6 x 10.5 Three line title - Cambridge University...

Index

AB Celloplast, 242AB Nobel Plast, 245Abbot Laboratories, USA, 162ABCM (Association of British Chemical

Manufacturers), 294academia in the U.S. chemical

network, 172academic chemists, hired by DuPont,

173academic researchers, attracted to

industrial technology, 172accounting standards

changing, 58for Ciba-Geigy, 217

acetyleneliquefaction process, 275provider of, 145

acidsBayer integrating backward into,

24large demand for, 23

acrylic polymers, production duringWorld War II, 175

acrylonitrile, 150

action phase (mid-1980s to early1990s), 66–71

A.D. Little. See Arthur D. Littleadded value products, firms searching

for, 407Addison, Christopher, 293Age of Petroleum, 449Agell, Josep, 378AGFA

Auguste Victoria coal mine interfirmagreement, 24

diversification into photochemicals,23

receiving crucial support frombankers, 88

sold by Bayer, 80spin-off of by Bayer, 76starting as technology followers,

23aging industry, signs of, 57AGIP, 350agrarian sector, modernization of

Spain’s, 387AgrEvo, 75

465

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Cambridge University Press978-0-521-87105-1 - The Global Chemical Industry in the Age of the PetrochemicalRevolutionEdited by Louis Galambos, Takashi Hikino and Vera ZamagniIndexMore information

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466 index

agribusiness, divested from Novartis,219

agricultural chemicals, 178agro-business, concentration of

Montedison on, 59agrochemicals

department in Ciba, 206Rhône-Poulenc acquisitions in, 262

agro-industry business of Montedisonsold, 363

agroprojects, marketing strategy fromCiba, 206

Air Liquide, 251number one worldwide in industrial

gases, 275specializing in services to industrial

companies, 277transformation path of, 253

air pollution policy, 118Air Products & Chemical, 31, 316Airwick, 214Aker, 233AKU, 376Akzo Nobel (Netherlands), 53

concentrating on fibers, 59concentrating on fibers, coatings

and pharmaceuticals, 68consultancy centers for the

purchasers of varnishes, 45reducing staple fibers, 61sale of Bamag, 80sales, profit and profit margin in

1995, 311alkalai companies in Britain, 290Alkalai Inspectorate, 122, 290Alkali Acts Extension Association, 122alkalis, 23all-around chemical enterprise (sogo

kagaku gaisha), 325alliances, during restructuring, 45Allied Chemical, 30Almirall, 392, 398aluminum production, sold by

Mitsubishi, 69America. See United StatesAmerican Chemistry Council, 120,

130

American Cyanamid, 30American Enka, 68American Home Products, 30, 73American Selling Price System, 208Americanization of German chemical

companies, 154Anglo-American Productivity Council,

296–298ANIC

AGIP achieving full control of, 350authorizations to new investments,

354chemical investments approved by

the Italian government, 355emerging as a strong competitor to

Montecatini, 350entry in petrochemicals, 97net gain or loss as a percent on

turnover, 1974–1981, 3561971 data on, 354

ANIC-ENI, 353, 355aniline dyes, 291antiaging creams, 276Antibióticos, 381, 391antibiotics, 143Antipyrin, 23, 25antitrust climate in the U.S., 183antitrust policy

in Europe, 4, 22in the United States, 22

Antonio Puig, 398A.P. Møller, 228APPE (Association of Petrochemicals

Producers), 45application laboratories

building new skills, 268at Rhône-Poulenc, 267

applications for radically newmaterials, 187

applications technologies(“Anwendungstechnik”), 155

approval dossiers, 273Arabian states, building plants for

chemical intermediate goods,63

Årdal og Sunndal Verk, 233Armour, J. Ogden, 179




Index 467

aromatic compounds, 179Arthur D. Little, 35

on chemicalization, 171presentation of the “unit operation,”

36technical partner of SENER, 386

artificial fibers, 376, 380artificial resins, 421artisanal level in Italy, 366A/S Danbritkem Polyethylenfabrik,

228Asahi Chemical Industries (Japan),

53competing on low costs advantages,

68dealing with the possibility of

substitutes, 62emergency exit constructed by, 81focus on the home market, 72investing in main plants, 63massive entry into petrochemicals,

98Mizushima Ethylene as a joint

venture of, 322return on profit (1995), 316sales, profit, and profit margin in

1995, 311Asahi Electrochemical, 320Asahi Glass, 327, 329Asahi-Dow, 320Asko Oy, 242Aspirin, 23asset swaps between European

companies, 104assets

mass movement of, 170per employee in the US compared

with Britain, 297Association of British Chemical

Manufacturers (ABCM), 294Association of Chemical Manufacturers

in Britain, 26Association of Petrochemicals

Producers (APPE), 45Association of Plastic Manufacturers

(Verband kunstsofferzeugendeIndustrie), 158

Association of the German ChemicalFiber Industry (IVC), 157

associations, industry-wide, 45, 50,119

AstraZeneca, 109. See also ZenecaAtochem, 279Atochimie, 278Atofina, 79, 251

branches of, 279created in April 2000, 277emerging from a long process of

mergers, 15atomic power, 61Auguste Victoria coal mine in Mari, 24Ausimont, 363autarchy policy in the German

chemical industry, 142autarkical firms in Spain, 387authoritative role for the state, 116automatic controls in plants, used

more in U.S. than in Britain, 297Aventis, 251

creation of, 15, 258formation of, 13, 76, 81, 163as a leading European

pharmaceutical enterprises, 258turnover of, 76

aviation oil, massive U.S. demand for inWorld War II, 32

backward integrationto achieve economies of scale and

scope, 24chemical industry’s limited interest

in, 180model in Japan, 42

balance of payments problems inBritain, 287

Bamag, sold by Akzo, 68, 80Banca Commerciale Italiana, 90, 91banks

constrained by regulation in Britain,84

financing huge projects for Japanesechemical companies, 315

kept small by regulation in Japan,89




468 index

banks (cont.)not wanting chemical companies to

default in Japan, 324ownership as a restraining role in

Italy, 91in the U.S., 85

Barcelona, chemical businesscommunity concentrated in,378

barriersto entry, 234–237for trade, 197, 208to trade, 208

Basell, Montell name changed to, 363BASF (Badische Anilin Soda Fabrik),

53acrylics operation, 247American subsidiaries, 154assisting in founding ENCASO, 381Auguste Victoria coal mine interfirm

agreement, 24backward-integration strategy, 62in the big three in 1980, 445cutting LDPE capacity, 239emergency exit constructed by, 81establishing production and R&D

facilities abroad, 67financing of after World War II, 92integrating forward in the plastics

sector, 158integration of processes at

Ludwigshafen, 163investment

policy of, 147into raw materials, 63

joint ventureswith Mitsui Toatsu, 339with Shell, 149, 226, 363

left intact in its original size, 164on the list of the 50 largest

companies in the world, 55listing on the New York Stock

Exchange, 109Merck larger turnover than, 54moving from coal to oil, 149obtaining the Haber-Bosch process,

292

patents to Brunner, Mond, 293planned atomic power plant, 61production techniques, 77receiving crucial support from

bankers, 88reconstruction of the European

economies and, 97reemergence in the 1950s, 32research intensity, 106running the largest industrial site in

the world, 77sale of pharmaceutical business to

Abbot Laboratories, USA, 162sales, profit, and profit margin in

1995, 311scaling down the capacity of its

steam-crackers, 157selling more in the U.S. than in

Germany, 162selling pharmaceutical division, 13starting as technology followers, 23strategy

of being a low cost producer, 68of combining bulk and

sophisticated products, 77supplying raw materials and

semimanufacturers, 147basic chemicals

characterizing the production ofchemicals in the USA untilWorld War I, 412

countries depending on, 412countries more involved in, 421

Basle (Switzerland)chemical industry in, 193corner location between three

countries, 216as an economic location, 223geographic advantage of, 223

Bayer (Germany), 53agreement with BP, 226American subsidiaries, 154Auguste Victoria coal mine interfirm

agreement, 24behind American competitors before

the Second World War, 142in the big three in 1980, 445




Index 469

concentratingchemical production in a new

company, 164on pharmaceuticals and

specialties, 163on the upper end of the market,

65establishing production and R&D

facilities abroad, 67exiting from plastics, 158financing growth, 94focused on life-science by growing

internally, 76investment policy of, 147joining with Monsanto to form

Mobay, 72joint ventures

with BP, 150with Hoechst, 75as a platform for international

investments, 177on the list of the 50 largest

companies in the world, 55moving further into pharmaceuticals

and synthetic fibers, 147net gain or loss as a percentage on

turnover, 1974–1981, 356patenting of Aspirin, 23penicillin production, 142in pharmaceuticals in the 1980s, 162playing down German origin, 72profound changes in, 11purchase of Chiron, 76reconstruction of the European

economies and, 97reemergence in the 1950s, 32sale

of Agfa, 80of Metzeler to Pirelli, 69

sales, profit, and profit margin in1995, 311

selling more in the U.S. than inGermany, 162

slower start into petrochemistry, 150Spanish subsidiaries and joint

ventures, 387spinning off a chemical firm, 78

starting as technology followers, 23tripled capital stock prior to the

1970s, 92winning back independence from

BASF’s dominating position, 144BDI (Federation of German Industries),

134Bechtel, 235Belgium

consumption of LDPE, HDPE, andpolypropylene per inhabitant,230

direct access via the Rhine river, 153plastics consumption per inhabitant,

230trade balances, 1980–2003, 349turnover, 252

Belgium-Luxembourg, chemicalexports and imports, 310

benchmarking initiative atRhône-Poulenc, 265

Beneduce, Alberto, 356benzene, 148Beolit Plast AB, 242Berol, 227Bettencourt, Lilliane de, 277BEUC, calling for a complete overhaul

of chemicals policy, 131Beyer, Hildrud, 133Bhopal in India, 129

accident costing about 3,000 lives,58

disastrous accident, 71Big Three Industry, 275biodegradability as a criterion for

water pollution, 128biotechnology

German chemical industry failing torecognize the potential of, 159

giving an advantage to the UnitedStates, 403

merger with genetic engineering,161

opposition to a research center forin Basle, 216

political initiatives against inSwitzerland, 200




470 index

biotechnology (cont.)private research foundations and the

German federal governmentwave of, 160

segments created by, 99severing synergies between

chemicals and life sciences, 99as a splotch on the German chemical

industry, 13stigmatized as low tech by German

chemists, 160black list, related to biodegradability,

128bleaching powder, 290Board of Trade

concern about the state of thechemical industry, 302

investigation into investment, 299,300, 302

Bonomi group of FIAT, 58boom or bust business cycles, 247boom years, accelerators during, 66Borealis, 247–250

establishment of, 248in the European polypropylene

business, 249formation of, 45nameplate capacity for polyethylene,

249operating profit in its first year,

249operational on March 1, 1994, 248organization of, 14producing petrochemicals and

polyolefins, 248Borealis Industrier AB in Sweden,

248BP (British Petroleum)

agreement with Bayer, 226alliance with the whiskey firm

Distillers Company, 226buying petrochemical plants from

Union Carbide, 239ceding PVC operations to ICI, 45never able to erode ICI’s dominance

of bulk chemicals, 299

venture with Bayer, 150ventures outside Britain, 226withdrawing from the PVC market,

239Bray, Dr. Jeremy, 302BRD


plastics consumption per inhabitant,230

Brent Spa oil platform, 73Bretton Woods system, breakdown of,

5, 210brine, 133, 290Britain. See also UK

chemical exports and imports, 310chemical firms more active in

restructuring, 103chemical industry, 15, 285

dependence on, 121in difficulty, 303–305evolution and financing of, 84–85experiencing considerable

restructuring at the end oftwentieth century, 305

not doing as well as its majorcompetitors, 301

reacted by cutting capacity, 304rebuilt after World War II, 33reorganization of during World

War I, 26in terms of international

competitiveness, 288warning signs, 301–303

chemical plantsdeficiencies identified when

compared to U.S. plants, 297fewer technically qualified

personnel than in U.S., 298consumption of LDPE, HDPE, and

polypropylene per inhabitant,230

home economy of, 301Japanese exports and imports of

chemical products, 324




Index 471

limited interests in university-trainedengineers, 37

modern chemical industry startingin, 22

moving in the direction of improvedcorporate governance, 108

organic chemicals as the mostdynamic branch of exports, 426

patents issued 1985–1995, 337petrochemical companies building

larger plants, 234plastics consumption per inhabitant,

230production of chemicals, 415replacement of the Leblanc process

by the Solvay process, 290shift to petrochemicals relatively

early in, 298shortage of instrument maintenance

engineers and designers, 297as a technology generator and

innovator, 313tensions with Germany on draft

environmental regulation, 126turnover and mean growth, 252

British Dyes Limited, 292British Dyestuffs Corporation Ltd., 27,

292British Hydrocarbon Chemicals

British Petroleum Chemicalsrenamed as, 226

ethylene cracker at Grangemouth,235

not able to erode ICI’s dominance ofbulk chemicals, 299

British IG. See ICIBritish Petroleum. See BPBritish Petroleum Chemicals,

226broad product diversification versus

focusing on core sectors, 221BRP (Oil Research Bureau), 278Brunner, Mond & Co. Ltd., 27, 28, 84,

290equipping a new laboratory at

Billingham, 293

taking advantage of theCastner-Kellner process, 290

building industry, reconstruction inGermany and, 147

building investmentsof Ciba, 205of Geigy, 207

building material business, spun off byShowa Denko, 340

bulk chemicalsconcentration in, 71ICI severing its link with, 305

bulk fibers, Akzo selling off, 68bulk plastics, headaches caused by,

65bulk production, divestiture of

facilities for, 69bulk products, cutting back capacity

for, 61bulkware, reduced commitment to,

64Buna. See synthetic rubberbureaucracy as opposed to innovation,

2bureaucratic institutions, corporations

as, 2business groups

large and diversified in Japan,43

role in the Spanish chemicalindustry, 386

business portfoliosability to quickly reshape, 106restructuring important in

reallocating, 105businessmen in the operations of

government in Britain afterWorld War I, 293

butadiene, 176

Cagliari, suicide of, 361Cain Chemical, 48California, U.S. environmental policy

and, 128Caltex, 151, 319CAMPSA, 381




472 index

Canadachemical exports and imports, 310consumption of LDPE, HDPE, and


patents issued 1985–1995, 337capacity

coming on-stream several years later,188

expansion exceeding the growth ofdemand in Japan, 336

capitalcheap in the U.S. in the 1990s, 58outlays constituting powerful

barriers to entry, 92capital base

of chemical firms, 92reconstructing BASF’s, 97

capital intensive industries, 1, 286capital markets

Ciba-Geigy’s independence from,217

deregulation of global, 216liberalization of in Japan, 321orientation of Ciba-Geigy toward the

U.S., 219Zaibatsu reliance on internal, 89

capitalist system, 1Carbide. See Union Carbide (USA)Carburos Metálicos, 376Carlo Erba, 90Carothers, Wallace H., 173Carpenter, Walter S. Jr., 180Carson, Rachel, 123cartels. See also international cartels;

international dyestuff cartelchemical industry experience with,

4difficult and dangerous to form in

the U.S., 22dissolution of agreements, 220in Europe, 22excluding Spain, 378international, 28during the interwar period, 28lessening the impact of the

depression, 196

nonrevitalization of the Europeanand especially Germantradition, 146

role in the restructuring of thechemical industry, 28–29

Cassa del Mezzogiorno, 351Cassa per il Mezzogiorno, 351Castner-Kellner process, 290catalysts

in chemical reactions, 181use of, 34

catalytic organic chemical synthesis,160

catalytic technology forpolypropylene, 244

caustic soda, 133CEFIC (Conseil Européen des

Fédérations de I’IndustrieChimique). See also EuropeanChemical Industry

playing to its strengths usingspecialist resources, 132

SSCI a member of, 199Celanese

acquisition by Hoechst, 162exploiting a loophole in DuPont’s

patent, 177Hoechst spinning off, 164integration of into Hoechst, 163purchased by BASF, 77purchased by Hoechst, 69spin off of, 76

cellulosederived from wood, 173as a mysterious molecule, 173new companies related to the

manufacture of, 380cement manufacturing at Ube

Industries, 336CEPA (Compañia Expañola de

Penicilina y Antibióticos), 383,391

antibiotics manufactured by underMerck license, 383

exclusive right to import andmanufacture antibiotics in theSpanish market, 381




Index 473

new ownership refusing to continuesupporting scientific staff, 384

progress experienced by chemicalsubsidiaries, 393

Screening Program of, 384CEPSA (Compañia Española de

Petróleos), 381, 393CERCLA (Comprehensive

Environmental Response,Compensation and LiabilityAct), 127. See also Superfund

CFP (French Petroleum Company),278

Chambers, Sir Paul, 300Chandler, Alfred D. Jr., 2, 5Charbonnages de France, 279chemical(s). See also fine chemicals

accidents demonstrating high risksof production and storage of,199

average annual growth rates inproduction of by country(1963–1991), 410

balance of trade, 419EU Council Directive on

classification and labeling of(1967), 124

export of by country (1952–1995),421

index of industrial production for,286

industrial not marketed as finalproducts, 132

investment in, 405legislation preventing the

proliferation of dangerous,124

making synthetically or replacing,171

producing building-block from oil,179

production by country (1963–1991),409

production of, 407–419regional shares in world trade in, 6regulation of market entry of in

Europe, 126

similar growth trend in the differentbranches of, 412

spectacular growth atRhône-Poulenc, 259

U.S. tariffs for remaining prohibitive,208

chemical artisan firms in Italy, 91chemical assets, buying and selling in

the 1990s, 186Chemical Century, 177chemical companies. See also chemical

firms; companies; firmscompetitive strategy of the world’s

largest, 53–81as each others’ best customers,

183forming joint ventures with oil

companies, 226integrating backward, 225largest listed in Fortune Global 500:

1995, 311networks with SEFs, 37–411982 economic results for, 239profitability of the largest (Japan and

the United States: 1995), 316ranked by sales and by profit

(1960–1990), 448strategy of chemicalization, 171world’s top thirty, 445

chemical compounds, 170chemical engineering

crucial to master huge cracking andrefining plants, 148

expansion in Britain facilitated by,301

generic component growing at theexpense of specific practice,173

maturation of the discipline of, 181rise of, 35–37role of the PhD degree, 36

chemical engineers. See also engineersworking for BASF, 293

chemical enterprises. See enterpriseschemical exports. See exportschemical fields, moving within not

easy in Japan, 325




474 index

chemical firms. See also chemicalcompanies; companies; firms

competitive situationin 2002, 79in the early 1970s, 61in the early 1980s, 66in the early 1990s, 72at the turn of the century, 78

consolidation of in Japan, 44developing as divisions of

conglomerates in Japan, 89evolution of the largest in Spain, 370gathering information from the

broader network, 170government relations or public

affairs divisions of, 119on the list of the 50 largest

companies in the world, 55market niches carved by, 90quick changes occuring in the

1990s, 80relying on internally generated funds

in the U.S., 86chemical imports. See importsChemical Industries Association, 304.

See also industry associationschemical industry, 82. See also

petrochemical industryacademic studies of, 9assumptions about what constitutes,

251British ideas on the national

importance of having acomplete, 292

decline in competitiveness inBritain, 285

different paths of development bycountry, 412–419

diversification of oil companies into,278

as a dynamic oligopoly, 369earning profits above the level of all

manufacturing, 405emergence of the modern, 1evolution during the post–World

War II period, 449evolution of the modern, 1

financial aspects of, 82firms remaining innovative and

successful, 5geographical relocation to oil and

gas-producing regions, 176growth of, 5, 29, 97historical structure of in the United

States, 170–174history of the world modern,

10import penetration in, 287international technology transfer of

Japanese, 342leaders defending their positions,

404leaders surviving by radical

restructuring, 404maturation of, 185maturing and then declining after

World War II, 57mid-1970s difficult years for, 237networks in, 21–501970s recession for, 62one of the best performing sectors,

385parliamentary inquiry into in Italy,

354passing through distinct eras, 402petrochemicals as secondary to

major strategies, 184quantitative assessment after World

War II, 407–449R&D activities in Japan, 326rapid growth in the postwar decades

in the U.S., 183research approaches to, 9–17restructuring

in the 1970s, 44and downsizing in the 1980s, 4

role of cartels, 28–29seeking incremental learning

curve–type improvements, 185severest recession for German since

the end of the Second WorldWar, 162

strategy of exiting to focus onlife-science, 71




Index 475

structurally different in Japan, 42TSCA passage as a shock for, 125unfavorable media coverage, 129value added per person employed in

Japan, 309World War I producing big changes

in the structure of, 26chemical investments. See investmentChemical Manufacturers’ Association,

119chemical networks. See networkschemical plan, issued by the Italian

government in 1971, 353chemical plants. See plantschemical processes. See processeschemical processing. See processingchemical production. See productionchemical products. See also product(s)

development of German foreigntrade in, 165

imports increasing from developingcountries, 409

Italy among the worst performers,347

process technology lowering thecost of all, 184

replacing raw materials after WorldWar II, 54

sharp decline in the demand forafter World War I, 26

trade balances by country,1980–2003, 349

trade balances, 1985–2003, 348chemical reactions, 170chemical research. See researchchemical sales, geographical

breakdown of world, 6chemical specialties. See specialtieschemical substances, regulating the

entry of new, 126chemical synthesis

IGF fully concentrating on, 143path dependence in, 159–162

chemical technology. See alsotechnology

complementary to British-stylefinance, 85

continuous developments of,314

country distribution of the marketfor, 38

SEFs licensing of, 41sources of, 40

chemical user industries, growingrapidly in the early 1950s, 318

chemicalizationof industry generally, 171principles of, 171of the Spanish economy, 387

chemical-patenting countries. See alsopatent(s)

ten largest 1985–1995, 337chemicals division

fundamental transformations atRhône-Poulenc, 268

innovation projects atRhône-Poulenc, 266–267

Rhône-Poulenc moving towardspecialties, 258

separating life-sciences operationsfrom, 100

strategic redirection intensifyingdifferences at Rhône-Poulenc,271

Chemicals EDC, 304Chemicals Mission, 292chemicals policy of the EU, 131“Chemicals: The Ball Is Over”, 185chemical-trading nations, ten largest in

the world: 1995, 310Chemintell database, 40Chemische Fabrik Griesheim-Elektron,

26Chemische Werke Hüls, 143chemists, institution in Spain devoted

to the education of industrial,378

Chemstrand, 183Chevron Chemical, 340Chiba petrochemical complex, 335China, Japanese exports and imports,

324Chiron, 76Chisso, 321




476 index

Chloé, 278chlorinated hydrocarbons, 134chlorine, 133–136chosen instruments

chemical firms regarded as, 115ICI set up as, 288

Ciba, 202annual reports of, 204broader diversification of, 207competition eliminated for, 196as a dye manufacturing firm, 196expanding

chemical works, 208demand for shares by lowering

price, 217in an evolutionary,

path-dependent way, 209Geigy growing more rapidly than,

207holdings in the U.S. sold in the early

1970s, 209main product lines of, 206merger

with Geigy, 14, 209with Sandoz, 219

pharmaceutical division combinedwith Sandoz, 14

productionagrochemicals in the 1950s, 204auxiliary and refining products for

textiles, 203pharmaceuticals, 203

strange disease in Japan linked topharmaceuticals sold by, 210

total sales and employment in the1950s and 1960s, 204

Ciba Aktiengesellschaft Basel. See CibaCiba Specialty Chemicals, 219Ciba-Geigy (Switzerland), 53

concentrating on the upper end ofthe market, 65

development since the 1970s, 213expansion of R&D and other

activities abroad, 216formation of, 14, 202less diversified than the German

firms, 59

merging with Sandoz, 11, 81as a multinational firm without a

home market, 213name changed to Ciba in 1992, 217new guidelines introduced in 1990,

215production and R&D facilities

abroad, 67pulling out of joint venture with

Bayer, 69sales, profit and profit margin in

1995, 311in Spain in 1973, 387total sales of, 213

CISinvolved in financing the chemical

bubble, 356standing credits to SIR-Rumianca in

1978, 358civic traditions in Italy, 366Clapham, Michael, 300Clariant, 219Claude, Georges, 275Clean Hands, 361cleaning products, exported by

Germany, 426client analysis approach, 267clients

new relationships with, 268transforming the relationship with at

Rhône-Poulenc, 267Cloratita, 376clusters of competence, break up of,

80CMA, government relations committee

of, 126coal

absence of in Spain, 377displacement by oil as a feedstock,

298exploration of a greater use of, 61in Japan, 317low-temperature carbonization of,

330rapid replacement by petroleum in

the Japanese chemical industry,318




Index 477

rising price for, 61shift from to petroleum

hydrocarbons, 35coal base, shifting to oil, 403coal business, sold by DuPont, 77coal companies, diversifying into oil in

Germany, 151coal-mining industry in Japan, 319Cofaz, 64collective consumption, politics of,

117–118colonial aggression

new zaibatsu as a political targetfor, 331

by newly emerged groups in WorldWar II, 318

combustion plants, purification of,211

commercial banks. See bankscommercial influence, pre–Second

World War spheres of, 114commercial skills, weak in Spain, 398commercialization competencies of

Japanese chemical companies,309

Commission. See ECcommodities

leading advantage in, 60net divestors in, 105production of, 281strategies to shift from a focus on,

68as a strategy during the 1970s, 56

commodities businessesacquisitions of reducing R&D

intensity, 105operating, 106

commoditization of chemicals, 100commodity chemicals

firms focusing on, 48restructuring difficult in Japan, 337

Compañia Expañola de Penicilina yAntibióticos. See CEPA

companies. See also firmsincreasing control of international in

Spain, 392of national interest in Spain, 377

company research labs, scientificrecognition of, 273

Compart, 363compensation claims, fight against by

Union Carbide, 74competition

aging industries characterized byenhanced, 58

drivers of, 57increased

in every market segment afterWorld War II, 34

by protectionist policies, 27by innovation, 274intense in the chemical industry, 185opening world markets for, 56

competitive componentof corporate strategy, 56

competitive situationof chemical firms

in the early 1970s, 61in the early 1980s, 66in the early 1990s, 72at the turn of the century, 78

on the market for chemicals in 2002,79

competitive strategiesenvironment of, 57–60product- and market-related

categories of, 56of the world’s largest chemical

companies, 53–81competitive weaknesses in Britain,

286competitiveness in the share of the

production of chemicals, 412competitors, based on crude and

backed with state capital, 63Comprehensive Environmental

Response, Compensation andLiability Act. See CERCLA

computer controls, reducing workforces, 4

computer manufacturing, compared tothe chemical industry, 8

concentration in Germany in 1990s,162




478 index

concurrent engineeringdeveloped at Rhône-Poulenc, 267development process for

pharmaceuticals and, 272project organization allowing for,

274conglomerate membership in Japan,

98conglomerate structure, keeping

Japanese chemical firms smaller,98

Conocojoint venture with Monsanto, 62purchase by DuPont, 63sold by DuPont, 77

Consejo Superior de InvestigacionesCientificas, 384

consolidationin the chemicals industry, 186via mergers in the U.S. in the 1920s,

86Consolidation Coal, 63Consorcio Quimico Español

formed by Cros, UEE and industrialbanks, 383

purchasing Bayer and Schering, 383constituent enterprises.Seeenterprisesconstruction project

manager, 260for new production facilities, 260

continuous production.Seeproductionco-operative capitalism in Germany, 25co-operative networks. See also

networksU.S. firms management under during

World War II, 32coordination failure in Britain, 85core fields, expanding market share in,

163Corian cast acrylic business, 188corporate governance

as an element shaping restructuring,108

new mode becoming the norm inthe Anglo-Saxon world, 102

systems explaining the evolution ofthe chemical industry, 83

variations in corporate governance,102

corporate investor. See also investordependence on financing from, 90

corporate raiders, 185corporate strategy. See also strategy

change during the 1990s, 55competitive component of, 56fields comprehended by, 57

corporationsforeign producing in Italy, 347Italy not having a talent for large,

365large indispensable for the chemical

industry, 366restructuring of large, 44strategies followed by, 2

corporatist approach to policy making,293

corruption of Italian political parties,361

Cosmair, 276cost-leadership

firms searching for after the secondoil shock, 63

related to technical leadership, 56Verbund as a key for BASF, 77

Council on Environmental Quality(U.S.), 124

Courtaulds, 74, 84cracking facilities

owned by Borealis, 248set up by BASF, 63

creative destruction in thepetrochemical cycle, 403

creativity, during the petrochemicalcycle, 403

Credito Italiano, 90Cros, 371

manufacturer of phosphatefertilizers, 376

in 1973, 387as a suitable interlocutor for the I.G.,

380cross-border restructuring

(1985–1997), 104cross-national policy learning, 129




Index 479

cross-ownership of companies in Italy,352

crude oil. See oilCuccia, Enrico, 58customer markets, end of the paradigm

of noninterference with,155–156

cyclical products, strategies to stopoffering, 67

Cynamides Convention in Germany, 28

Dainippon Ink & Chemical Japan,311

Daikyowa Petrochemical, 321Dainippon Ink & Chemical, 316Dart, 237DDT, discovery of, 175debt

dangers of financing, 404financing Italian expansion into

petrochemicals, 97as an important source of finance for

acquisition, 106debt-to-equity ratio from takeovers and

leveraged buyouts, 107deconcentration of IGF. See IG FarbenDegussa

entry into top league, 81foreign direct investment, 154largest producer in special chemicals

worldwide, 78receiving crucial support from

bankers, 88Denmark, consumption of LDPE,

HDPE, and polypropylene perinhabitant, 230

Department of Scientific and IndustrialResearch in Britain, 292

Department of the Environment (UK),123

depressed areas, ICI willingness tostart business in, 296

depressionSwiss chemical industry less affected

by, 196worsening in the Japanese

petrochemical industry, 323

deregulation of financial markets,102

deutsche mark, revaluation, 158developing nations

building their own petrochemicalfacilities, 323

catching-up in basic, commoditychemicals, 314

development. See also petrochemicaldevelopment

costs, compensating for, 272partnerships

establishment at Rhône-Poulenc,268

with research laboratoriesupstream, 273

planning, governed by the regulatorysystem in pharmaceuticals,273

plans, launched in Spain, 385Distillers Company, 226distribution channels of German firms,

24distribution methods of L’Oréal, 276diversification

achieved by buying foreign firms,214

corporate growth by in Japan, 314Keiretsu limiting, 98narrow for Japanese chemical

companies, 309replaced by a strategy of focusing on

core sectors, 221strategies of German firms, 23by Ube Industries, 341

diversified group, Rhône-Poulenc as,254

divestitures at Rhône-Poulenc in the1980s, 261

DKB group, 310Docker, Dudley, 293domestic demand for industrial and

consumer chemicals in Spain,386

domestic economic management, stateseeking new roles to replace,117




480 index

domestic market. See also homemarket

abandoned by German chemicalcompanies, 165

insufficient size of Spain’s, 370for multinational firms in Basle, 222as the target for petrochemicals in

Japan, 319Donegani, lack of an adequate

successor to, 349Dop shampoo, 276Dormann, Jürgen, 75, 163Dow Chemical Company (USA), 53

capital stock tripled prior to the1970s, 92

compensation to victims of siliconbreast implants, 74

concentrating on fibers, 59concentration on specialties and

pharmaceuticals, 64diversification in chlorine and

petrochemicals, 31in ethylene and polyolefins, 186expanding divisions, 68financing growth, 95investment into raw-materials, 63joint venture with DuPont, 76leading position in PVC, 178merger with Union Carbide, 81not licensing everything, 182oil and gas subsidiary, 180overcoming major financial

problems, 86plants sold by, 107R&D intensity, 100research intensity, 106return on profit (1995), 316sales of plastics, 177sales, profit and profit margin in

1995, 311downstream chemical users,

developing rapidly in theJapanese domestic market, 322,331

downstream fabricators, 177Dreibund (Union of Three), 25Dreiverban (Association of Three), 25

drug firms. See pharmaceuticalcompanies

drugs, development of new, 100DSM, scrapping polyethylene capacity,

239DuPont (E.I.) de Nemours (USA), 53

academic chemists, hiring, 173academic world, interacting

extensively with, 37acquisition of less efficient

companies, 30black powder replaced by dynamite

and smokeless powder, 171as a cellulose processing company,

173cellulose products, diversification of,

31Chemstrand actively recruited by,

183Corian cast arylic business

established by, 188down hill slide of, 189energy firms purchase in 1981, 63family control of, 99fibers facilities, closing of, 65genetically modified seeds, outlet

for, 188high value-added new products, 184ICI agreement with, 27on the list of the 50 largest

companies in the world, 55new product efforts absorbing huge

amounts of money with verylittle return, 187

not licensing everything, 182not-competing-with-its-customers,

188petrochemicals, backward

integration into, 184polymers and intermediates,

earnings from, 177R&D

effort to commercialize Delrinpolyacetal resin, 177

intensity, 100investment during the 1920s and

1930s, 86




Index 481

restructuring focusing onlife-science and specificchemicals and fibers, 76

return on profit (1995), 316sales increasing but not profits, 445sales, profit, and profit margin in

1995, 311scientific understanding of products

and processes, 173semiautonomous operating

divisions, 172strategy

holding to traditional, 188struggling to adopt a new, 13

synthetic fiber, development of,177

Dutch Windmill Group, 64dye producers, 26dyes

based on similar organicintermediates, 23

decreasing as Swiss exports, 200DyeStar, 77dyestuffs

British textile trade and, 291difficulties faced by in Britain, 291international cartel, 28, 196shortages of leading to government

intervention in Britain, 291Dyestuffs Import Regulation Act of

1921, 26dynamic oligopoly, world chemical

industry as, 369Dyno Industrier, 233DyStar, 75

East Germany, developmentcompromised in, 144

Eastman Chemical, 316East-West partition of Germany,

142EC (European Commission)

controversy with CEFIC over thecost of risk assessment, 132

Directive on Dangerous Substancesin the Aquatic Environment(76/464), 128

Directives76/403 banning PCBs in open

applications, 13482/501 on the prevention of

major accidents, 12796/59 controlling the disposal of

PCBs, 134Fourth Environmental Programme

(1987) tighteningenvironmental standards, 129

proposals for REACH, 132White Paper on EU policy for

chemicals (2001), 132Eckstut, Michael, 71ecological issues, 58ecological modernization theory, 121ecological transformation and

restructuring, 121economic bureaucracy in Spain, 386economic conditions, slowing learning

processes at Rhône-Poulenc,271

economic downturn for Ciba-Geigy,211

economic excellence, models of atRhône-Poulenc, 262

economic nationalism in Spain afterWorld War I, 378

economies of scaleavailable from increases in

petrochemical plant size, 225cyclical effects challenging the

strategy of at Rhône-Poulenc,262

as a fundamental feature of thepetrochemical industry, 234

German chemical industry turningto, 159

project management for, 259–261Edison

diversification into chemicals, 350entry in petrochemicals, 97merger with Montecatini, 350private Italian electrical company,

350privatization of electricity in Italy,

363




482 index

educational and scientific institutions,size and quality of in Spain, 370

EEA (European Economic Area), 199EEC as a favored field of expansion by

German companies, 152–153EEU

Swiss chemical industry exportsdelivered to, 198

Swiss objection against joining, 197efficacy tests for pharmaceuticals, 273efficiency

applying to environmental and safetyconcerns, 404

broadened definition of, 404Egbert, Bob, 181E. I. DuPont de Nemours (USA). See

DuPont (E.I.) de Nemours (USA)Ekofisk petroleum field

changing the course of Norwegianhistory, 231

gas sold to consortium of Europeanbuyers, 232

in the Norwegian sector of theNorth Sea, 231

elastomers, DuPont joint venture withDow for, 76

electrochemical background of ShowaDenko, 330

electrochemicals in Japan, 317electrolysis process, 290Electro-Quimica de Flix, 371Elf

created to exploit petroleum, 278development of chemicals in, 278privatized by the French

government, 279resulting from the consolidation of

three entities, 278starting to take over CEPSA, 391

Elf Aquitaine, 277Elf Atochem, 255Elkem-Spigerverket, 233emission limits approach to water

pollution, 128employees. See also personnel

of CIBA, 204of Ciba-Geigy, 213

of Geigy, 206of Novartis, 219of the Swiss chemical industry, 198,

202employment

in the chemical industry in Britain,286

commitment to maintaining full, 116decreased at the new Ciba, 218in the foreign affiliates of Ciba, 204in the Italian chemical industry, 347permanent working as an exit

barrier in Japan, 324in the production of chemicals by

branch and total manufactures(1970–1990), 443

Swiss share of at Ciba-Geigy, 214in the total production of chemicals

and manufactures (1970–1990),444

Empresa de Polimeros de Sines S.A.,246

Ems-Chemi of Switzerland, 341ENCASO (Empresa Nacional Calvo

Sotelo)commercializing some lubricants

and catalysts in the 1970s, 390establishing a refinery (ENTASA) at

Taragona, 387producing synthetic fuel out of

bituminous coal, 381research department of, 390

end markets, German big playersrefraining from entering, 156

Energia e Industrias Aragonesas EIA,376, 396

engineering contractors, some processinnovators as, 235

engineering firms. See also SEFsadvantages over their clients, 182benefiting from constant feedback,

182loss of control over process

technologies, 181role in Spain, 386

engineering staff, shortage of inBritain, 297




Index 483

engineers. See also chemical engineersdemand for university-trained, 36

ENIabsorbing plants of SIR-Rumianca

and Liquichimica, 357acquiring a large share of

Montedison stocks, 351agreement with Montedison, 357asset swaps, 109formation of, 350joint venture with Montedison, 73loans from ICIPU, 357market situation of, 359reorganizing its chemical division,

361resources of the chemical division

of, 357second agreement with, 360trying to exit, 16

EniChem, 357, 361, 362Enichimica, 357Enimont

formation of, 73, 360world positioning of, 360

ENI-Montedison, 358–367ENPETROL, 391ENTASA, 387Enterprise Reconstruction and

Reorganization Law of 1950,332

enterprisesallocating according to a scheme by

Michael Porter, 60development of all-around in Japan,

325–327leading today’s global chemical

industry, 5merger within a group difficult in

Japan, 315strategy of, 54underlining global identity, 56

entrepreneurial conservatism ofzaibatsu groups, 317

entrepreneurial firmsin Japan, 89seeing opportunities for developing

processes and plants, 181

Environment and Consumer ProtectionService, 123

environmental agenda, 123–124environmental and safety concerns,

applying efficiency, 404environmental controls, 2environmental issues

international organizationsconcerned with, 199

public demand for action on, 117environmental policy

chemical industry and, 118–121development of, 12

in the EU and the U.S., 124–129in terms of distinctive policy

sectors and initiatives, 118incorporated into the standard

political agenda, 123environmental problems, 11environmental protection

demands with regard to inSwitzerland, 198

society’s increasing concern for,210

Environmental Protection Agency(U.S.). See EPA

environmental regulationbefore 1970, 121–123framework action above the national

level, 115in Germany, 128

environmentalists, pressure onshareholders, 136

EPA (Environmental ProtectionAgency)

formation of, 123tracking industrial chemicals, 124

Equal Opportunities for WorthyCompetitors, 320

equity base, constructed to volatility ofdebt levels, 92

equity capital, raising for BASF, 97equity markets, 102, 108Ercros, 393Erdölchemie (EC), formed by Bayer

and BP, 150Erdölchemie GmbH, 226




484 index

Erkimia, recovering from a stormyperiod, 393

Essobuilding a new ethylene cracker at

Mossmorran in Scotland, 239cracker in Stenungsund, 244never able to erode ICI’s dominance

of bulk chemicals, 299Esteve, 398établissements des Frères Poulenc, 255ethanol, produced by MoDo, 227ethylene

crackersclosure in Western Europe, 239doubling the capacity of, 228in Finland, 229in Sweden, 227

domestic manufacturing of in Japan,320

price soaring as a result of thesecond oil-shock, 62

producers of in Britain, 299producing facility launched by

Nippon Petrochemicals, 339production, 285

existing producers forced to addcapacity in Japan, 322

Japanese companies building everlarger facilities for, 332

Mitsui’s entry into, 332slower growth of demand, 322supplied to Hoechest, 151Ube Industries relying on outside

suppliers for, 335ethylene oxide, 181Ethylène Plastique, 236EU (European Union)

breakdown by activity sector in2000, 253

chemical industry, growth of, 5chemical products, percentage of

world output, 5chemicals policy as too complex and

cumbersome, 131Council Directive (67/548) on

classification and labeling ofchemicals, 124

credibility of system assessing therisks of chemicals, 131

environment, experiences with,12

environmental policy, developmentof, 124–129

environmental sophistication, highlevels of, 12

firmsacquiring U.S. companies, 46diversifying in specialty

chemicals, 46German chemicals industry,

regarded as a domestic marketby, 153

Germany leadership role inenvironmental policy, 128

market, forming a unified, 60mean growth 1990–2000, 252political debate about Norway

joining, 231regulation drawn up at the European

level, framework and contentof, 115

as the regulator state, 117Spain integration into since 1986,

392Euro Chlor, agreement not to use the

mercury process, 135Europe. See also specific countries;

Western Europeacquisitions in the chemical sector,

47antitrust policy, 22chemical industry, pressures on,

130–133chemical industry, reshaping the

structure of, 103chemical producers, reorganization

of existing, 48chemical-producing firms,

transformation of leading, 8concentration reduction after World

War II, 32corporate governance structures,

moving toward effective,108




Index 485

countries increasingly able to tradefree from bureaucratic controls,197

diversification towards chemicalswith higher value added, 364

EEU and the EFTA, division into,197

employees wedded to theircompany, 59

entry barriers, lowering after WorldWar II, 32

formation of new companies lesspronounced, 48

global chemical products, highlycompetitive status in, 15

home market not homogeneous,60

restructuring driven by market andgovernment intervention, 44

European Chemical Industry, 120. Seealso CEFIC

European Community Paris Summit(1972), 123

European companiesintense cross-border restructuring

activity of, 104relying on debt for financing, 92

European conventions for groupingsectors of activity, 252

European Economic Area, 216European Environmental Bureau,

131European Union. See EUEuro-plant (Euro-Fabriken), 153evolutionary phases of the Japanese

chemical industry, 317–325Exchange Rate Mechanism, joined by

Britain, 304exchange rates

destabilizing of, 199fluctuations, 212, 215

exit strategies from the chemicalindustry, 71, 81

exitingfrom commodity petrochemicals,

338from petrochemicals in Japan, 324

expansionabroad by the German chemical

industry, 152of the British chemical industry,

301explosives

importance to war effort, 291scientific and technological base

shared with dyes, 26exports

Britain, exceeding imports in, 287of chemicals

by branch (1952–1992), 420by country, 419

growing faster than overall exports,419

markets once again dominated byHoescht, BASF, and Bayer, 156

Swissgeographical distribution of, 201rising from 1953 onwards, 197

Swiss chemical industrycomposition of, 200share in total industrial, 200

external growth at Rhône-Poulenc,258

external relations at Rhône-Poulenc,268

Federal Ministry for Research(Germany), 160

Federation of British Industries, 293,294

Federation of German Industries (BDI),132

Federation of the British DyestuffsIndustry, 294

feedstocksimports into Japan after World War

II, 312poor economic performance in spite

of cheap, 239rising costs of, 158

FEFASA, 381fermentation technology, 298Ferrara plant, 363Ferrer Internacional, 392, 398




486 index

Ferruzzi, 70assisting Schimberni, 58core business of merged into

Montedison, 363debts of, 363Montedison taken over by, 359reconstruction to form the

Compart-group, 73Ferruzzi, Serafino, 359Fertiberia, 396fertilizers

as a big loser of the 1970s inGermany, 157

division sold by Rhône-Poulenc, 70Hydro as the largest producer of, 68lowest export growth rates, 421new companies related to the

manufacture of, 380FIAT, Bonomi-group of, 58fiber cartel, 157fiber crisis, 157fiber intermediates, BASF as the world’s

greatest supplier of, 147fibers market, reconstruction of, 65Fina, 278, 279finance

efficiency in, 404industrial developed in Italy along

the German model, 90reliance on internal in Japan, 98

financial aspects of the chemicalindustry, 82

financial firmscreated to engineer the purchase of

plants in commodity chemicals,103

organized to acquire petrochemicalplants, 106

financial innovation, 404. See alsoinnovation

financial institutions, state owned longterm in Italy, 351

financial marketsdiscipline very weak from Japanese,

324enabling restructuring, 106regulatory changes in, 100

financial policyimpacting the financing of growth,

92new adopted for Ciba-Geigy, 217

financial problems, restructuring in the1970s, 11

financial questions, important to thechemical industry, 58

financial system. See also nationalfinancial systems

instrumental in the firstindustrialization of Germany, 87

retarding development in Japan, 89financing, crucial for maintaining

leadership at the firm level, 83Finaneste S.A., 246Fine Chemical Division, organized by

Mitsui Toatsu, 339fine chemicals. See also chemical(s)

European diversification toward,364

rate of production of, 409Finland


development of the petrochemicalindustry in, 14

first petrochemical plant in, 229–231import of polyolefins, PVC, and

polystyrene 1965–1972, 230Montefibre sold to in 1996, 362petrochemical plants on the edge of

being uncompetitive, 234plastics consumption per inhabitant,

230firms. See also chemical firms;

companiesstrategic agreements among, 21

firm-to-firm networks, reducingdistribution costs, 25

First Chemical Industries, 339first phase of the Japanese chemical

industry, 317–318First Plan

clarifying the overall purpose ofpetrochemicals, 319




Index 487

formalized in Japan, 319formalized in July 1950 in Japan, 42

Flamm, Alec, 63, 70Fluor, 235FMC, 316FNCE (Fabricación Nacional de

Colorantes y Explosivos), 371back into the hands of its founders,

383example of limitations faced by

Spanish firms, 378fee paid to the Unión Española de

Explosivos, 379goals of, 378as great business for both sides, 379paying a fee to EQ de Flix, 379without a consistent support from

the state, 380without minimal technological

capabilities, 380follower countries in Europe, 16Fondiaria, 363food, gene-manipulated, 73foreign affiliates for Ciba, 205foreign employees, political pressure

to restrict the number of inSwitzerland, 209

foreign firms, generating usabletechnology for Japanesecompanies, 315

foreign investment. See alsoinvestment

flourishing in Spain, 377of the German chemical industry,

165as an instrument for technological

transfer in Spain, 386massive in Spain, 385of the Swiss chemical industry, 222

foreign participation, general ruleforbidding in Spanish firms, 380

foreign shareholders. See alsoshareholders

registration rules allowing theexclusion of, 217

standards, norms and aspirations of,221

foreign suppliers, dependence on bythe Swiss, 201

foreign technologies, Japanesechemical industry remainingdependent on, 417

foreign technology. See alsotechnology

as cheaper and more efficient thanresearch and innovation, 383

importation and incrementalimprovement of the latest bythe Japanese, 313

foreigness of European economies toeach other, 152

Foret, 376forward integration

by the IGF-successors, 156into specific end-product

manufacture, 188Fosfatbolaget, 228Foster Wheeler, 386Fourtou, Jean René, 262fragmentation

of the Italian chemical industry,97

in Italy, 91reinforced in the U.S., 85

Francebreakdown by activity sector in

2000, 253CFP, involvement in, 278chemical exports, 419, 426

by branch (1952–1992), 432and imports, 310

chemical industry, reorganization,255, 279

chemical production by branch(1970–1990), 417

chemicalsgrowth rates in the production of

(1963–1991), 410production of, 412, 417

Ciba-Geigy research centerestablished in, 216





488 index

France (cont.)European chemical industry, ranked

second in, 251export market share, relatively

stable, 421German chemicals industry. as a

sales market for, 153investors in Spain, 387Japanese exports and imports of

chemical products, 324merger strategy, 14patents issued 1985–1995, 337petrochemicals, best performance

in, 410plastics consumption per inhabitant,

230Rhône-Poulenc, saving, 64SEF licensing, market share of

(1980–1990), 39SEFs’ services, percentage of total

market of, 39specialization index of the gross

output of chemicals, 411specializations in the chemicals

trade (1952–1992), 433specializing in perfumes and

cleaning goods, 449total manufactures (1963–1991), 410Total, reduction in direct

participation in the capital of,279

trade balances, 1980–2003, 349turnover and mean growth, 252value added per worker in the

production of chemicals(1963–1990), 441

Franco’s ideological industrial policy,382

Franco’s regime, 380French Oil Institute, 381, 390Friends of the Earth (UK), 123fuel oil sales, expansion in Germany

from 1957, 148Fuji Photo & Film, 311functional capabilities, shared by

Japanese chemical companies,315–317

Furukawa Petrochemical, 320Fuyo group, 310

GAF, 71, 107Gallego, Antonio, 383, 384Gardini, Raul, 359

readiness to become boss of theItalian chemical industry, 360

selling share of Enimont to ENI, 361suicide of, 361

Geigy, 202annual reports of, 204competition eliminated for, 196concentrated more on the U.S.

market than Ciba, 207decision to produce

pharmaceuticals, 204as a dye manufacturing firm, 196expanding in an evolutionary,

path-dependent way, 209growing more rapidly than Ciba, 207main product lines, 207merger with Ciba, 209production of auxiliary and refining

products for textiles, 203total sales, 206

General Headquarters, advisory panelfor in Japan, 319

general purpose technology of thechemical sector, 36

generics within pharmaceuticals atCiba-Geigy, 214

genetic engineering, merger withbiotechnology, 161

genetically modified seed, oppositionto in Europe, 186

Genex, 339geographical diversification. See also

diversificationat Geigy, 207maintained, 221of Swiss exports, 201

geographical expansion for furthergrowth, 67

geographical sales areas at the newCiba, 218

German Chemicals Law of 1980, 127




Index 489

Germany. See also West Germanybank-centered system, traditional

resistant to change, 109chemical engineering, resisting as an

autonomous discipline, 37chemical exports and imports, 310chemical industry

after World War II, 141–167continuing to move abroad, 165effects of the oil price crisis, 157evolution and financing of, 87–88failing to recognize the potential

of biotechnology, 159and manufacturing production

growing, 4101980s as the peak years for, 415postwar (World War II), 33protracted success of, 12quick recovery in the 1950s, 145reconstruction of, 145–146state dependent on during World

Wars, 121technocratic culture in, 146–147transformation of coal to organic

products, 148turning to cheap mass production

and economies of scale, 158World Wars strongly affecting, 415

chemical plants, absolute size for,441

chemical productionby branch (1963–1991), 414by branch (1970–1990), 415

chemicalsaverage annual growth rates in the

production of (1963–1991), 410export by branch (1952–1992),

424, 425production of, 415production of (1968–1989), 412

draft environmental regulation,tension with Britain over, 126

East-West partition of, 142employment in the total production

of chemicals and manufactures(1970–1990), 444, 445

environmental regulation, 128

exports of chemicals (1952–1992),419

firmsdistribution channels of, 24importing for both sides during

the Spanish civil war, 380investment in marketing

capabilities, 24profitability of, 163spillages into the Rhine and Main,

129technical assistance offered by,

24industrial chemicals, best

performance in, 410international chemicals, best

performance in, 415Japanese exports and imports of

chemical products, 324licensing agreements, 40linkages between government and

chemical firms, 26manufacturing abroad compared to

Japan’s expert orientation, 16oil shocks in the 1970s, absorbing

effects of, 157, 410patents issued 1985–1995, 337petroleum, best VA in, 434Second World War devastating for,

31SEFs’ services, percentage of total

market of, 39Spaniards viewed as not technically

capable partners, 379specializations in the chemicals

trade (1952–1992), 427specializing in dyes, tanning, and

color product, 449technical education, 289technological lead remaining

substantial after World War I,292

as a technology generator andinnovator, 313

total manufactures (1963–1991), 410trade balances, 1980–2003, 349turnover and mean growth, 252




490 index

Germany (cont.)value added per worker in the

production of chemicals(1963–1990), 441

world leaderin exporting chemicals, 426in the synthetic organic sector by

the eve of World War I, 23Gesparal holding company, 277Giegy, 14global capital markets. See capital

marketsglobal market orientation, 220global organization of the chemical

industry, 120globalization

continuingduring the 1970s for Ciba-Geigy,

212during the 1980s for Ciba-Geigy,

215for the new Ciba, 218

reducing national differences, 72Global-500 list of 2002, 81Gore, W. L., 188governance structures, required by

businesses, 83government. See also national

governmentscontroversial industrial and trade

policies implemented in Spain,370

high dependence on chemicalindustries, 115

interference in the health section,215

intervention by in Italy, 366low-cost loans from in Japan, 332policy

British chemical industry as awhole unhappy about, 304

in Japan, 312–313relations of chemical firms, 119role of in the chemical industry, 50

gray list, 128Great Britain. See Britain; UKGreat War. See World War I

green consumerism, 135Green Party, 127green states in the EU, 128Greenpeace

call for a phase-out of theproduction of chlorine, 135

effect on Shell, 73Grenzgänger, 209group affiliation of Japanese

enterprises, 325group enterprise organization,

developed after World War II inJapan, 314

group membership, guaranteeingstable growth, 314

group structure as an obstacle forexternal corporate growth inJapan, 314

growthmodified strategy for Ciba-Geigy in

the early 1980s, 214orientation toward becoming

dysfunctional and harmful,315

possibilities for further, 67rate by volume from 1990 to 2000,

252side effect of unfettered in the

German chemical industry, 146growth-oriented investment behavior

of managerial enterprises, 315Gulf, 97Gulf Coast, Dow move to, 180Gulf Oil, 239

Haber-Bosch process, 292Haberland, Ulrich, 146Hafslund, 233hair dyes, market for, 276Hansen, Kurt, 145, 163Hanson, Lord, 69Hanson Trust, 109hardware stores as the principal

network for chemical productsin France, 255

Harvey-Jones, Sir John, 304hausbank system, 109




Index 491

hazardous chemical use and exposure,128

hazardous substances, 124, 127HDPE (high-density-poly-ethylene), 67,

230health sector, 274, 275heavy chemicals team of the

Anglo-American ProductivityCouncil, 296

heavy inorganic industry, Spanishindustry dominated by, 385

Henderson, Sir Denys, 57Henkel, 78

entry into top league, 81expansion strategy into the EEC, 153sales, profit and profit margin in

1995, 311Henkel, Jost, 155Henkel, Konrad, 155Hercules

acquisition of less efficientcompanies, 30

joint ventureswith ENI-Montedison, 359with Sumitomo Chemical, 340

net gain or loss as a percent onturnover, 1974–1981, 356

Heyman, Sam, 107Hibernia, oil-refinery, 151Hidro-Nitro, 381high production volume testing

program, 130Hilger, Wolfgang, 67Himont

affiliate of Montedison, 70considered for sale, 363formation of, 359joint venture with Statoil, 245Statoil licensing agreement with,244

Hoechst (Germany), 53accidents during reconstruction of,

75American subsidiaries, 154bankers, receiving crucial support

from, 88BASF’s dominating position, winning

back independence from, 144

behind American competitorsbefore World War II, 142

in the big three in 1980, 445Celanese, purchase of, 69coal to oil move, 150coatings division purchased by

DuPont, 77concentration

on pharmaceuticals andspecialties, 163

on the upper end of the market,65

confrontation with the workforce,59

fibers as a pillar of profit, 65HDPE production, 157Health division sale to

Rhône-Poulenc, 258industrial accidents leading to the

demise of, 58investment-policy of, 147joint ventures

with Bayer, 75with Courtaulds, 74with Mitsubishi for paints, 69

Kuwait, agreement with, 63on the list of the 50 largest

companies in the world, 55merging

pharmaceutical division intoAventis, 11

with Rhône-Poulenc, 13, 74, 76,81


pain-reliever Antipyrin, 23penicillin production, 142pharmaceuticals

moving further into, 147successful in the 1980s, 162

polypropylene division, 77production and R&D facilities

abroad, 67reconstruction of the European

economies, exploiting thegrowth potential of, 97

reemergence in the 1950s, 32




492 index

Hoechst (Germany) (cont.)sales, profit, and profit margin in

1995, 311selling more in the U.S. than in

Germany, 162Streptomycin production, 143synthetic fibers, developing a wide

array of, 177technology followers, starting as, 23truncation of, 75Uhde, sale of, 80University of Erlangen, link with, 25West German polyethylene capacity,

intending to reduce, 239Hoechst Life Sciences, 253Hoffman-La Roche, 202

dioxin release at Seveso, 127specializing in pharmaceuticals from

the start, 196home market, 59. See also domestic

marketHong Kong, Japanese exports and

imports of chemical products,324

horizontal characteristics of thechemical industry’senvironmental impact, 119

hostile takeovers, unheard of in Japan,110

Houdry, Eugene, 179HPV testing program, 130Hüls, 151Huntsman, 5, 48Hydro

concentrating on fertilizers, 59emergency exit constructed by, 81entry into oil and gas, 62oil as the most important earner, 63performance determined by the

price of crude, 68reducing chemical side, 78

hydrogen chloride, large-scaleemissions of, 122

hydrogen peroxide, 341hydrogenation lubricants, 390hydrogenation plants

from coal-based, 150

Leuna ending up in the Russianzone, 142

never put back in use in WestGermany, 142

IBYS, 376ICCRI, 358ICI (Imperial Chemical Industries), 53

alliances with other firms, 27BP Chemicals, asset swapping deal

with, 239Britain, as the industrial flagship in,

288British chemical industry, remaining

dominant in, 299–301capital stock doubled prior to the

1970s, 92change throughout the 1990s, 305changes in, 11competition in the global market, 15concerns about in the 1960s, 303cracker, building a large, 234cracking plant at Wilton, 299de-merger within, 100division in 1992 into two businesses,

109dyes cartel, 29engineers, limited interests in

university-trained, 37European Vinyls joint venture with

Enichem, 247explosives, computer-aided

optimization system for, 45as exponent of a certain set of ideas

and defender of the central roleof manufacturing, 301

financing growth, 96focus on special products and

geographical diversity, 69formation of, 27, 294–296government relationship damaged

by the election of Mrs.Thatcher, 304

hostile takeover bid, split after, 73industrial chemicals businesses,

selling remaining, 305inventions, key, 295




Index 493

investment plans, cutbacks in, 302joint ventures

with A. P. Møller, 228with Enichem, 45

LDPE market, withdrawing from,239

on the list of the 50 largestcompanies in the world, 55

management capabilities after WorldWar II coupled with lack ofcapital, 33

merger as a matter of public policy,295

model of setting up the company asa “chosen instrument,” 288


in 1960, 445Nitrogen Cartel, 29Patents and Process Agreement

with DuPont, 27pharmaceuticals business, selling

off, 305Phillips Petroleum, joining forces

with, 225political relations handled well by,

298polyethylene, exiting from, 45polypropylene business in Western

Europe exchanged for BASF’sacrylics operations, 247

research, investing a smaller share ofprofits in, 85

salesdecreasing profits on total, 445profit and profit margin in 1995,

311success, seen as a remarkable,

288tripartite, characterized as, 300

ICIPUbankruptcy of, 357financed by Mediobanca and IMI,

356founded to finance public utilities,

356loans to all chemical companies, 356

loans to the chemical industry1963–1977, 357

standing credits to SIR-Rumianca in1978, 358

Idemitsu Petrochemical, 321IFE (Instituto Español de

Farmacologia), 384IG. See Interessen-GemeinschaftIG agreement among the three dye

producers, Ciba, Geigy, andSandoz, 203

IG Farben, 27agreements with other firms, 27assets confiscated without any

compensation, 32broken apart in the early 1950s,

32central to the political economy of

the Third Reich, 121chemical industry’s entanglement

with, 183dyes cartel, 28effects of World War II, 141in the Electro-Quimica de Flix EQF

(with Cros) and FNCE, 371establishment in 1925 in Germany,

294harmless in the three Western zones

of occupation, 144heirs of in 1973, 387initiating programs to improve

scientific understanding, 173linked to war crimes, 32Nitrogen Cartel, 29as a partner to FNCD, 379policy of change with roots in the

pre-war era, 143I.G. Farbenindustrie

Aktiengesellschaft. See IGFarben

IGF successors. See also BASF; Bayer;Hoechst

beginning to unfold a full-rangeportfolio, 156

exploring the potential ofpetrochemical technology, 148

Ilford, 214




494 index

IMIcredit with Montedison, ANIC, and

SIR-Rumianca, 356in dire straits by 1979, 357as the principal financial institution

involved with SIR, 351standing credits to SIR-Rumianca in

1978, 358immature technological competence

of Japan, 313Imperial Chemical Industries. See ICIImport Duties Act of 1932 in Britain,

26import penetration

in the chemical and manufacturingindustries in Britain, 287

of the Italian chemical market,347

in plastics, 305rise in after 1970, 286

importsafter World War II in Japan, 312geographical distribution of Swiss,

201Inabata & Co., 340incident driven interface between

government and environment,119

incidents, leading to unfavorable mediacoverage, 129

industrial accidents, 58industrial capitalism, 2industrial chemicals, not marketed as

final products, 132industrial flagship company, 288industrial gases, 275industrial needs, university focus on,

36industrial politicians, defeating the

productioneers in Britain, 293industrial relations in cooperative

minded environments, 59industrial research laboratories. See

also researchdeveloped by German chemical

firms, 88industrial securities. See securities

industrialization of Spain, 385, 392industries. See also national industry

capital intensive, 1scholarly studies, 10

industry associations, 50, 119. See alsoChemical Industries Association

Industry Structure Council, 323inflation

as a fundamental problem, 116periods with high, 212

information age, 4information barrier for a bureaucratic

organization, 312information leaks, 34in-house development

by large companies, 41as a source of technology, 40

INI (Instituto Nacional de Industria),381

monopolistic ambitions andobstructions of, 381

trying to get American economicand technical assistance, 390

innovation. See also financialinnovation; organizationalinnovation; repeated innovation

competition by, 274cyclical nature of, 403differences between

pharmaceuticals and chemicalsat Rhône-Poulenc, 271–274

impact on capitalist systems, 403from investments in research in the

U.S., 414L’Oréal basing new products on

technical, 276management of at Rhône-Poulenc,

258no Spanish company making a

relevant contribution to, 369not initially very well understood,

170potential for, 405regaining linkages with downstream

markets, 34shifting the competitive advantage

of firms, 23




Index 495

slowing in pharmaceuticals, 405Spanish government’s first enduring

efforts to foster, 393transformation related to at

Rhône-Poulenc, 262innovation project management

as means of integration atRhône-Poulenc, 262–265

specificities of, 267–271innovation projects

in the chemical division atRhône-Poulenc, 266–267

distinctive characteristics of forpharmaceuticals, 271

innovative activities, environmentalconcerns changing selectioncriteria for, 211

innovative capabilities, 400innovators, required for the second

Industrial Revolution, 288inorganic chemical firms, 22inorganic chemicals

lowest export growth rates, 421Spain an exporter of, 385U.S. production, 29

inorganic sector, pricing in, 23insecticides, Geigy R&D for, 203Institut Quimic de Sarrià, 378institutional investors. See also

investorsas important shareholders of

industrial firms, 102shift to today’s oversight by, 99

institutionalization of environmentalconcerns and agendas, 123

Instituto Español de Farmacologia(IFE), 384

Instituto Nacional de Industria. See INIintegrated teams at Rhône-Poulenc,

268intellectual property, 273Intercontinental Quimica, 393interdependency of chemical

companies, 172Interessen-Gemeinschaft

formation of, 196gradual dissolution of, 204

partition of product lines within,204Interessengemeinshaft (Community of

Interests), 26interest

eroding profit margins of Italianchemical firms, 98

stable cash flow required to repay,107

interest ratesimpact on chemical firms during the

1970s, 97impacting debt levels, 92

interfirm agreementsGerman, 24in R&D, 47sectoral distribution of since 1988,

46interfirm commercial alliances,

developed by Germancompanies, 25

interfirm networks, 21during and after World War II, 31of German companies with British

oil companies, 33opportunities in the U.S. opened by

World War III, 32in R&D, 47restructuring process involved in

production and R&D, 45intergroup rivalry, making mergers

across groups in Japan, 314interindustry associations, 45interindustry mobility barrier for

individual companies in Japan,314

intermediatesenabling the expansion of the

chemical industry in the U.S.,178

import of to Spain, 377producing, 59

internal market. See also home marketas an advantage in the U.S., 29of the American economy, 85

internalizing advantages, changing,222international cartels, 28, 400. See also

cartels




496 index

international chemical industry view,120

International Council of ChemicalAssociations (ICCA), 120

international development by L’Oréal,276

international dyestuff cartel, 196. Seealso cartels

international goods and capital flows,abolishing restrictions for, 198

International Petroleum InvestmentCompany of Abu Dhabi, 250

International Standard IndustrialClassification revision 2 (ISICrev. 2), 451

internationalizationof the chemical industry, 114at Ciba-Geigy, 214forms of, 203in Germany, 152of Japanese chemical companies,

310motives for the strong drive toward,

208of ownership, 221of rules and procedures, 198by Ube Industries, 341

intervention by the state in Spain,377

interwar period, 30investment. See also foreign

investmentapproved by the Italian government

between 1969 and 1972, 355in chemicals, 405cutbacks in ICI’s plans for, 302decisions of ICI interpreted as

having broader politicalconsequences, 302

encouraged by MITI’s newguideline, 322

in facilities wholly owned by thetechnology owner, 236

international fundingindustrialization in Spain, 392

in petrochemical plants in Europe,225

in Spain by Swiss and German firms,386

strategies adopted by petrochemicalenterprises in Japan, 331

investors. See also corporate investor;institutional investors

financing from corporate, 90French in Spain, 387Spain attractive to foreign, 392

invisibility for Japanese chemicalcompanies, 311

invisible player, Japan’s chemicalindustry remaining, 309

Ireland, turnover, 252IRI, 352ISIC code 351, 53Isor, 352isotactic polypropylene, 349Italiana Carburo di Calcio, 91Italy

American and German technologies,dependent on, 419

chemical companiesin 1971, 354net gain or loss as a percent on

turnover, 1974–1981, 356specializing in allied fields, 352

chemical exports and imports, 310chemical industry

badly placed in, 347concentrating on niches not

requiring advanced researchand high technology, 365

currently made up of small andmedium size firms, 363

efforts to establish, 348evolution and financing of, 90–91present structure of, 364reasons behind failure in, 348rise and fall of, 1950s–1990s,

347–367sad story of the result of a host of

deficiencies, 365share of production in 2003, 364

chemical plants quite large, 442chemical production by branch

(1970–1990), 419




Index 497

chemicalsaverage annual growth rates in the

production of (1963–1991), 410exports of, 426, 435production of, 419share in exports of (1952–1992),

419share in the production of

(1968–1989), 412consumption of LDPE, HDPE, and


employment by plant in the totalproduction of chemicals andmanufactures, 444, 445

as a follower coun

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