Executive Summary

The chemicals market is an international industry with a UK market value of £32.8bn in 1996. The market has grown by 28.3% in value terms since 1991, fuelled by ongoing product innovation and revival of demand in customer industries.

The market has seen a number of trends in recent years. Bulk chemical production has shifted globally towards low-cost producing areas. Within more developed economies, there has been a shift on the part of larger companies to the processing of more value-added products, an area previously served by smaller businesses. Outsourcing, whereby third-party companies undertake all, or part, of the processing activity, has also become more prevalent.

Despite significant, progress as perceived by the industry itself, the majority of consumers still regard the chemical companies with a level of distrust regardeing environmental factors. However, indicators evidence better performance in recent years on environmental and safety issues, as well as the implementation of more stringent national and European legislation.

Demand for chemical products has increased as recession lifts and companies are implementing investment decisions. The move towards more highly-specified chemicals, which carry a price premium, together with research and development-inspired (R&D) new product development (NPD), will ensure ongoing growth in the sector.

The chemical indstry has traditionally achieved growth ahead of overall manufacturing. The emergence of the economy from recession brings with it increased economic activity and demand from customer induustries.

Key Note forecasts that sales in the chemical industry will increase by 16.3% between 1997 and the year 2001, from £33.76bn to £39.26bn.

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