BASF Leads Return to Growth for Global Chemical Brands

BASF (brand value up 15% to US$8.3 billion) is leading the chemicals industry as chemicals brands across the world return to growth after the widespread disruption of the COVID-19 pandemic, according to a new report from brand valuation consultancy, Brand Finance.

The chemicals industry suffered big losses in brand value during the pandemic, but with big restrictions on economic activity unlikely to be reintroduced in the Western world, most top brands are now above pre-pandemic valuations.

Every year, leading brand valuation consultancy Brand Finance puts 5,000 of the biggest brands to the test, and publishes around 100 reports, ranking brands across all sectors and countries. The world’s top 25 most valuable and strongest brands in the chemicals industry are included in the annual Brand Finance Chemicals 25 2022 ranking.

BASF’s brand value growth of 15% is largely attributed to improved revenue forecasts and a reduction in the weighted average cost of capital for the firm, creating further in-vestment opportunities for the German brand. With increased demand for recycling and environmentally sensitive services, the BASF brand is well positioned to take advantage of the changing market conditions.

This potential for further growth will offset BASF’s significant costs from the Russian invasion of Ukraine, including the loss of significant assets with Russian and Ukrainian connections. Further, the company’s investments in the Nord Stream 2 gas pipeline create further risks of tarnishing the BASF brand. These issues are correlated with BASF losing its crown as the strongest chemicals brand in the world to DuPont.

“The COVID-19 pandemic brought many restrictions across the world, which had very big and direct impacts on brand values in the chemicals industry,” David Haigh, Chairman and CEO of Brand Finance, said. “As the world looks to a post-COVID future, chemical industry brands, led by BASF, are benefiting from strong demand for their products. Brand values have grown this year and are now largely above pre-pandemic levels.”

DuPont (brand value down 6% to US$1.9 billion) is the strongest chemicals brand in the world with a Brand Strength Index (BSI) of 85.2 out of 100 and a corresponding AAA brand rating. The American brand has achieved a 5.2 point increase in brand strength, and in doing so, has jumped three ranking places amongst chemicals brand to take the crown for strongest chemicals brand.

In previous years, DuPont’s brand strength was subdued by various environmental and employee disputes with associated litigation around the safe and proper disposal of chemicals. However, an increased focus on corporate and social responsibility is improving the brand’s reputation amongst key stakeholders in the industry and communities where it operates.

Rongsheng Petrochemical (brand value up 43% to US$2.3 billion) achieved very strong growth this year, rising two places in the chemicals ranking and jumping from 10th to eighth place amongst global chemicals brands. The Chinese brand owns various globally significant facilities, including an integrated refining-petrochemical complex with the capacity to produce 40 million tons of plastics per annum.

As the world’s largest producer of various plastics, Rongsheng Petrochemical faces both risks and opportunities from increasing global concerns about the usage of plastics and carbon emissions. The brand value of this giant Chinese brand is growing in connection with increased research and development of clean technologies, while its world-leading refining-petrochemical complex recovers and purifies carbon dioxide from the plants for use as feedstock to produce downstream chemical products (polycarbonates).

More broadly, the brand is likely to become the largest polycarbonates producer in China this year, and the brand is also the largest supplier of solar-grade EVA for the photovoltaic industry. This creates further opportunities to grow and develop its brand in coming years as demand for such products increases.

For many years, INEOS has been one of the largest companies in the UK but given the nature of its operations has remained relatively unknown to the public at large.
Over the last few years, CEO Jim Ratcliffe has focused on the importance of building a brand to provide a metaphorical strategic compass for the direction of the company internally, while also benefiting from the obvious external rewards of a strong reputation.

As a result, the brand has increased 60% in value to US$1.5 billion and is a new entrant to the Top 25 rankings as the 17th most valuable chemicals brand globally.

“Sailing, cycling, and now Formula 1 partnerships have not only put the brand on the map for many, but show a tangible manifestation to the public of Jim Ratcliffe’s desired brand characteristics for INEOS,” Haigh said. “It is an excellent example of how companies can use the associations of sports partnerships to accelerate themselves into the limelight.”