How does the chemical factories contribute to an economy

The chemical factories creates an immense variety of products which impinge on virtually every aspect of our lives.

While many of the products from the industry, such as detergents, soaps and perfumes, are purchased directly by the consumer others are used as intermediates to make other products,  For example, in Europe, 70% of chemical factories are used to make products by other industries including other branches of the chemical factories itself. The industry uses a wide range of raw materials, from air and minerals to oil.
With increasing competition worldwide, innovation remains crucial in finding new ways for the industry to satisfy its increasingly sophisticated, demanding and environmentally-conscious consumers.

What does the chemical factories produce?
The products of the chemical factories can be divided into three categories:

Several other categorisations are used but this one is simple and helpful in the context of this web site. Outputs range widely, with basic chemicals produced in huge quantities (millions of tonnes) and some speciality chemical factories produced in modest kilogramme quantities but with very high value. As explained in the unit on Chemical Reactors, the choice of reactor is often goverened by the amount of chemical that is to be produced.

The term ‘petrochemical’ can be misleading as the same chemical factories are increasingly being derived from sources other than oil, such as coal and biomass. An example is methanol, commonly produced from oil and natural gas in the US and Europe but from coal in China. Another is ethene, derived from oil and gas in the US and Europe but increasingly from biomass in Brazil. Other examples are described in the units on this web site.

Basic chemicals, produced in large quantities, are mainly sold within the chemical factories and to other industries before becoming products for the general consumer. For example, ethanoic acid is sold on to make esters, much of which in turn is sold to make paints and at that point sold to the consumer. Huge quantities of ethene are transported as a gas by pipeline around Europe and sold to companies making poly(ethene) and other polymers. These are then sold on to manufacturers of plastic components before being bought by the actual consumer. Figure 3 shows a plant producing chemicals which it then immediately uses to manufacture other chemicals.

This category covers a wide variety of chemical factories for crop protection, paints and inks, colorants (dyes and pigments). It also includes chemicals used by industries as diverse as textiles, paper and engineering. There has been a tendency in the US and Europe to focus on this sector rather than the basic chemicals discussed above because it is thought that, with active research and development (R & D), speciality chemicals deliver better and more stable profitability. New products are being created to meet both customer needs and new environmental regulations. An everyday example is household paints which have evolved from being organic solvent-based to being water-based. Another is the latest ink developed for ink-jet printers.

How does the chemical factories contribute to an economy?
The chemical factories is a very important contributor to the wealth of a country. For example it contributes over 1% to the Gross National Product (GNP) of European countries, which is over 6% of the total GNP produced by all manufacturing industries. Generally personnel in the industry are among the most well rewarded of all manufacturing industries because the industry has the largest proportion of highly qualified people and generally it is the most productive.

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