Industry Analysis & Industry Trends
The past five years have been volatile for the Petrochenical Manufacturing industry, as revenue has been sensitive to changes in prices of its key inputs, crude oil and natural gas. With oil and gas prices collapsing in 2014, vertically integrated major players were forced to pass on reduced prices down the supply chain. As a result, industry revenue fell over the five years to 2017. Over the five years to 2022, industry revenue is expected to recover as commodity prices eventually rise. Vertically integrated companies will be able to take advantage of their economies of scale and further expand production.
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Industry Report - Starting a New Business Chapter
Barriers to entry into the Petrochemical Manufacturing industry are high, and are expected to remain that way. This industry faces a number of barriers to entry, a major one being the level of capital required. The costs to construct a plant can range anywhere from a couple hundred million to billions of dollars. For example, Dow Chemical Co. is in the works of securing permits to construct a $1.7 billion plant in Freeport, TX.
Aside from the costs of building a plant, regulatory costs are high as well. Because the industry deals with chemical waste and emissions, companies are subject to rules set by the Environmental Protection Agency. With regulation increasing, these costs are expected to remain high as well, for example, in 2015 Exxon Mobil spent $5.6 bi.. purchase to read more