Chemical industry Totally Explained

Everything about The Chemical Industry totally explained

The chemical industry comprises the companies that produce industrial chemicals. It is central to modern world economy, converting raw materials (oil, natural gas, air, water, metals, minerals) into more than 70,000 different products.

Products

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 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 is nearly a $2 trillion global enterprise, and the EU and U.S. chemical companies are the world's largest producers.

Companies

The largest corporate producers worldwide, with plants in numerous countries, are BASF, Dow, Shell, Bayer, INEOS, ExxonMobil, DuPont, SABIC, and Mitsubishi, along with thousands of smaller firms.
   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 $400 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, especially Germany, 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. The chemical sector accounts for 12% of the EU manufacturing industry's added value.
   The chemical industry has shown rapid growth for more than fifty years. The fastest growing areas have been in 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, Trinidad, Thailand, Brazil, Venezuela, and Indonesia.

Technology

As accepted by 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 are used in manufacture of other items, although a smaller number are used directly by consumers. Solvents, pesticides, lye, washing soda, and portland cement are 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.

Product Type	xamples
inorganic industrial	ammonia, nitrogen, sodium hydroxide, sulfuric acid, nitric acid
organic industrial	acrylonitrile, phenol, ethylene oxide, urea
ceramic products	silica brick, frit
petrochemicals	benzene, ethylene, 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

Although the pharmaceutical industry is often considered 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 are used in chemical plants to form new substances in various types of reaction vessels. In many cases the reactions are conducted 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 are usually tested during and after manufacture by dedicated instruments and on-site quality control laboratories to insure 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).

History

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 21st century

The chemical industry includes large, medium, and small companies that are located worldwide. Companies with sales of chemical products greater than $10 billion dollars in fiscal year 2005 are shown below. For some of these companies the chemical sales represented only a portion of their total sales; for example ExxonMobil’s chemical sales were only 8.7 percent of their total sales.

COMPANY, HEADQUARTERS	005 Chemical Sales, billions	ank
BASF, AG, Ludwigshafen, Germany	$53.2	1
Dow Chemical, Midland, Mich.	$46.3	2
Shell Chemicals, Netherlands/UK	$35	3
Bayer, AG, Leverkusen, Germany	$34.1	4
INEOS, Lyndhurst, UK	$33	5
ExxonMobil, Irving, Texas	$31.2	6
DuPont, Wilmington, Delaware	$28.5	7
Mitsubishi Chemical, Tokyo, Japan	$21.9	8
Lyondell Chemical, Houston, Texas	$18.6	9
Saudi Basic Industries Corporation, Riyadh, Saudi Arabia	$18.4	10
Akzo Nobel, Arnhem, Netherlands	$16.2	11
Degussa, AG, Düsseldorf, Germany	$14.6	12
Sumitomo Chemical, Tokyo, Japan	$14.1	13
Asahi Kasei, Tokyo, Japan	$13.6	14
Mitsui Chemicals, Tokyo, Japan	$13.4	15
Air Liquide, Paris, France	$13.0	16
Toray Industries, Tokyo, Japan	$13.0	17
Huntsman Corp., Salt Lake City, Utah	$13.0	18
Chevron Phillips, The Woodlands, Texas	$10.7	19
Solvay SA, Brussels, Belgium	$10.7	20
Imperial Chemical Industries(ICI), London, UK	$10.6	21
Shin-Etsu Chemical Co., Ltd., Tokyo, Japan	$10.2	22
DSM NV, Heerlen, Netherlands	$10.2	23

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