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Chemical Industry

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Adapted from 3rd edition, Encyclopaedia of Occupational Health and Safety.

The business of the chemical industry is to change the chemical structure of natural materials in order to derive products of value to other industries or in daily life. Chemicals are produced from these raw materials-principally minerals, metals and hydrocarbons-in a series of processing steps. Further treatment, such as mixing and blending, is often required to convert them into end-products (e.g., paints, adhesives, medicines and cosmetics). Thus the chemical industry covers a much wider field than what is usually called “chemicals” since it also includes such products as artificial fibres, resins, soaps, paints, photographic films and more.

Chemicals fall into two main classes: organic and inorganic. Organic chemicals have a basic structure of carbon atoms, combined with hydrogen and other elements. Oil and gas are today the source of 90% of world organic chemical production, having largely replaced coal and vegetable and animal matter, the earlier raw materials. Inorganic chemicals are derived chiefly from mineral sources. Examples are sulphur, which is mined as such or extracted from ores, and chlorine, which is made from common salt.

The products of the chemical industry can be broadly divided into three groups, which correspond to the principal steps in manufacture: base chemicals (organic and inorganic) are normally manufactured on a large scale and are normally converted to other chemicals; intermediates are derived from base chemicals. Most intermediates require further processing in the chemical industry, but some, such as solvents, are used as they are; finished chemical products are made by further chemical processing. Some of these (drugs, cosmetics, soaps) are consumed as such; others, such as fibres, plastics, dyes and pigments, are processed still further.

The main sectors of the chemical industry are as follows:

  1. basic inorganics: acids, alkalis and salts, mainly used elsewhere in industry and industrial gases, such as oxygen, nitrogen and acetylene
  2. basic organics: feedstocks for plastics, resins, synthetic rubbers, and synthetic fibres; solvents and detergent raw materials; dyestuffs and pigments
  3. fertilizers and pesticides (including herbicides, fungicides and insecticides)
  4. plastics, resins, synthetic rubbers, cellulosic and synthetic fibres
  5. pharmaceuticals (drugs and medicines)
  6. paints, varnishes and lacquers
  7. soaps, detergents, cleaning preparations, perfumes, cosmetics and other toiletries
  8. miscellaneous chemicals, such as polishes, explosives, adhesives, inks, photographic film and chemicals


In the International Standard Industrial Classification of All Economic Activities (ISIC) system, used by the United Nations to classify economic activity into ten major divisions, the chemical industry is classified as Division 35, one of the nine subdivisions of Major Division 3: Manufacturing. Division 35 is further subdivided into industrial chemicals (351), other chemicals (352), petroleum refineries (353), miscellaneous coal and petroleum products, e.g., asphalt (354), rubber products including tyres (355) and plastics processing (356).

In reporting chemical industry statistics each country normally uses its own classification system, and this can be misleading. Thus comparison between countries of total chemical industry performance cannot be based on national sources. However, international bodies like the Organization for Economic Cooperation and Development (OECD) and the United Nations normally supply data on the ISIC basis, though with a delay of about two years.

Trade statistics are published internationally under the Standard International Trade Classification (SITC), which differs from the ISIC system. Trade statistics by individual countries nearly always refer to SITC section 5, which covers about 90% of total chemicals reported in the ISIC system.

The chemical industry has grown much more rapidly in the half century than industry as a whole. Although there was an economic depression in the world’s chemical industry in the early 1990s, chemical production increased in the mid-1990s. The biggest area of growth of chemical production has been in Southeast Asia. Figure 1 shows the percentage change in chemical production for 1992-95 for selected countries.

Figure 1.Change in chemical production for selected countries, 1992-95


Much of the chemical industry is highly capital-intensive and is also strongly dependent on research and development (e.g., pharmaceuticals). The combined result of these two factors is that the industry employs an abnormally low number of unskilled manual workers for its size, in comparison with manufacturing industry in general. Total employment in the industry rose slightly during the period of rapid growth prior to 1970, but since then the drive for increased productivity has resulted in a decline in employment in the chemical industry in most developed countries. Table 1 shows chemical industry employment in the United States and several European countries for 1995.

Table 1. Chemical industry employment in selected countries (1995)



United States

1, 045,000





United Kingdom








Source: Chemical and Engineering News 1996.



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