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CHEMICAL STRATEGIES
ExxonMobil's chemical business achieves attractive returns through the effective
implementation of focused long-term strategies:
- Continually reduce costs to achieve best-in-class performance
- Capture full benefits of integration with ExxonMobil's operations
- Focus on businesses that capitalize on our core competencies
- Build proprietary technology positions
- Selectively invest in internationally advantaged projects
| Statistical Recap |
1999 |
1998 |
1997 |
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| Earnings (millions of dollars) |
1,354 |
1,394 |
1,771 |
| Pime product sales(1) (thousands of metric tons) |
24,485 |
23,628 |
23,838 |
| Average capital employed (millions of dollars) |
12,462 |
10,816 |
10,234 |
| Return on average capital employed (percent) |
10.9 |
12.9 |
17.3 |
| Capital expenditures (millions of dollars) |
2,243 |
2,110 |
1,372 |
| (1) Prime product sales include ExxonMobil's share of equity company volumes and finished product transfers to the downstream. Carbon black oil and sulfur volumes are excluded.
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Industry Conditions
- Worldwide primary petrochemical demand grew by 5 percent during 1999. Growth was driven by strong economies in the developed nations of the world and the beginning of a recovery in Asia-Pacific.
- Commodity prices increased during 1999 in response to rising feedstock costs. However, margins continued at near bottom of cycle conditions for many of the company's high-volume commodity products.
- Restructuring of the petrochemical industry continues at an unprecedented level. Remaining firms are focusing on core businesses, building scale to extend global reach and improve competitiveness, while others are exiting petrochemicals completely.
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Worldwide Chemical Presence — ExxonMobil's chemical products are marketed in more than 120 countries around the world.
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1999 Highlights
ExxonMobil's chemical business earned $1.4 billion in 1999, the sixth consecutive year of earnings over $1 billion. Earnings were down 3 percent versus 1998 as the contribution from higher sales volumes and efficiency programs were offset by lower industry margins.
Prime product sales volume reached a record 24.5 million metric tons, up 4 percent versus 1998. Revenue of $15.9 billion increased 2 percent from 1998.
 The 1999 return on average capital employed (ROCE) was 11 percent. Despite the impact of significant growth investment, ExxonMobil's chemical return exceeded the average returns of our major oil company competitors in each of the past 10 years. Over the past five years, our chemical segment achieved an average ROCE of 18 percent.
Capital expenditures were $2.2 billion as the company progressed construction of major petrochemical complexes in Singapore and Saudi Arabia. Each of these investments brings unique competitive advantages and will position ExxonMobil to serve the growing Asia-Pacific markets.
Safety performance improved by 26 percent for employees and 40 percent for contractors. The company received top honors from the U. S. Chemical Manufacturers Association for sustained excellence in employee health and safety.
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