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The chemical industry comprises the companies that produce industrial chemicals. Central to the modern world economy, it converts raw materials (oil, natural gas, air, water, metals, and minerals) into more than 70,000 different products.
- 1 Products
- 2 Companies
- 3 Continents and Countries
- 4 Technology
- 5 Chemical Manufacturing Locations
- 6 History
- 7 Companies in the 21st century
- 8 See also
- 9 References
Polymers and plastics, especially polyethylene, polypropylene, polyvinyl chloride, polyethylene terephthalate, polystyrene and polycarbonate comprise about 80% of the industry’s output worldwide. Chemicals are used to make a wide variety of consumer goods, as well as thousands of inputs to agriculture, manufacturing, construction, and service industries. The chemical industry itself consumes 26 percent of its own output. Major industrial customers include rubber and plastic products, textiles, apparel, petroleum refining, pulp and paper, and primary metals. Chemicals are nearly a $3 trillion global enterprise, and the EU and U.S. chemical companies are the world's largest producers.
Sales of the chemical business can be divided into a few broad categories, including basic chemicals (about 35 to 37 percent of the dollar output), life sciences (30 percent), specialty chemicals (20 to 25 percent) and consumer products (about 10 percent).
Basic chemicals & Commodity Chemicals to Polymers and Speciality Chemicals
Basic chemicals, or "commodity chemicals" are a broad chemical category including polymers, bulk petrochemicals and intermediates, other derivatives and basic industrials, inorganic chemicals, and fertilizers. Typical growth rates for basic chemicals are about 0.5 to 0.7 times GDP. Product prices are generally less than fifty cents per pound.
Polymers, the largest revenue segment at about 33 percent of the basic chemicals dollar value, includes all categories of plastics and man-made fibers. The major markets for plastics are packaging, followed by home construction, containers, appliances, pipe, transportation, toys, and games.
- The largest-volume polymer product, polyethylene (PE), is used mainly in packaging films and other markets such as milk bottles, containers, and pipe.
- Polyvinyl chloride (PVC), another large-volume product, is principally used to make pipe for construction markets as well as siding and, to a much smaller extent, transportation and packaging materials.
- Polypropylene (PP), similar in volume to PVC, is used in markets ranging from packaging, appliances, and containers to clothing and carpeting.
- Polystyrene (PS), another large-volume plastic, is used principally for appliances and packaging as well as toys and recreation.
- The leading man-made fibers include polyester, nylon, polypropylene, and acrylics, with applications including apparel, home furnishings, and other industrial and consumer use.
The principal raw materials for polymers are bulk petrochemicals.
Chemicals in the bulk petrochemicals and intermediates are primarily made from liquefied petroleum gas (LPG), natural gas, and crude oil. Their sales volume is close to 30 percent of overall basic chemicals. Typical large-volume products include ethylene, propylene, benzene, toluene, xylenes, methanol, vinyl chloride monomer (VCM), styrene, butadiene, and ethylene oxide. These basic or commodity chemicals are the starting materials used to manufacture many polymers and other more complex organic chemicals particularly those that are made for use in the specialty chemicals category (see below).
Other derivatives and basic industrials include synthetic rubber, surfactants, dyes and pigments, turpentine, resins, carbon black, explosives, and rubber products and contribute about 20 percent of the basic chemicals' external sales.
Inorganic chemicals (about 12 percent of the revenue output) make up the oldest of the chemical categories. Products include salt, chlorine, caustic soda, soda ash, acids (such as nitric acid, phosphoric acid, and sulfuric acid), titanium dioxide, and hydrogen peroxide.
Life sciences (about 30 percent of the dollar output of the chemistry business) include differentiated chemical and biological substances, pharmaceuticals, diagnostics, animal health products, vitamins, and pesticides. While much smaller in volume than other chemical sectors, their products tend to have very high prices—over ten dollars per pound—growth rates of 1.5 to 6 times GDP, and research and development spending at 15 to 25 percent of sales. Life science products are usually produced with very high specifications and are closely scrutinized by government agencies such as the Food and Drug Administration. Pesticides, also called "crop protection chemicals", are about 10 percent of this category and include herbicides, insecticides, and fungicides.
Specialty chemicals are a category of relatively high valued, rapidly growing chemicals with diverse end product markets. Typical growth rates are one to three times GDP with prices over a dollar per pound. They are generally characterized by their innovative aspects. Products are sold for what they can do rather than for what chemicals they contain. Products include electronic chemicals, industrial gases, adhesives and sealants as well as coatings, industrial and institutional cleaning chemicals, and catalysts. In 2012, excluding fine chemicals, the $546 billion global speciality chemical market was 33% Paints, Coating and Surface Treatments, 27% Advanced Polymer, 14% Adhesives and Sealants, 13% additives and 13% pigmnets and inks.
Consumers rarely if ever come into contact with basic chemicals but polymers and speciality chemicals are the materials that they will encounter everywhere in their every-day lives, such as in plastics, cleaning materials, cosmetics, paints & coatings, electronic gadgets, automobiles and the materials used to construct their homes. These speciality products are marketed by chemical companies to the downstream manufacturing industries as pesticides, speciality polymers, electronic chemicals, surfactants, construction chemicals, Industrial Cleaners, flavours and fragrances, speciality coatings, printing inks, water soluble polymers, food additives, paper chemicals, oil field chemicals, plastic adhesives, adhesives and sealants, cosmetic chemicals, water management chemicals, catalysts, textile chemicals. Chemical companies rarely supply these products directly to the consumer.
Every year, the American Chemistry Council tabulates the U.S. production volume of the top 100 basic chemicals. In 2000, the aggregate production volume of the top 100 chemicals totalled 502 million tons, up from 397 million tons in 1990. Inorganic chemicals tend to be the largest volume, though much smaller in dollar revenue terms due to their low prices. The top 11 of the 100 chemicals in 2000 were sulfuric acid (44 million tons), nitrogen (34), ethylene (28), oxygen (27), lime (22), ammonia (17), propylene (16), polyethylene (15), chlorine (13), phosphoric acid (13) and diammonium phosphates (12).
The largest corporate producers worldwide, each with plants in numerous countries, include BASF, Bayer, Ferro, Solvay, Braskem, Celanese/Ticona, Arkema, Degussa, Dow, DuPont, Eastman Chemical Company, ExxonMobil, Givaudan, INEOS, LyondellBasell, Mitsubishi, Monsanto, PPG Industries, SABIC, Shell, and Wanhua along with thousands of smaller firms.
Continents and Countries
In the U.S. there are 170 major chemical companies. They operate internationally with more than 2,800 facilities outside the U.S. and 1,700 foreign subsidiaries or affiliates operating. The U.S. chemical output is $750 billion a year. The U.S. industry records large trade surpluses and employs more than a million people in the United States alone. The chemical industry is also the second largest consumer of energy in manufacturing and spends over $5 billion annually on pollution abatement.
In Europe the chemical, plastics and rubber sectors are among the largest industrial sectors. Together they generate about 3.2 million jobs in more than 60,000 companies. Since 2000 the chemical sector alone has represented 2/3 of the entire manufacturing trade surplus of the EU.
in 2012 The chemical sector accounted for 12% of the EU manufacturing industry's added value. Europe remains world’s biggest chemical trading region with 43 % of the world’s exports and 37%of the world’s imports, although the latest data shows that Asia is catching up with 34% of the exports and 37% of imports. Even so Europe still has a trading surplus with all regions of the world except Japan and China where in 2011 there was a chemical trade balance. Europe’s trade surplus with the rest of the world today amounts to 41.7 billion Euros.
Over the 20 years between 1991 and 2011 the European Chemical industry saw its sales increase 295 billion Euros to 539 billion Euros a picture of constant growth. Despite this the European industry’s share of the world chemical market has fallen from 36% to 20%. This has resulted from the huge increase production and sales in the emerging markets like India and China.. The data suggest that 95% of this impact is from China alone. In 2012 the data from the European Chemical Industry Council (CEFIC)shows that 5 European countries account for 71% of the EU's chemicals sales. These are Germany, France, United Kingdom, Italy and the Netherlands..
The chemical industry has shown rapid growth for more than fifty years. The fastest-growing areas have involved the manufacture of synthetic organic polymers used as plastics, fibres and elastomers. Historically and presently the chemical industry has been concentrated in three areas of the world, Western Europe, North America and Japan (the Triad). The European Community remains the largest producer area followed by the USA and Japan.
The traditional dominance of chemical production by the Triad countries is being challenged by changes in feedstock availability and price, labour cost, energy cost, differential rates of economic growth and environmental pressures. Instrumental in the changing structure of the global chemical industry has been the growth in China, India, Korea, the Middle East, South East Asia, Nigeria, and Brazil.
From the perspective of chemical engineers, the chemical industry involves the use of chemical processes such as chemical reactions and refining methods to produce a wide variety of solid, liquid, and gaseous materials. Most of these products serve to manufacture other items, although a smaller number go directly to consumers. Solvents, pesticides, lye, washing soda, and portland cement provide a few examples of product used by consumers.
The industry includes manufacturers of inorganic- and organic-industrial chemicals, ceramic products, petrochemicals, agrochemicals, polymers and rubber (elastomers), oleochemicals (oils, fats, and waxes), explosives, fragrances and flavors. Examples of these products are shown in the Table below.
|inorganic industrial||ammonia, chlorine, sodium hydroxide, sulfuric acid, nitric acid|
|organic industrial||acrylonitrile, phenol, ethylene oxide, urea|
|ceramic products||silica brick, frit|
|petrochemicals||ethylene, propylene, benzene, styrene|
|agrochemicals||fertilizers, insecticides, herbicides|
|polymers||polyethylene, Bakelite, polyester|
|elastomers||polyisoprene, neoprene, polyurethane|
|oleochemicals||lard, soybean oil, stearic acid|
|explosives||nitroglycerin, ammonium nitrate, nitrocellulose|
|fragrances and flavors||benzyl benzoate, coumarin, vanillin|
|industrial gases||nitrogen, oxygen, acetylene, nitrous oxide|
Although the pharmaceutical industry is often considered[who?] a chemical industry , it has many different characteristics that puts it in a separate category. Other closely related industries include petroleum, glass, paint, ink, sealant, adhesive, and food processing manufacturers.
Chemical processes such as chemical reactions operate in chemical plants to form new substances in various types of reaction vessels. In many cases the reactions take place in special corrosion-resistant equipment at elevated temperatures and pressures with the use of catalysts. The products of these reactions are separated using a variety of techniques including distillation especially fractional distillation, precipitation, crystallization, adsorption, filtration, sublimation, and drying.
The processes and product or products are usually tested during and after manufacture by dedicated instruments and on-site quality control laboratories to ensure safe operation and to assure that the product will meet required specifications. The products are packaged and delivered by many methods, including pipelines, tank-cars, and tank-trucks (for both solids and liquids), cylinders, drums, bottles, and boxes. Chemical companies often have a research-and-development laboratory for developing and testing products and processes. These facilities may include pilot plants, and such research facilities may be located at a site separate from the production plant(s).
Chemical Manufacturing Locations
The scale of chemical manufacturing tends to decline from largest=Petrochemicals and commodity chemicals, then specialty chemicals and smallest=fine chemicals. The commodity and petrochemical manufacturing units are on the whole single product continuous processing plants. Specialty Chemical and Fine Chemical manufacturing are mostly made in discrete batch processes.
Those chemicals made on the largest of scales are made in a few manufacturing locations around the world, for example in Louisiana in the USA, on Teesside in the Northeast of England in the UK and in Rotterdam in Holland. Not all of the petrochemical or commodity chemical materials that are produced by the chemical industry are made in one single location but groups of related materials often are to induce industrial symbiosis as well as material, energy and utility efficiency and other economies of scale. Speciallity and Fine Chemical Companies are often found in similar locations but in many cases they are to be found in multi sector business parks.
The large scale manufacturing locations often have clusters of manufacturing units that share utilities and large scale infrastructure such as power stations, port facilities, road and rail terminals. In the United Kingdom for example there are 4 main locations for commodity chemical manufacture: near the River Mersey in Northwest England, on the Humber on the East coast of Yorkshire, in Grangemouth near the Firth of Forth in Scotland and on Teesside as part of the Northeast of England Process Industry Cluster (NEPIC). To demonstrate the clustering and integration, mentioned above, some 50% of the UK's petrochemical and commodity chemicals, are produced by the NEPIC industry cluster companies on Teesside.
Chandler (2005) argues the relative success or failure of American and European chemical companies is explained with reference to three themes: "barriers to entry," "strategic boundaries," and "limits to growth." He says successful chemical firms followed definite "paths of learning" whereby first movers and close followers created entry barriers to would-be rivals by building "integrated learning bases" (or organizational capabilities) which enabled them to develop, produce, distribute, and sell in local and then worldwide markets. Also they followed a "virtuous strategy" of reinvestment of retained earnings and growth through diversification, particularly to utilize "dynamic" scale and scope economies relating to new learning in launching "next generation" products.
Companies in the 21st century
The chemical industry includes large, medium, and small companies located worldwide. Companies with sales of chemical products greater than $10 billion in fiscal year 2007 appear listed below. For some of these companies the chemical sales might represent only a portion of their total sales; (for example ExxonMobil's chemical sales covered only 8.7 percent of their total sales in 2005).
|COMPANY, HEADQUARTERS||2007 Chemical Sales, billions||Rank||Country|
|BASF SE, Ludwigshafen, Germany||$65.3||1|
|Dow Chemical, Midland, Michigan, United States||$53.5||2|
|INEOS, Lyndhurst, UK||$43.6||3|
|LyondellBasell, Houston, Texas, United States||$42.8||4|
|Formosa Plastics, Taiwan||$31.9||5|
|DuPont, Wilmington, Delaware, United States||$28.5||6|
|Saudi Basic Industries Corporation, Riyadh, Saudi Arabia||$26.4||7|
|Bayer, AG, Leverkusen, Germany||$24.2||8|
|Mitsubishi Chemical, Tokyo, Japan||$22.2||9|
|Akzo Nobel/Imperial Chemical Industries(ICI), Amsterdam/London||$19.9||10|
|Air Liquide, Paris, France||$16.3||11|
|Sumitomo Chemical, Tokyo, Japan||$15.2||12|
|Evonik Industries, AG, Essen, Germany||$15.0||13|
|Mitsui Chemicals, Tokyo, Japan||$14.3||14|
|Asahi Kasei, Tokyo, Japan||$13.8||15|
|Toray Industries, Tokyo, Japan||$13.1||16|
|Chevron Phillips, The Woodlands, Texas, United States||$12.5||17|
|DSM NV, Heerlen, Netherlands||$12.1||18|
|PPG Industries, Pittsburgh, Pennsylvania, United States||$11.2||19|
|Shin-Etsu Chemical Co., Ltd., Tokyo, Japan||$11.1||20|
Just as companies emerge as the main producers of the chemical industry, we can also look on a more global scale to how industrialized countries rank, with regards to the billions of dollars worth of production a country or region could export. Though the business of chemistry is worldwide in scope, the bulk of the world’s $3.7 trillion chemical output is accounted for by only a handful of industrialized nations. The United States alone produced $689 billion, 18.6 percent of the total world chemical output in 2008.
|Global Chemical Shipments by Country/Region (billions of dollars)||1998||1999||2000||2001||2002||2003||2004||2005||2006||2008||2009|
|United States of America||416.7||420.3||449.2||438.4||462.5||487.7||540.9||610.9||657.7||664.1||689.3|
|Africa & Middle East||52.7||53.2||59.2||57.4||60.4||73.0||86.4||99.3||109.6||124.2||160.4|
|Asia-Pacific excluding Japan||215.2||241.9||276.1||271.5||300.5||369.1||463.9||567.5||668.8||795.5||993.2|
|Total world shipments||1573.5||1625.5||1719.0||1670.9||1748.8||2008.5||2325.6||2596.4||2858.1||3160.7||3696.8|
- Chemical engineering
- Chemical Leasing
- Pharmaceutical industry
- Industrial gas
- Prices of elements and their compounds
- Responsible Care
- fine chemicals
- speciality chemicals
- commodity chemicals
- Northeast of England Process Industry Cluster(NEPIC)
- "Sectors of Chemical Industry". Technofunc. Retrieved 16 September 2013.
- Global Specialty Chemicals (Report). =Marketline. May 2012. http://2012e.igem.org/wiki/images/f/fb/Global_Specialty_Chemicals_Profile.pdf. Retrieved 16 September 2012.
- Global Speciality Chemicals (Report). MarketLine. May 2012. http://2012e.igem.org/wiki/images/f/fb/Global_Specialty_Chemicals_Profile.pdf.
- Facts and Figures 2012:The European chemicals industry in a worldwide perspective. CEFIC. Retrieved 5 August 2013.
- Higgins, Stan (April 2013). "European Chemicals Industry:A review". Chemical News. pp. 18–20.
- Facts and Figures 2012:The European chemicals industry in a worldwide perspective. CEFIC. p. 6. Retrieved 5 August 2013.
- Facts and Figures 2012:The European chemicals industry in a worldwide perspective. CEFIC. p. 7. Retrieved 5 August 2013.
- "INEOS_Gassmaks09_Trondheim_Final". Retrieved 2009-06-06.
- Fred Aftalion A History of the International Chemical Industry. University of Pennsylvania Press. 1991. online version
- E. N. Brandt. Growth Company: Dow Chemical's First Century. Michigan State University Press. xxii+ 650 pp. Appendices, Select bibliography and index. ISBN 0-87013-426-4. online review
- Alfred D. Chandler. Shaping the Industrial Century: The Remarkable Story of the Evolution of the Modern Chemical and Pharmaceutical Industries. Harvard University Press, 2005. 366 pp. ISBN 0-674-01720-X. chapters 3-6 deal with DuPont, Dow Chemicals, Monsanto, American Cyanamid, Union Carbide, and Allied in USA; and European chemical producers, Bayer, Farben, and ICI.
- Micheal McCoy, et al., "Facts & Figures of the Chemical Industry", Chemical & Engineering News, 84(28), July 10, 2006, pp. 35–72.
- Shreve, R. Norris, and Joseph A. Brink Jr. The Chemical Process Industries (4th ed. New York: McGraw Hill, 1977)
- Woytinsky, W. S., and E. S. Woytinsky. World Population and Production Trends and Outlooks (1953) pp 1176–1205; with many tables and maps on the worldwide chemical industry in 1950