reentry into the U.S. market during the 1970s and experienced little pres-... 

Chapter 4 considers the focused American chemical producers that competed in specialized niches, making specialty chemicals for a variety of markets and purposes. These companies had the best record of technological and financial success during the industry s troubled years in the mid-1970s and early 1980s. 

By the end of the 1920s, the five had successfully commercialized products in five to seven of the SIC industrial chemical categories. During the same decade of the 1920s, most of the smaller focused (specialty) companies had been established. They not only provided essential chemicals to the major American companies but also for customers in a wide variety of other industries. By the end of the 1920s, the infrastructure of the U.S. chemical industry had been completed. 

From their beginnings, the other smaller focused companies played critical roles in the evolution of the U.S. chemical industry. Established in the 1920s, they provided the major American chemical companies with a variety of specialty chemicals needed to support the U.S. industry. At the same time, these specialty chemicals found a multitude of uses in many other industries. As a result, the focused companies became and remained central players in the competitive arena in which the strategic boundaries of the chemical companies were defined. 

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. ... 

As the American companies focused on specialty chemicals, their European counterparts—primarily the Rhine Valley companies—continued to serve multiple major markets. Following World War I, the German Big Three quickly returned to world markets under the leadership of I. G. Farben, as did the Swiss with their comparable Basel AG. Neither the British nor the French responses of the 1920s—the formation of Imperial Chemical Industries (Id) and the merger of Rhone and Poulenc—proved able to surmount the quickly restructured barriers. 

American companies became interested in the process during the war and initiated a substantial research program. Since production of specific alcohols was desired, more attention was focused on the use of narrow cuts of individual olefins in contrast to the mixed feeds employed by the Germans. The first commercial plant in the United States was constructed by the Standard Oil Company at Baton Rouge, La., in 1949. The main product from this plant is isooctyl alcohol produced from a heptene feed. As shown in Table 11-9, additional plants have been constructed by other large petrochemical companies, and the combined annual capacity at the end of 1956 exceeded 100 million lb of alcohols. In addition to isooctyl alcohol, the American plants produce normal and isobutyl aldehydes and alcohols, decyl and tridecyl alcohol. ... 

World production of vinyl acetate monomer was 4 x 10 t in 1999. This represented 84% of the total capacity. In 2002, North American companies produced 1654 X 10 t of vinyl acetate. See Table 5 for producers and their capacities (22). The dominant method of production in North America is by the reaction of ethylene with acetic acid and oxygen in the presence of palladium catalyst. New construction in recent years has been focused in southeast asia, although European and North American producers have expanded their plants. 

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