BASF again Named World’s Most Valuable Chemicals Brand
Brand Finance Report Sees Top 25 most Valuable Chemicals Brands Continue to Contract in Brand Value
Long-term trends including shifting consumer sentiment and its knock-on effects for the industry, have continued to play a role in hampering chemicals brands. Issues that have been compounded by Covid-19, which has brought about a slowdown of industrial sectors, weaker economic outlooks globally and falling oil prices, all leading to faltering brand value growth.
BASF Claims 7-year Stronghold at #1
Cementing its position as the global industry leader, German juggernaut BASF has once again defended its title as the world’s most valuable chemicals brand. Despite celebrating 7 years at the top of the Brand Finance Chemicals 25 ranking, BASF has suffered another brand value decrease this year, dropping 8% to $7.3 billion. As with brands across the sector, BASF cites Covid-19 as its main concern, claiming the virus could reduce global chemical production growth to a mere 1% – the worst growth for the sector since the Great Recession. The automotive market – which accounts for approximately 20% of BASF sales – has taken a significant hit to production over the last year, compounding troubles for the brand.
Aside from determining overall brand value, Brand Finance also evaluates the relative strength of brands through a balanced scorecard of metrics on marketing investment, stakeholder equity, and business performance. Once more defending its position, BASF remains the world’s strongest chemicals brand, a title it snagged for the first time in 2020, despite its Brand Strength Index (BSI) score dropping slightly this year to 84.2 out of 100 and its brand strength rating being downgraded to an AAA-.
BASF is well-recognized within the chemicals industry for its corporate climate action and water security efforts, pledging to become carbon dioxide neutral by 2030. The brand continues to embrace new technology and innovative climate friendly production methods, including digitalizing its chemical plants, showcasing its commitment to becoming greener.
Savio D’Souza, Valuation Director at Brand Finance, commented: “Once again BASF dominates the chemicals sector, claiming the title of the world’s most valuable and strongest chemicals brand. Facing yet another year of economic headwinds – the difficulties surrounding Covid-19 only compounding previous troubles around Brexit and the US-China Trade War – the German juggernaut has certainly been put to the test. BASF will be relying on the sheer scale of its operation and strength of its brand to weather the storm and hopefully see a return to positive brand value growth in the near future.”
SABIC Overtakes Dow
SABIC has overtaken Dow to become the second most valuable chemicals brand in the ranking, on the back of resilient business performance. Dow’s considerable 23% brand value loss is the result of a weakened outlook for growth in the business in its core markets.
SABIC (down 7% to $4.0 billion) is committed to its vision of becoming the world’s largest petrochemical company by 2030, undertaking several strategic partnerships over the last year and aligning with the chemical arm of oil and gas leader Saudi Aramco. The brand has strategically aligned with the UN’s Sustainable Development Goals (SDG) and developed more open and creative collaborations with other companies, NGOs, academia, and governments to better meet the expectations of customers and stakeholders.
“SABIC continues to consolidate its position near the peak of the chemicals industry, attaining a AAA- brand strength rating last year and this year becoming the second most valuable chemicals brand. The brand has maintained its investments in its global corporate marketing campaign while also strengthening its highly regarded specialized technical sales teams. Both of these have contributed to its strong performance this year in spite of tough economic conditions,” said D’Souza.
In the wake of their 2019 demerger, Dow (brand value $3.7 billion), DuPont (down 9% to $2.0 billion) and Corteva (down 20% to $1.4 billion) have all seen their second consecutive year of decline in brand values as newly separated entities, as they continue to adjust to life apart. Dow and Dupont both have very strong brands with brand strength ratings of AAA-, which the companies will no doubt leverage to return to growth in the coming years.
Dupont started last year under rocky circumstances with the removal of its CEO and CFO due to subpar performances. Now under Ed Breen’s leadership – an architect of the Dow and Dupont merger as well as the breakup – the brand has taken no time to start streamlining, undertaking several non-core divestitures.
China’s Rongsheng Petrochemical is fastest Growing
Zhejiang-based Rongsheng Petrochemical (up 14% to $1.6 billion) is the sector’s fastest growing brand after seeing profits more than triple in the past year, bolstered by the launch of its 400,000 barrel-per-day Zhejiang Petrochemical Co (ZPC).
Also hailing from China is the ranking’s only new entrant for 2021, Xinjiang Zhongtai Chemical, with a brand value of $1.2 billion. Entering the ranking in 20th position, Xinjiang Zhongtai is the largest state-owned enterprise in Xinjiang and is as a major market player due to consistently increasing revenues and widespread influence on the regional economy through the long value chain of its integrated operations.
The full Brand Finance Chemicals 25 2021 report is available here.
Source: Brand Finance
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