Chemical Companies - Research Paper Example

Expenditure in research and development by firms globally summed up to 344bn pounds among the countries with heavy investments in this sector such as Japan, Us, Germany, France Switzerland and the UK. These countries through the respective corporations contribute to a tune of over 82% of the spending in R & D. among the largest sectors with huge spending in R & D globally are the pharmaceuticals company, electric and electrical equipment as well as chemical companies as indicated by a registered growth in their spending on the same.

(Shield, Beth, and Miriam pg. 45). On the other hand capital expenditure by firms has never seemed so controversial nor important. Together with R & D, capital spending is the long-term lifeblood of many corporations as it determines the ability of most corporations to generate cash flows enough to service their debts. It is quite hard to determine the capital expenditure of most companies if not all as this is the aspect that results into a variety of risks in the business in form of cash flows, competitive position, as well as the ability to price.

According from evidence shown by statistics, the top capital spenders also come from the chemical and energy industry and they include corporations from china, south America like Brazil and a great deal of corporations from Europe (Frith pg. 144-8). In Europe the chemicals, plastic and rubber sectors forms a bigger part of the industrial sector generating over 3.2million employment opportunities yearly. It is in record that since the year 2000, the chemical sector in Europe has dominated the manufacturing sector by over 2/3.

Among the top 50 ranked corporations is the German giant chemical producer BASF with a sale of $79.8 million, which is even an improvement from the previous period’s sales. The company through its management continues to even have more prospects of growth through increased production despite the looming economic tenacity (Festel pg. 88). A combination of the sales figures for the 50 surveyed firms shows a total of $961.8 billion. This figure indicates how much the chemical industry controls the transactions that take place worldwide.

The domination of firms in the chemical industry is the same in the developed countries as it is in the developing countries. Chinese giant Sinopec recorded revenue of $56.4 billion and is ranked at number three worldwide and came closer to even being the number two chemical producer in the whole world (Kain pg. 167-9). Among the top three in terms of capital expenditure as well as research and development is the Dow Chemical at position two in the whole world. Sabic also follows in the list in that order with revenue of $42.

2 billion and takes position 5 among the chemical producers. It is worth recording that these firms have shown tremendous progress through dynamic performance in their previous past operations. They have come a long way in which SABIC was all the way number 13 in the whole world to become number five. At the same time, SINOPEC was all the way number 14 and look at its ranking today (Shield, Beth and Miriam pg. 92-4). As compared to the year before,