The UK chemical industry

In the UK, chemicals provides direct employment for 214,000 and supports several hundred thousand additional jobs throughout the economy. It has a relatively higher proportion employed in medium size enterprises when compared to other European countries.

On average, full-time employee hourly earnings are 19% higher than in manufacturing generally. This reflects high skill, productivity and training levels.

Chemicals importers ... chemicals from asia.

Between them, India and China account for 40% of the world’s population: a report by Morgan Stanley indicates that these countries have been growing twice as fast as the rest of the world over the past two decades. There is no doubt that they are a force to be reckoned with.

India’s population of one billion people offers an enormous labour force, but cheap labour isn’t the only factor pushing this country to the forefront of the global economy. The key is the phenomenal availability of skilled, English-speaking labour: India produces 3m graduates every year, as well as 700 000 post-graduates and 1500 PhDs. India also has the highest availability of qualified engineers in the world, the third highest availability of skilled labour, and are ranked as the second most entrepreneurial culture in the world.

It has been said that the 19th century belonged to Britain; the 20th belonged to America, and that the 21st will belong to Asia. When the revolution happens it is essential that you are not left behind.

The Indian chemicals industry started developing after the country's independence in 1947. The industry has since become a major contributor to the economic and industrial development of the country. The industry is characterised by fragmentation, with the top-10 players contributing only 38% of sales and 45% of profit.

Growing at the rate of more than 10% annually, the Indian Chemical Industry ranks 12th in the world and accounts for 13% of total exports from India. Accounting for 2% of global output, it is currently valued at about INR1.5bn with expectations that it reaches more than INR4bn by the year 2010.

Company Developments in India

Essar Chemicals, part of the Essar Group, and French chemical company Arkema announced the signing of an MoU to study the feasibility of a 50:50 joint venture in India for the production and commercialisation of acrylic acid and esters. Sherwin-Williams Co., the largest US paint retailer, agreed to buy Nitco Paints for an undisclosed consideration to enter the Indian market.

Nitco Paints is a privately owned manufacturer and distributor based in Mumbai with sales of about US$18mn. Gujarat Alkalies and Chemicals Ltd (GACL) and the second largest global chemical giant, Dow Chemicals, have decided to combine efforts in the state and are in the process of giving this agreement a shape for long-lasting co-operation. The two companies would set up a 50:50 joint venture for a proposed chemical plant at Dahej in Gujarat or enter into a product sharing and marketing agreement.

Projects And Expansions

The Gujarat Government announced that it was likely to divest this year its entire 40% holding in State-owned Gujarat Alkalies and Chemicals Ltd (GACL). Among the potential suitors reported to be interested in buying the State Government's 40 per cent holding in GACL were the Reliance Group's Indian Petrochemicals Corporation (IPCL), the Aditya Birla group and Tata Chemicals.

Tata Chemicals Ltd, the country's largest soda ash and edible salt maker, announced that it planned to broaden its business canvas by entering into the manufacture of bio-fuels and distribution of fresh fruits and vegetables. The company planned to set up its first bio-ethanol plant in Maharashtra at a cost of INR400-500mn with a capacity of 30 kilolitres per day.

Industry Outlook

The plastics industry is increasing at a rate of 14% per annum, and consumption is expected to be more than 12mn tonnes per annum (tpa) by 2010. Further, according to India's Union Minister for chemicals, fertiliser and steel, the demand for fertiliser is forecast to rise to 35.9mn tonnes by 2010. As such, the government plans to restart eight public sector fertiliser plants in the next two years