PwC Report: Shale Gas - Reshaping the US Chemicals Industry


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A reported published in October 2012 by PricewaterhouseCoopers looking at the profound effect the shale gas industry is having on the chemical industry in the U.S. The report provides a detailed look at how shale gas is impacting chemicals economically. 16 pages

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PwC Report: Shale Gas - Reshaping the US Chemicals Industry

  1. 1. Shale gas Reshaping the US chemicals industryOctober 2012A current look at the chemicalsindustry value chainAt a glanceThe impact of shale gas ondomestic chemical companieshas been to decrease thecosts of both raw materialsand energy.It is estimated that theUS chemicals industryinvestment in ethyleneproduction, has increasedcapacity by 33%. As theseinvestments take hold,yielding more supply, theUnited States could becomea major, global, low-costprovider of energy.Volumes from natural gasseparation plants expected toincrease more than 40% overthe next five years.
  2. 2. In a recent PwC report on the For manufacturing companies,Executive summary potential impact of shale gas on US the initial opportunity has been in manufacturing, it was stated that supplying products and services by 2025, shale gas could add more to support shale gas expansion. than 1 million workers to the US Subsequently, they may be able to manufacturing industry and allow take advantage of low-cost chemicals US manufacturers to lower their to create plastic-based substitutes raw materials and energy costs by as for other materials, such as metal, much as $11.6 billion annually.1 This glass, wood, leather, and textiles. For potential is based on the United States’ manufactured products with a high abundant supply of shale and the chemical content, such as automotive country’s technological innovations bumpers, plastic sheets and panels, in mining, which could enable the electronic components, and packaging production of an inexpensive source films, lower natural gas prices could of energy for the foreseeable future. provide a strong economic incentive for While shale gas reserves are being US manufacturers to reverse offshoring explored in many parts of the world, of manufacturing activity and build only the United States has been able production facilities in the United to commercialize production on a States. Longer term, lower energy costs large scale. could help revive manufacturing in the United States and positively affect For chemical companies, the impact the competitive position of American of shale gas has been to decrease manufacturing. the costs of both raw materials and energy. The price of US natural gas has declined from $12.50/MBTU in 2008 to approximately $3.00/MBTU in 2012, and prices are expected to decline further, at least in the short term, as a result of excess inventory.2 Based on industry reports, we estimate that the US chemicals industry has invested $15 billion in ethylene production, increasing capacity by 33%. As these investments take hold, yielding more supply, the United States could become a major, global, low-cost provider of energy and feedstocks to the chemicals industry. 1 PwC, “Shale Gas: A renaissance in United States manufacturing?” 2011 2 “US Shale Oil-Gas Production Potential 2: Shale could greatly cut oil imports, if US gas markets are developed,” Oil & Gas Journal, Sept. 3, 2012, 961 Shale gas: Reshaping the US chemicals industry
  3. 3. Advances in horizontal drilling and The actual amount of recoverableIntroduction fractionation of shale gas basins shale gas is up for debate, as are the in North America are altering the safest and most ecological ways to chemicals industry value chain, access the reserves. Nevertheless, it constituting a potential game-changer has become clear that the United States that could affect the entire energy has abundant, easy-to-access shale gas industry. Recent technological reserves, which has resulted in huge developments in North American shale investments by upstream industry gas drilling have the potential to yield participants in shale gas drilling, 862 trillion cubic feet of technically ethane manufacturing assets, natural recoverable shale gas in the United gas pipelines, processing equipment, States, as PwC reported in “Shale Gas: and storage and transportation A Renaissance in US Manufacturing,” facilities for natural gas liquids.3 published in December 2011. The shale gas boom could change the competitive landscape for value chain participants. In this analysis, we examine the immediate and longer- term effects on the chemicals industry. 3 BENTEK Energy and Turner, Mason & Company, “The Great NGL Surge!” Nov. 11, 2011 2
  4. 4. A low-cost and abundant The chemicals industryImpact of shale gas fuel and feedstock source value chainon the chemicals Prices of natural gas in the United The NGL from shale gas productionindustry value chain States have dropped sharply as a result is used by the chemicals industry to of its availability in shale formations produce a variety of derivatives and and the technological advancements products that ultimately become raw in horizontal drilling and fractionation materials for multiple manufacturing techniques to access it.4 These sectors, as depicted in Figure 1, which advancements have boosted efficiency features the ethane chain. in obtaining natural gas from shale, As the chemicals industry ramps up its including formations rich with natural ethylene capacity and corresponding gas liquids (NGLs). downstream ethylene derivative Before natural gas can be transported products, the impacts could flow efficiently and sold commercially, its through the value chain into other impurities must be extracted. The manufacturing sectors and, ultimately, by-products of this extraction process, to finished products. Our analysis will known as NGLs, include hydrocarbons use the ethane chain to highlight these such as ethane, butane, and propane, potential changes. which are valued as raw materials in the petrochemical markets. With the increase in natural gas production comes an increase in NGL production, with volumes from natural gas separation plants expected to increase more than 40% over the next five years, reaching more than 3.1 MMBD in 2016.5 4 “Petrochemicals,” Chemical Week, March 27, 2011 5 BENTEK Energy and Turner, Mason & Company, “The Great NGL Surge!” Nov. 11, 20113 Shale gas: Reshaping the US chemicals industry
  5. 5. Figure 1: Shale gas through the ethane chain into manufactured products Ammonia Polyvinychloride Product categories Manufacturing sectors Methane Adhesives Apparel and accessories Trichloroethylene Methanol Alkyd resins Beverages and tobacco products Solvents Ethylene Vinychloride Chemicals Corrosion inhibitors Computers and electronics Fatty Acid Amide Textiles Fabricated metal products Inks, adhesives Food and kindred products Ethane Ethylene Shampoos, detergents, soaps Ethoxylate Leather and allied products Natural gas (from welhead) Paints Machinery, except electrical Polyethylene Glycol Coatings Nonmetalic mineral products Pipes, hoses, wire coating Paper Ethyl Acetate Coolant, antifreeze Petroleum and coal products Films, packaging, bottles Fatty Acid Ethanol Pharmaceutical Propane Propylene Paint remover Plastics and rubber products Plastics Polyvinyl Alcohol Primary metal manufacturing Tire and rubber Printed matter and related Lubricant additives Polyvinyl Acetate Textiles and fabrics Solvent, industrial cleaners Textiles and mill products N-Butylene Ethylene Vinylacetate Transportation equipment Butane Wood products Isobutylene Acetic AcidSources: PwC and TopLine Analytics 4
  6. 6. Figure 2: Economic cost model of natural gas to ethane-ethylene US Saudi Recent Historical Asia Change in US natural Raw material costs gas cost Natural gas costs $/MMBTU 0.75 3 12.5 Crude oil costs $/BBL 100 Equivalent $/ton 483 148 615 964 Ratio for 1 ton of ethylene 1 1.29 1.29 2.98 Ethane feedstock costs $/ton 483 190 793 2874 Catalyst + other $/ton 0 2 2 2 $/ton 483 192 795 2876 Other costs By-product credits $/ton 276 153 431 1565 Utilities $/ton 149 109 454 235 Direct costs $/ton 99 167 167 172 US is lowest-cost ethylene producer Total ethylene cost $/ton 455 316 985 1717 Typical ethylene margin 2.50% Transfer price for ethylene $/ton 466 323 1009 1760Sources: CMAI, TopLine Analytics, and Alembic analysis, 2012Note: The timing for Saudi Arabia and Asia is based on 2011 pricing for feedstock material. Their pricing hasremained constant over the period of this analysis.Ethane to ethylene: a major Cost economics of ethanefirst step in the chemicals and ethyleneindustry value chain The availability of natural gas as aThe extracted raw materials are used low-cost energy source has resultedto produce a variety of products in in lower-cost ethane and ethylene.6the chemicals industry. In the case of While we can assume that naturalethane, it is converted to ethylene and gas pricing will fluctuate over thethen a range of downstream products. next several years because of variousEthylene is the most significant single market conditions, figures 2, 3, andchemical in terms of volume and 4 use the price of $3.00 MMBTU forvalue. natural gas, based on the NYMEX 2012 price of $2.58 and Trading Charts futures forecasts of $5.90 for April 2015 prices.7 8 This natural gas price will affect the price of ethylene, which is expected to decline from a little less than $1,000 per ton to a little more than $300 per ton, as indicated in Figure 2. 6 “Petrochemicals,” Chemical Week, March 27, 2011 7 “Natural Gas Summary,” US Energy Information Administration, July 31, 2012, Web 8 “Natural Gas Futures Prices,”, Aug. 1, 2012, Web5 Shale gas: Reshaping the US chemicals industry
  7. 7. Figure 3: Ethane to ethylene cost economics US US natural gas costs Saudi Recent Historical Asia reduced by 4.2x Natural gas costs $/MMBTU 0.75 3 12.5 Crude oil costs $/BBL 100 Ethylene cost $/ton 466 323 1009 1760 Ratio for 1 ton of HDPE $/ton 1.025 1.025 1.025 1.025 Ethylene cost $/ton 478 332 1035 1804 Utilities $/ton 31 12 48 31 Direct cost $/ton 51 51 51 51 Other costs $/ton 132 132 132 132 Total costs $/ton 692 526 1266 2018 Polyethylene price Typical polyethylene margin $/ton 3.00% reduced by 2.4x Potential HDPE selling price $/ton 713 542 1304 2079Sources: CMAI, TopLine Analytics, and Alembic analysis, 2012Note: The timing for Saudi Arabia and Asia is based on 2011 pricing for feedstock material. Their pricing hasremained constant over the period of this analysis.Figure 4: Economic cost model of ethylene glycol US Saudi Recent Historical Asia US natural gas costs reduced by 4.2x Natural gas costs $/MMBTU 0.75 3 12.5 Crude oil costs $/BBL 100 Ethylene cost $/ton 466 323 1009 1760 Amount for 1 ton of HDPE 0.66 0.66 0.66 0.66 Ethylene cost 308 213 666 1162 Utilities 150 56 234 150 Direct cost 31 31 31 31 Other costs 35 35 35 35 Total costs 524 336 967 1378 Ethylene glycol price Typical ethylene glycol margin 3.00% reduced by 2.9x Potential ethylene glycol price $/ton 540 346 996 1419Sources: CMAI, TopLine Analytics, and Alembic analysis, 2012Note: The timing for Saudi Arabia and Asia is based on 2011 pricing for feedstock material. Their pricing hasremained constant over the period of this analysis.Cost economics of ethylene Cost economics ofto high-density polyethylene ethylene glycolPolyethylene, the No. 1 plastic by The downstream effect for anothervolume and value, is produced by high-volume ethylene derivative,converting ethylene into long-chain ethylene glycol, shows the samepolymers. The cost of polyethylene potential for cost reductions, as seenproduction in North America could in Figure 4.decline, similar to the cost of ethyleneand natural gas (see Figure 3).Based on our assumed price of $3.00MMBTU for natural gas, the priceof polyethylene from US sources ispotentially 2.4 times less than thehistorical cost. 6
  8. 8. Figure 5: 2012 global ethylene cash cost by site$1600 West$1400 Northeast Europe$1200 Asia Southeast$1000 Asia U.S.$800 Ethane U.S. Average$600 2011 Alberta U.S. Gas Demand$400 (Integrated)$200 Middle East$0 02 04 06 0 80 100 120 140 160 Cumulative capacity (million tons)Source: Gary Adams, “Leveraging a Fractured Future,” presentation, IHS, Feb. 9, 2012Shift in global dynamics The ethane chain in theAccording to the World Bank’s Pink Middle East, Europe,Sheet,9 the prices of natural gas in and Asia2008 in Europe, $11.42/MBTU, Japan, While oil and gas companies in the$16.00/MBTU, and the United States, United States are exploiting shale$12.50/MBTU, were in the same gas technologies and reducingballpark; however, that was before their natural gas and NGL costs,the shale gas boom in the United other regions are not as favored.States, which made the US price more The Middle East ethane productioncompetitive in the global marketplace. chain is predominantly centered inThis dynamic, and the relatively Saudi Arabia, which has leveragedhigh price of oil at $80 to $100 per its historically low-cost rawbarrel, has the potential to give the material sources to become a globalUS chemicals industry a significant petrochemicals powerhouse. However,competitive advantage globally. its newer ethylene production facilitiesWhether this advantage is realized rely on an ethane-butane mix,depends on a number of factors, which yields higher-priced ethyleneincluding the domestic tolerance for and other feedstock chemicals.hydraulic fracturing and its waste These factors are serving to reduceproducts, as well as the political and the country’s historic competitiveeconomic ramifications of exporting advantage. Figure 5 illustrates theliquefied natural gas (LNG).10 global cash cost per site.9 Development Prospects Group. “Commodity Price Data,” The World Bank, May 3, 2012, Web10 Michael Levi, “The Case for Natural Gas Exports,” The New York Times, Aug. 16, 20127 Shale gas: Reshaping the US chemicals industry
  9. 9. Europe, and to a lesser extent balance of trade as ethylene capacityAsia, have a more limited supply comes on line.11 Several multinationalof ethane. Most of their ethylene oil and gas companies are investing incapacity is produced from naphtha, building the infrastructure to exportan intermediate refined form of crude LNG. In addition, companies are in theoil, which is more expensive than the early stages of negotiating long-termMiddle East ethane-butane mix and supply agreements with foreign entitiesthe US shale gas ethane. For upstream for LNG.participants, these realities could As these developments unfold, theredemand new strategies in managing could be other changes. The East Coastglobal supply and demand, balance or Pacific Coast could emerge a hub forof trade, pricing policies, and supply export, based on the location of shalechain economics for ethylene and gas reserves and production facilities.the corresponding downstream And with low US ethane prices linkedderivatives. Armed with the lower- to natural gas, some might explorepriced shale gas economics, the United the option of using NGL tankers andStates could find itself among the infrastructure to ship ethane.low-cost ethylene and derivativesproducers. Over time, one impactcould be a favorable shift in the US 11 “America’s New Energy Reality,” The New York Times, June 9, 2012 8
  10. 10. Impact on chemicals and are making multibillion-dollarindustry segments investments in building new plants to increase capacity.14 Recently, bothThe United States is already a net Dow Chemical15 and Chevron Phillipsexporter of ethylene derivatives, and Chemical16 announced plans to buildthe volume is expected to increase ethylene production plants in Texas.significantly. Together with low-costMiddle East producers, the chemicals Shell Chemicals recently said it willindustry may see some economic build an ethane cracker in Monaca,disruption in other regions that use Pennsylvania.17 This decision to buildcrude oil to produce those products. in the Northeast, rather than alongThis may cause the shutdown of the Gulf Coast, could have significantless lucrative assets and lead to the ramifications and affect planning forimposition of trade barriers by some other gas companies. Some questionscountries in an attempt to protect to be considered include the following:local production. • Can the Northeast region supportMajor oil and gas companies and another ethane cracker?upstream commodity industry • Will Ohio, West Virginia, orparticipants are already acting Pennsylvania become a newon plans to take advantage of natural gas and NGL hub like Montshale gas opportunities. Some are Belvieu, Texas?negotiating mergers, acquisitions,and divestitures; analyzing their • Could a Northeast region hub shiftportfolios, pricing policies, and the industry economics for thesesupply chains; and conducting commodities?customer service analyses.12 They • What existing pipelines can beare considering whether to restart reversed, and where should newmothballed assets, invest in greenfield ones be constructed?projects, form strategic alliances,and expand and upgrade existing • Will oil and gas explorers continueassets. For many of these companies, drilling in the Northeast region,today’s focus is on execution of or will they shift drilling assets tolarge capital projects, identification other liquid-rich regions, such asof engineering and construction the Bakken basin?resources, and establishment ofstrategic sourcing agreements with • Which state legislatures are likelyNGL providers, exporting options, to ban or limit hydraulic fracturingand material logistics. With low-cost for environmental reasons, as Newand abundant ethylene, coupled York has done?18with a slowdown in the growth of • How might state regulationsdomestic demand, US companies and tax policies affect drillingare looking abroad for expansion procedures, decisions, andopportunities.13 Some companies profitability?have clearly stated this intention 14 Emily Pickrell, “New Chevron Phillips plant boosts Texas as chemical hub,” Fuel Fix, June 14, 2012, Web 15 “Dow to Build New Ethylene Production Plant at Dow Texas Operations,” The Dow Chemical Company, April 19, 2012, Web 16 Emily Pickrell, “New Chevron Phillips plant boosts Texas as chemical hub,” Fuel Fix, June 14, 2012, Web 17 “US Appalachian petrochemical project,” Shell12 “Dow Sees U.S. Ethylene Advantage Widening,” Chemicals, Aug. 1, 2012, Web Chemical Week, April 30, 2012, Web 18 Mary Esch, “New York Fracking Ban: Cuomo’s13 “ESAI: Shale development to boost US ethylene Energy Proposal Polarizes Supporters and exports,” Oil & Gas Journal, Aug. 6, 2012, Web Opponents,” Huffington Post, June 13, 2012, Web9 Shale gas: Reshaping the US chemicals industry
  11. 11. Further downstream, specialty Lower pricing could help US chemical entities are starting to feel manufacturers competitively. Certain the effects of natural gas and NGL manufacturers of products with high prices on their business models. As ethylene content, such as downstream manufacturers replace petroleum- specialty chemical manufacturers, based raw materials with products packaging manufacturers, and based on ethylene, their cost structure plastic bottle producers, could have will change significantly, as will supply a big advantage. New markets and and demand for certain products. products may open up. Ethylene-based chemicals may also replace other A case in point is butadiene, a chemicals where technically possible. petroleum-based chemical used in As these changes occur, companies the manufacture of rubber tires. may want to carefully manage the While butadiene prices are subject supply chain and their innovation to short-term supply and demand portfolio. They may also want to create considerations, over the longer term, strategic alliances through mergers the price of butadiene is expected and acquisitions to supplement to rise because of the shift to cost- their efforts. advantaged natural gas liquids as feedstock to ethylene plants.19 This In a similar manner, greater emphasis pattern is likely to be repeated for on commercial activities in such areas other petroleum-based raw materials, as product portfolio management, many of which are used in building, innovation, pricing policies, logistics, construction, adhesives, paint, and cost reduction will be essential to coatings, plastics, packaging, and maintain global competitive positions. carpeting. The chemicals industry’s traditional response—finding new substitutes— As the commercial distribution will advance on two fronts. of ethane and ethane-based raw materials increases, it could trigger The first will be to find a substitute new innovations and investment in the cost-advantaged ethylene in new technologies. Research and chain. The second will be to development initiatives leveraging produce these products with new ethylene-based chemistries that technologies in a purposeful manner replace petroleum-based products as opposed to a by-product production may predominate. Companies might process, as in the case of propane also look for longer-term sourcing dehydrogenation to propylene. And relationships and partnerships with advances in technology often draw raw material suppliers to help with new competitors as well. This is likely developing new products. to be magnified as competitors seek technologies to produce a single molecule as opposed to previous technologies that produced a wide range of molecules, requiring stepsIn the United States, ethylene derivative supply that added to production costs andis expected to greatly outstrip demand, driving increased time to market.down pricing. Finally, with lower-cost ethylene derivatives, a redirection of research and development initiatives centered on leveraging ethylene-based chemistries warrants consideration. 19 “TPC Group Reports Second Quarter 2012 Financial Results,” TPC Group, Aug. 2, 2012, Web 10
  12. 12. The ‘wave of change’ based on the competitive advantagebeyond the chemicals low-cost, natural gas-basedindustry feedstocks brings to the production of certain products, such as plastics,If the changes brought about by performance materials, and advancedshale gas take hold in the chemicals materials.21 Likely targets will beindustry, they will create a need for relatively simple products such asspecialty steels, reactors, separation toothpaste tubes, disposable medicalcolumns, pipes, compressors, pumps, syringes, or pens that can be producedvalves, fittings, control systems, on high-speed lines with robotics,storage tanks, and other chemical requiring little labor. In the electronicprocessing equipment, as well as device industry, we are seeing thethe services of engineering and manufacturing of more demandingconstruction firms. products, such as touch-sensitiveGiven the law of supply and demand, screens, higher-strength films,increases in ethylene-based capacity mobility devices, and miniaturizedcould yield a decline in chemicals components, return to the Unitedpricing. Since chemicals are used in States.22 Additionally, supplying USan estimated 90% of all manufactured customers with US products simplifiesproducts, lower chemicals prices could the long and costly supply chain.bring about a reduction in costs for All of these scenarios presentUS manufacturers. Another possible challenges and opportunities foroutcome is that chemical products will manufacturing companies. We haveincreasingly become a substitute for seen the changes in natural gas pricesmore expensive materials, such and how those changes flow throughas metals, glass, wood, leather, the chemicals industry. Figure 6and textiles. illustrates the potential ethane impactPartial substitution could occur in on manufacturing. Whether thesecomplex manufactured products. For opportunities are realized will dependexample, while today automobiles on how downstream manufacturershave a 20% chemical content, will be positioned to capture thethat percentage could rise as some cost-saving opportunities. Successfulmanufacturers reengineer parts to manufacturing companies are alreadyincrease chemical content, thereby reexamining their strategies, productdecreasing weight and costs. innovation portfolio, supply chain planning, and other areas. Some ofIt is also possible that lower energy the changes they face might be ascosts could bring some manufacturing dramatic as the events now unfoldingback to the United States.20 Dow in the chemicals industry.Chemical’s decision to build anethylene plant in Texas is in part 21 David Muir, “Companies Move Manufacturing Jobs Back to America,” ABC News, Feb. 22, 2012, Web 22 “Samsung to Invest $4 Billion More on US Chip20 “Petrochemicals,” Chemical Week, March 27, 2011 Plant,” Reuters, Aug 21, 2012, Web11 Shale gas: Reshaping the US chemicals industry
  13. 13. Figure 6: Ethane impact on manufacturing industry value chain Low Density Polyethylene Food Packaging, Film, (LDPE) and Linear Low Trash Bags, Diapers, Density Polyethylene Toys, Housewares High Density Poly- Housewares, Crates, Polyethylene (HDPE) ethylene (HDPE) Drums, Bottles, Food Containers Siding, Window Ethylene Dichloride Vinyl Chloride PVC Frames, Swimming Opportunity for up to Pool Liners, Pipes 60% raw material cost advantage as a result of wet shale gas basins Ethylene Oxide Ethylene Glycol Automotive Anti- freeze Downstream opportunity for 60% raw material Ethane Ethylene Fibers Pantyhose, Cloth- cost advantage ing, Carpets “should” translate through entire value chain. But Polyester Resin Bottles will it be realized? Misc. Ethylbenzene Styrene Polystyrene Packaging Resins Styrene Acry- Instrument Lens- Linear Alcohols Detergent lonitrile Resins es, Housewares Styrene Tires, Footwear, Butadiene Sealants Rubber Vinyl Acetate Adhesives, Coatings, Textiles/paper Styrene Carpet Backing, Finishing, Butadiene Paper Flooring Latex Misc. Chemicals Misc.Sources: “Shale Gas and New Petrochemicals Investment: Benefits for the Economy, Jobs, and USManufacturing,” American Chemistry Council, March 2012, PwC and TopLine Analytics 12
  14. 14. The implications of the shale gas • Will the US chemicals industryConclusion boom for any chemical company are economics set off a round of varied and complicated. While some protection among disadvantaged companies may already be realizing countries? gains in profitability and shareholder • What is the company’s global versus value and creating new opportunities domestic strategy? What are the tax at home and abroad, there is no single and transfer pricing implications? model for success. Companies need to consider their individual situation and • Which strategies for mergers, business options and understand the acquisitions, and partnerships risks and opportunities being presented should the company be by the abundance of shale gas. considering? • How will shale gas affect the Questions that companies company’s supply chain in terms should consider include the of cost reductions and risk following: parameters? • Which new energy strategies • What are the new and emerging should the company explore? How business models for industry value can it best take advantage of shale chain participants? gas availability? • How quickly will manufacturers’ • How should the company allocate strategic sourcing capabilities ramp investment dollars among the up to capture and translate the different fuel sources? Where will it lower costs of raw materials into get the greatest return in the short their cost structures? and longer term? • If consumer prices drop as a result • Is the company employing the most of lower-priced fuel, how will that effective and efficient sourcing affect business? strategies for energy and raw materials? • What new commercial opportunities are emerging, and • Should the company shift R&D how should the company price its and product innovation dollars to products? capture opportunities presented by the availability of shale gas?13 Shale gas: Reshaping the US chemicals industry
  15. 15. PwC US helps organizations and individuals create the value they’re lookingAbout the PwC for. We’re a member of the PwC network of firms in 158 countries with close to 169,000 people. We’re committed to delivering quality in assurance, tax, andnetwork advisory services. Tell us what matters to you and find out more by visiting us at PwC’s chemicals practice comprises a global network of industry professionalsAbout PwC’s who provide assurance, tax, and advisory services to public and private chemical companies around the world. We actively leverage our diverseChemicals practice institutional knowledge, experience, and solutions to provide fresh perspectives and significant value for our clients. The depth and focus of our industry-specific training, thought leadership, and professional global network demonstrate our commitment to the chemicals industry in addressing top-of-mind issues that impact bottom-line performance. Our professionals are recognized throughout the industry for their innovation in analyzing, developing, and implementing tailored solutions for companies in the chemicals sector. For more information please visit us at 14
  16. 16. have a deeper conversationabout the issues in this paper,please contact:Anthony ScamuffaPartner, US Chemicals leader267 330 LustigPrincipal646 471 WhitePrincipal646 471 GeeDirector267 330 author to thiswhite paper:Tom GellrichTopLine Analytics© 2012 PwC. All rights reserved. “PwC” and “PwC US” refer to PricewaterhouseCoopers LLP, a Delaware limited liability partnership, which is a member firm ofPricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity. This document is for general information purposes only, andshould not be used as a substitute for consultation with professional advisors. LA-13-0069