If you’re looking for a one-word answer for how big the chemical manufacturing industry is, that word is: very. But to go into a little more detail…
What Is The Chemical Manufacturing Industry?
The global chemical manufacturing industry includes any company which produces industrial chemicals. Manufacturing around 70,000 different products, it’s an intrinsic part of the global economy. It’s also a growing industry and outperforms the overall market, especially with the burgeoning number of chemical manufacturers in emerging markets such as China, Brazil, and India. It is estimated that world sales of chemicals is more than $3,500 billion. However, some think that the 10-year outlook may not reflect the industry’s growth over the last 10 years.
A Short History Of The Chemical Manufacturing Industry
It’s always important to look backwards as that’s where we can find trends and successes, failures and learnings. But before we get too philosophical, let’s dive into a brief history of the chemical manufacturing industry so we can truly see its growth over time.
Chemicals in some form or another have been made for thousands of years, but only relatively recently on have they been manufactured on an industrial scale. It all started during the 19th century, around the time of the Industrial Revolution. The demand for chemicals in large volumes (one of the first being sulphuric acid), drove supply and the formation of chemical suppliers.
Chemical industries took shape at the beginning of the 20th century in the UK with ICI, Germany with IG Farben (now BASF, currently the world’s largest chemical company), France, and the US. Fast-forward to the present day and the chemical industry is taking advantage of progress in technology, with millions spent on research and development to gain competitive advantage.
What Products Are Manufactured By The Chemical Industry?
Broadly speaking, chemical industry sales can be divided into:
- Basic chemicals: This type of chemical manufacturing includes petrochemicals, industrials, inorganic chemicals such as ethylene and propylene, and polymers. Overall, polymers and plastics generate approximately 80% of the industry’s output worldwide. The industries using these chemicals include plastics, construction, transportation, and toys.
- Life sciences: Life sciences include chemical and biological substances, pharmaceuticals, pesticides, and vitamins. While smaller quantities of these types of chemicals are produced than the other categories, they are usually more expensive and have more R&D investment.
- Specialty chemicals: Bespoke chemical manufacturing (like we do at ReAgent) is more specialised – products are created, made and sold for what they do rather than for what they are. These products can range between anything from industrial gases, adhesives, and coatings to cleaning chemicals, catalysts, and additives.
- Consumer products: We rarely come into contact with raw chemicals in our daily lives, but a lot of products we use contain chemicals. These types of products include soaps, household cleaning products, perfumes, ink, food additives, and cosmetics.
The Global Chemical Manufacturing Industry
The latest figures from Chemical & Engineering News show that sales of chemicals from the top fifty global chemical manufacturing companies in 18 different countries were more than US$851,000,000,000, a 14.3% increase over the previous year.
- United States: The US chemical manufacturing industry sells more than $750 billion of chemicals per year, employing more than a million people in the US, with facilities worldwide.
- Europe: The chemical, plastics and rubber manufacturing industries in Europe provide around 3.2 million jobs in over 60,000 companies, mainly based in the UK, Germany, France, Italy, and the Netherlands. Europe is the world’s biggest chemical trading region with 43% of the world’s exports and 37% of the its imports, although Asia is quickly catching up.
- Asia: Chemical production in Asia is rapidly increasing, with China growing its global share by 22% in just 10 years. Share figures have therefore decreased in Europe and the US, even though sales have continued to grow – this is because of the size of the chemical industry.