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Chemicals: Although chemical companies are enjoying a rebound in sales and a rise in profits after a long recession, the industry is still facing difficulties. The current cycle is expected to reach its high point in 2007. High raw martial prices and cheaper products are squeezing margins. In response, companies have trimmed costs and increased efficiencies. But other solutions are necessary, according to industry analysts. New strategies include the branding and service approaches associated with commodities. Also, chemical companies are selling assets and acquiring companies to sharpen their focus. KPMG consultants estimates that approximately 40 such transactions worth more than 6 billion [euro] have been completed since January. Oil companies BP, Royal Dutch/Shell and Total have all divested significant parts of their chemicals businesses in order to concentrate on upstream operations. Private equity have been one of the most prominent buyers of chemicals assets.

Source: Financial Times
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Title Annotation:Industry Watch
Publication:Instrument Business Outlook
Article Type:Brief Article
Geographic Code:1USA
Date:Oct 15, 2004
Previous Article:Pharmaceuticals.
Next Article:Food and Beverage.

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