BETWEEN 1995 AND 2001,annual revenues for the U.S.commodity chemicals industry fell from 20 billion to 12 billion,while companies'operating profits fell on average by 26% a year.The collapse was in large measure caused by a tight economic environment and a rising dollar.But outside forces were only part of the story-industry players also made some very poor decisions.Managers were only too eager to invest excess cash in new capacity,fearing that competitors'growth would outpace their own.As the new capacity came online,it exacerbated the pressures on prices and profitability.
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