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Facts and Figures 2010

The European Chemical Industry in a worldwide perspective

Chemical Industry Profile ..................................................................................................................... 3


World chemicals sales: geographic breakdown .................................................................................. 3
World chemicals sales by region ......................................................................................................... 4
World exports and imports of chemicals by regional shares ............................................................... 5
EU chemical industry sales by geographic breakdown ....................................................................... 6
EU chemicals industry sales by sectoral breakdown .......................................................................... 7
EU chemicals industry sales: structure by destination ........................................................................ 8
EU chemical industry sales structure .................................................................................................. 9
Added value in EU chemicals and other manufacturing sectors ....................................................... 10
EU manufacturing industry: gross operating surplus / turnover ........................................................ 11
Contribution of the chemical industry to the EU economy ................................................................ 12
EU chemical industry: number of enterprises, sales and employment by size-class........................ 13
European chemical industry‟s public image ...................................................................................... 14

International Trade .............................................................................................................................. 15


Extra-EU chemicals trade balance .................................................................................................... 15
Extra-EU chemicals trade by region (exports & imports) .................................................................. 16
Extra-EU chemicals trade flows with major geographic blocs........................................................... 17
EU chemicals trade surplus: sectoral breakdown ............................................................................. 18
EU chemicals trade competitive analysis broken down by region .................................................... 19

Growth .................................................................................................................................................. 22
Production, trade and consumption growth ....................................................................................... 22
Chemicals growth performance against total manufacturing ............................................................ 23
EU chemicals production growth: latest trend and outlook ............................................................... 24
EU Chemical outlook ......................................................................................................................... 25
International comparison of production growth ................................................................................. 26
International comparison of production growth (continued) .............................................................. 27
Chemicals sales by country: top 30 ................................................................................................... 28

1
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

Costs .................................................................................................................................................... 29
Cost structure .................................................................................................................................... 29
Labour cost per employee ................................................................................................................. 30
Labour cost per employee and productivity....................................................................................... 31

Energy .................................................................................................................................................. 32
EU chemicals* industry energy consumption by source ................................................................... 32
Energy intensity* in the EU chemicals industry ................................................................................. 33
Energy intensity*: European Union versus United States ................................................................. 34

Employment ......................................................................................................................................... 35
Employment in the chemicals industry: EU versus the USA ............................................................. 35
Labour productivity ............................................................................................................................ 36
EU manufacturing industry: breakdown of investment per employee ............................................... 37
EU manufacturing industry: breakdown of labour cost per employee ............................................... 38
EU labour productivity: chemicals vs. total manufacturing ................................................................ 39
EU chemicals industry: percentage of workers by level of education ............................................... 40

Investment and R&D ........................................................................................................................... 41


Capital spending in the EU ................................................................................................................ 41
Capital spending by region ................................................................................................................ 42
R&D spending by region .................................................................................................................... 43
Total R&D spending .......................................................................................................................... 44

Sustainable Development .................................................................................................................. 45


Greenhouse gas emissions, energy consumption and production* .................................................. 45
Greenhouse gas emissions per unit of energy consumption and per unit of production* ................. 46
Greenhouse gas emissions per production*: EU versus US ............................................................. 47

2
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

Chemical Industry Profile

World chemicals sales: geographic breakdown

The European chemical industry can still be portrayed as vibrant and strong.
Worldwide competition is getting fiercer, however, as world chemicals sales in 2009
were valued at €1871 billion, a steep decline of 8.4 per cent compared with 2008 due
to the spill-over effects of the economic and financial crisis.

The €449 billion EU chemical industry is still in a strong position, but has lost its top
ranking in terms of sales to Asia, mainly due to the rise of China. Taken together, the
European Union, Asia and North American Free Trade Area, account for 89.7 per
cent of world turnover.

3
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

World chemicals sales by region

Developments during the previous 10 years from 1999 to 2009 indicate that the
European Union was the clear leader in terms of world chemicals sales, but the
region has gradually lost ground to Asia (excluding Japan). Comparing 2009 to 1999,
the EU contribution to world chemical sales declined by 8.1 percentage points. In
fact, the total value of sales in Europe has been growing continuously, but overall
world chemical sales are growing at an even faster clip. The value of world
chemicals sales increased by 60 per cent in 2009 compared with 1999.

4
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

World exports and imports of chemicals by regional shares

World exports of chemicals*, World imports of chemicals*,


2009 (share %) 2009 (share %)

*including intra EU trade Source: Cefic Chemdata International

In 2009, the key trading regions were the European Union, Asia –including China
and Japan – and the North American Free Trade Agreement. The European Union
was the leading exporter and importer of chemicals in the world, accounting for 42
per cent of global trade, defined as the total value of exports plus imports . This
includes intra-EU trade, mainly for reasons of comparison with other regions, as their
figures include this trade activity as well.

5
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

EU chemical industry sales by geographic breakdown

Germany remains the largest chemicals producer in Europe, followed by France,


Italy and the United Kingdom. Together, these four countries generate 60 per cent of
EU chemicals sales, valued at €269 billion in 2009. The share rises to 88 per cent,
valued at €395 billion, when including the Netherlands, Spain, Belgium and Ireland.
Sales levels in Poland represent the largest contribution from “new” EU countries
holding a 2.1 per cent share of total EU chemicals sales.

6
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

EU chemicals industry sales by sectoral breakdown

Source: Cefic Chemdata International

Output from the EU chemicals industry covers three wide ranges of products: base
chemicals, speciality chemicals, and consumer chemicals.

Base chemicals cover petrochemicals and derivatives and basic inorganics.


They are produced in large volumes, and are sold within the chemical industry
itself or to other industries. In 2002, they represented 58 per cent of total EU
chemicals sales, increasing in 2009 to 60 per cent.

Specialty chemicals cover the auxiliaries for industry, paints & inks, crop
protection, and dyes and pigments. Specialty chemicals are produced in small
volumes but nevertheless represented 26 per cent of total EU chemicals sales
in 2009.

Finally, consumer chemicals are sold to final consumers: soaps and


detergents, perfumes and cosmetics. Together, they represented 14 per cent
of total EU chemicals sales in 2009.

7
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

EU chemicals industry sales: structure by destination

EU chemicals sales are valued at €449 billion in 2009. Sales to EU partner countries
have more than doubled during the period from 1995 to 2009 (222 versus 98).

The European internal market during that 15-year period has had a profoundly
positive effect on the chemical industry. Removing both trade and non-trade barriers
inside the EU area has been a key driver for the growth and competitiveness of the
EU chemicals industry. The internal market, today numbering 500 million consumers,
is a key competitiveness factor. With the accession of ten new EU member states in
2004 and 2007, the internal market has received an intra-trade boost.

8
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

EU chemical industry sales structure

By 2009, intra-EU sales - excluding domestic sales – accounted for nearly half of
total chemical sales by the sector in the European Union. While intra-EU sales are
rising, the importance of domestic sales is decreasing, however, only accounting for
25 per cent of EU sales. Twenty-six per cent of chemicals sales are exported outside
of the EU market. The NAFTA trade bloc, EU neighbour countries and Asia are the
key markets.

9
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

Added value in EU chemicals and other manufacturing sectors

Chemicals form the second leading manufacturing sector, after pharmaceuticals, in


terms of value-added per employee in Europe, according to the latest data for the
2006 time period. Behind the two leading groups are basic metals; and radio,
television and communication; automotives; and office machinery and computers.
The chemical industry‟s value added per employee is 84 per cent higher than the
combined average of all manufacturing sectors.

10
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

EU manufacturing industry: gross operating surplus / turnover

With regard to its gross operating profit, chemicals compares favourably to other
manufacturing sectors as well. The ratio of gross operating profits to sales is the 8 th
highest in industry and is well above the manufacturing average.

11
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

Contribution of the chemical industry to the EU economy

The chemical industry's contribution to the EU gross domestic product amounts to


1.1 per cent. This may seem small at first sight, but should be re-assessed taking
into consideration both the shrinking contribution of industry as a whole to GDP in
advanced economies (23.7 per cent in 1995 versus 17.6 per cent in 2009 in the EU)
along with a rise in services. Additionally, there is a wide contribution of chemical
products into all branches of the economy; for example in Germany chemicals are
the most important supplier of innovative materials for the industry. Chemicals
represent 10 per cent of the supply of input and intermediary products and they show
an above average R&D content.

12
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

EU chemical industry: number of enterprises, sales and employment by size-


class

The EU chemical industry comprises 29 000 enterprises (data covering firms with no
employees are excluded), 96 per cent of which have less than 250 employees and
are considered as small and medium sized enterprises. These account for 28 per
cent of sales and 35 per cent of employment. Only 4 per cent of the EU enterprises
employ more than 249 employees, generating 72 per cent of total chemicals sales.

13
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

European chemical industry’s public image

In a Cefic-led pan-European survey released in 2010 on public perceptions of the EU


chemical industry, survey respondents ranked the chemicals sector sixth out of eight
benchmark industries in terms of having a favourable image and ranked it below the
overall average for all sectors. The image of the chemical industry in 2010 is still at
the same level as in 2008.

14
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

International Trade

Extra-EU chemicals trade balance

As a historically important player in the global chemicals market, the EU chemical


industry has been in a position to benefit from trade opportunities. In 2009, the EU
generated an extra-EU trade surplus of €42.6 billion, which represents about €3.4
billion more compared with 2008. As a consequence of the economic crisis, extra-EU
chemical exports – those exports sent outside of the EU internal market – declined in
2009 by 10.2 per cent. Imports to non-EU area, fell by 18.4 per cent.

15
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

Extra-EU chemicals trade by region (exports & imports)

Extra-EU chemicals trade flow, calculated as total exports plus imports, was mainly
attributable in 2009 to the North American Free Trade Agreement market (NAFTA),
with 27.5 per cent of total flow. Asia, excluding Japan, was 27.2 per cent while the
share of trade flow of other European countries was 25.6 per cent during the same
period.

Taken together, the NAFTA, Asia and „Rest of Europe‟ markets contributed in 2009
to 80.3 per cent of extra-EU chemicals trade. Comparing 2009 with 1999, the
contribution of the three main partners of the European Union increased by 13.5
percentage points from 66.8 per cent to 80.3 per cent.

16
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

Extra-EU chemicals trade flows with major geographic blocs

EU chemicals trade flows in euro billion (2009)

20.4 19.5 Rest of


NAFTA Europe
32.2 29.5

22.5
Asia*
29.5
3.1
LAC**
7.0 5.1
5.3
Japan

2.4
Africa
8.0 1.4 Rest of
5.5 the World

* excl. Japan; **Latin America and the Caribbean


Source: Cefic Chemdata International

The three major geographic blocs trading with the European Union in 2009 were:
North America, Asia (excluding Japan), and the Rest of Europe.

The European Union has a surplus with each main trading region – NAFTA, Asia,
Japan, Latin America, Africa, Rest of Europe and Africa and has broadly retained its
market share in global chemicals sales during the last decade. The Rest of Europe
market plays a major role in 2009, with €10 billion in net trade surplus in chemicals
for the European Union.

The Trade Competitiveness Indicator (TCI) –an indicator that compares the trade
balance to the total trade, namely exports plus imports of a region– reveals a
deteriorating competitiveness, however, of the overall EU chemicals industry since
2003. This means that total chemical imports are growing faster than total chemical
exports.

17
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

EU chemicals trade surplus: sectoral breakdown

The EU chemicals trade surplus in 2009 amounted to €42.6 billion. Consumer


chemicals accounted for 32 per cent of the EU chemicals trade surplus with a trade
surplus of €13.5, billion. Specialty chemicals are the second strongest sector on the
world markets, with €13.4 billion, followed by petrochemicals at €9.1 billion and
polymers at €7.6 billion. Basic inorganics experienced a trade deficit of €1 billion,
the only sector during 2009 with a trade deficit.

The sectoral analysis shows specialty chemicals and consumer chemicals continue
to lose ground. The trade surplus in these sectors decreased by (7.5 per cent) and
(6.2 per cent) respectively in 2009 compared to 2008. However, petrochemicals and
polymers in 2009 registered an increase in their trade surplus of 38 per cent and 31
per cent respectively.

18
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

EU chemicals trade competitive analysis broken down by region

South Middle Rest of


USA Japan Brazil Russia India China Korea East Asia Asia

Basic Inorganics

Petrochemicals

Polymers

Specialty Chemicals

Consumer Chemicals

Chemicals (sum)

EU has a trade deficit and its competitive position weakened

EU has a trade surplus but its positive competitive position weakened

EU has a trade deficit but its weak competitive position improved


EU has a trade surplus and its healthy competitive position improved

Source: Cefic Chemdata International; (2000-2004) vs. (2005-2009)

A look at the EU trade balance in relation to a number of key countries and regions
shows that its position is deteriorating with certain key countries in Asia for almost all
sub-sectors. India and China are the only two countries with which the European
Union currently has a trade deficit for all chemical sub-sectors.

Continued trade development with the Middle East indicates that this region
increasingly uses its feedstock availability, namely petroleum, to develop an
integrated chemicals value chain and to strengthen its position in a wider range of
basic chemicals. Russia has up to now only been successful in using its competitive
advantage in raw materials for base chemicals.

19
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

The trade position of certain important sub-sectors, in particular the raw material and
energy-intensive parts of the chemicals industry, namely basic organics such as
petrochemicals, and basic inorganics such as fertilizers, shows signs of serious
erosion. Their global competitive position is at risk.

20
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

International trade is vital for growth and employment of the European chemicals
industry. The industry has placed itself at the centre of global trade and thus
depends vitally on open markets. As the most rapid growth is concentrated in the
emerging economies, favourable access to these markets is highly important.

21
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

Growth
Production, trade and consumption growth

During the period from 2004 to 2009, chemicals sales and consumption registered a
small decline. Chemicals sales declined slightly slower than consumption (-0.2%
versus -0.4%). Import growth during the same five-year period experienced a trend
rate of 2.5 per cent, slightly exceeding the 2.2 per cent trend rate of export growth.

22
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

Chemicals growth performance against total manufacturing

In the 10-year period from 1999 to 2009, the chemical industry had an average
growth rate of 0.4 per cent, a rate slightly higher than the 0.3 per cent average
growth rate for total manufacturing. Both averages were extremely low as compared
to the long-term averages. These low growth rates were the consequence of
dramatic declines in chemical production levels during the 2009 economic downturn
as compared with pre-crisis level.

In addition to providing for current customers needs, the chemical industry is


constantly developing new and improved products and processes, thus creating and
serving completely new markets. This enables other industries to be more efficient
and productive by using more effective substitute materials and products. Chemicals
serve as input into essentially all sectors of the economy, and consequently depend
on their economic performance.

23
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

EU chemicals production growth: latest trend and outlook

The EU chemicals industry was profoundly affected by the spill-over effects of the
economic and financial crisis. The magnitude of the economic crisis- which started
during the second half of 2008- was much more severe than expected. Many
companies were certainly not expecting such a dramatic downturn. Data that covers
activity through 2009 indicate that chemical companies are experiencing strong
pressure on margins due in particular to the lack of demand from customers and
weak consumer spending. Moreover, the European chemicals industry is facing
additional pressure from competitors outside of Europe, mainly from the Middle East
where new petrochemical capacity is now built-up and very likely a large proportion
of its output will find its way into European markets.

All in all, the European chemicals industry reached its lowest point in December
2008; production since that time has dragged along, posting at best mild growth
each month but remains sharply down compared to figures in 2008. Output in the EU
chemicals industry experienced a decline of 11.4 per cent in 2009 compared to
2008.

24
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

EU Chemical outlook

Looking ahead: Cefic forecasts a year-on-year production growth of 9.5 per cent for
2010 and 2 per cent in 2011 (Source, Economic Outlook, June 2010).

Basic chemicals sectors are now registering the fastest rebounds, but in all cases
chemicals output remains well below pre-2008 levels. Growth in chemicals
production has continued more strongly and for longer than was expected at the time
of our November 2009 forecast. The overall economic recovery in Europe, however,
remains fragile. Consequently, Cefic still expects a pause in the rate of growth of
most commodity chemicals sectors, since underlying market demand must firm up. A
recovery built on inventory corrections alone is not sustainable.

Surveys also indicate that capacity utilisation within the industry remains well below
normal levels. As there remain significant uncertainties in the economic and financial
environment, any defaults on sovereign debt could trigger renewed problems for
banks who would suffer from non performing loan books. The chemicals sector
would be sensitive to further economic shocks resulting from such a scenario.

The development of the EU chemicals industry will also depend on the effectiveness
of consolidation measures taken within individual EU countries. The European
chemicals industry continues to face relentless global competition. Access to raw
materials and energy at globally competitive prices remains a prerequisite for a
successful recovery.

25
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

International comparison of production growth

During the period from 2004 to 2009, the EU chemical industry showed the lowest
growth rate compared with the biggest regions in the world. The EU chemical sector
declined by 1.5 per cent, well below the world chemical industry average growth rate
of 3.6 per cent. The Asia-Pacific region is booming, with average growth rates in
chemicals of 10.8 per cent during the past five years. Asia is heavily influenced by
the extraordinary performance of the Chinese chemicals sector and a booming
economy and industrial sector.

26
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

International comparison of production growth (continued)

The long-term trend for chemicals production shows that during the years 1999 to
2009, the European chemical industry showed the lowest growth, a meagre rate of
only 0.1 per cent. The Asia-Pacific region registered a 9.7 per cent growth rate and
Latin America posted a 3.6 per cent one, both relatively strong trend rates that began
several years ago.

27
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

Chemicals sales by country: top 30

In 2009, the 30 largest chemical-producing countries had a combined sales turnover


of €1685 billion. Twelve of the top 30 major countries are Asian, generating
chemicals sales of €753 billion. This figure represents nearly 45 per cent of the top
30 and 40 per cent of the share of world chemical production. Nine of the top 30 are
members of the European Union, now numbering 27 member states, and
representing 22 per cent of world chemicals sales.

Number of
Sales (euro billin) 2009 sales share (top 30) world share
countries

EU 404 9 24.0% 22%


Rest of Europe 39 2 2.3% 2%
NAFTA 396 3 23.5% 21%
Latin America 79 3 4.7% 4%
Asia 753 12 44.7% 40%
Others 14 1 0.8% 1%
Top 30 1685 30 100% 90%

28
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

Costs

Cost structure

In 2006, purchases by the EU chemical industry accounted for 76.3 per cent of the
sales value, covering both trading and other purchases costs. Trading represents the
cost of chemicals purchased from third parties and resold in their original condition,
and amounts to 6.7 per cent of the sales value. The other purchases costs
accounted for some 69.6 per cent of the chemicals sales value, which cover partially
energy costs.

It needs to be noted that energy costs from the purchase of feedstock, fuel and
power represent a key factor in cost competitiveness within the EU chemicals
industry. Certain sub-sectors are much more sensitive to energy cost as for them it
represents a more important input factor – for example the chlor alkali industry.

The remaining 23.7 per cent constitutes the payroll (12.5 per cent) and the gross
operating surplus (11.2 per cent). The gross operating surplus is defined as profits
before taxes, financial charges and depreciation.

29
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

Labour cost per employee

Payroll accounts for 12.5 per cent of chemicals production costs, a significant share
and thus a major factor in competitiveness. Labour cost per employee in the EU
chemical industry has increased by an average 3.3 per cent per annum from1999 to
2009. The chemical industry has a highly trained and well educated workforce, which
redistributes part of its economic profits to employees via high-wage, competitive
salaries.

30
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

Labour cost per employee and productivity

Productivity rates in the EU chemical industry during the period 1999 to 2009
increased at a significant trend rate of 2.2 per cent. The productivity rate is rising 1.1
per cent slower than the labour cost per employee. The modestly rising labour
productivity trend during the past 10 years has been considerably affected by the
economic and financial crisis which started in 2008. The conditions in 2009 were
dramatic for the EU chemicals industry as production declined by 11.4 per cent
compared with 2008. Taking out 2009 performance levels, the analysis shows that
labour productivity and labour cost per employee are increasing at a relatively similar
rate of 3.3 per cent.

31
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

Energy

EU chemicals* industry energy consumption by source

The chemical industry transforms energy and raw materials into products required by
other industrial sectors as well as by final consumers. The cost of these two inputs is
a prime factor in competitiveness on world markets.

Energy sector consumption includes coal, oil products, natural gas, electricity and
renewables, using them as raw materials – known as feedstock – and as power and
fuel. In 2008, the European chemical industry, including pharmaceuticals, used a
total of 138.7 million tonnes of oil equivalent (TOE) of energy. Feedstock accounted
for 60 per cent of total energy products and fuel and power for nearly 40 per cent,
taking all sources of energy into account. This means that most of the energy used
by the chemical industry as feedstock is stored in products and can still be reused
via recycling.

Regarding other raw materials, the chemical industry also uses a wide variety of
natural and processed starting materials, including metals, minerals and agricultural
raw materials such as sugar, starch and fats.

32
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

Energy intensity* in the EU chemicals industry

For many years, the EU chemical industry, including pharmaceuticals, has made
strenuous efforts to improve energy efficiency, reducing its fuel and power energy
consumption per unit of production. In 2008, energy intensity, or the energy
consumption per unit of production in the chemical industry, including
pharmaceuticals, was 41 per cent lower than in 1995.

33
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

Energy intensity*: European Union versus United States

Energy efficiency is subject to decreasing returns: the higher the level of energy
efficiency attained, the more difficult it becomes to make further improvements.
However, over the previous 14 years from 1995 to 2008, the chemical industry has
succeeded in increasing continuously its output and at the same time keeping its
energy input constant, and consequently lowered its energy intensity significantly by
4 per cent per year on average.

The Chart below shows that energy intensity in the US chemicals industry has
declined over the same period (1995-2008) but not as much as in Europe where
energy intensity slowed by 3.4 per cent per year on average.

34
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

Employment

Employment in the chemicals industry: EU versus the USA

In the EU, some 29,000 chemical companies employ a total staff of about 1.205
million. Employment in the EU chemical industry has decreased by 2 per cent during
the past 10 years from 1999 to 2009. Employment in the United States has
experienced a steeper decline for chemicals over the same period, declining 3.3 per
cent.

35
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

Labour productivity

The EU chemical industry is a leading industry with high skills and productivity,
notably due to high investment per employee and highly educated and trained
employees. As a consequence, labour productivity in the EU chemical industry rose
at an average annual rate of 2.2 per cent during the 10 years from 1999 to 2009.

36
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

EU manufacturing industry: breakdown of investment per employee

Investment per employee and personnel cost are two important factors for the
international competitiveness of the European chemical industry. Workplace
equipment in the chemical industry is of top quality and investment per employee is
double the manufacturing average. What is interesting to note is that the chemical
sector in Europe is first in terms of investment per employee among all
manufacturing sectors.

37
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

EU manufacturing industry: breakdown of labour cost per employee

The labour force employed in the chemical industry is more qualified, trained and
better paid than the average industrial worker. Personnel costs for the EU chemical
industry are 47 per cent higher than the average of other manufacturing sectors.
After pharmaceuticals, the chemical industry is the second leading sector in terms of
labour cost per employee, followed by the automotive and “other transparent
equipment” sectors.

38
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

EU labour productivity: chemicals vs. total manufacturing

Due to intensifying global competition, the EU chemical industry has taken vigorous
restructuring and cost-saving steps in order to improve its competitiveness over the
last decade. As a consequence, labour productivity in the chemical industry has
been growing at an average annual growth from 1999 to 2009 of 2.2 per cent, faster
than the 1.6 per cent labour productivity rate in the total manufacturing sector for the
same ten-year period.

39
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

EU chemicals industry: percentage of workers by level of education

Employees with medium and high education account for around 80 per cent of
workers in the chemical industry, based on data 2005. While the percentage of
people with lower and medium education has been decreasing since 2001, workers
with a high level of education are gaining importance, accounting for almost 27 per
cent in 2005.

This figure is important because the success of the European chemical industry
depends on its well trained employees. Skills and education are an important factor
in international competitiveness and the European chemical industry is facing a
global challenge for talent.

40
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

Investment and R&D

Capital spending in the EU

Investments in innovation, including research & development (R&D) are key


elements in securing the future of the chemical industry. They not only promote the
adaptation to and the development of new technologies and innovation, but are
necessary prerequisites for the continuous adjustment of corporate structures to the
needs of the marketplace. It is worth noting that the currently available figures on
R&D investments give only part of the picture as it is only the starting point on the
path to successful innovation. Innovation spending in companies is increasingly
included under business development.

After some choppy movements in previous years, the ratio of capital spending to
sales of the chemical industry, including pharmaceuticals, in the European Union has
been declining since 1999 rather steadily. In absolute figures, investment had been
growing at a consistent pace between 1995 and 2000 and then declined almost
continuously till 2004, with a slight recovery in the following three years from 2005 to
2007.

41
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

Capital spending by region

*including pharmaceuticals, **estimated data for Japan Source: Cefic Chemdata International

The ratio of capital spending to sales in the chemical industry, including


pharmaceuticals, in the European Union has been declining since 1999. A similar
trend has occurred in both Japan and NAFTA (North American Free Trade Area).
From 1995 to 2006, Japan has registered the highest ratio at 4.9 per cent, followed
by NAFTA (at 4.8 per cent) and the European Union, which posted a 4.7 per cent
ratio.

42
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

R&D spending by region

**estimated for EU13 Source: Cefic Chemdata International

The high value-added products of the chemical industry continuously open up new
fields of application and pave the way to progress and innovation in other industries.
Typical examples are health, food, consumer goods, aerospace and car
manufacturing, telecommunications, electrical engineering and electronics. Wide
variations in research and development (R&D) efforts are observed across the
chemical industry. Turning R&D into innovation is becoming increasingly important in
relation to the competitiveness of the region.

Analysing the ratio of R&D spending to sales of the chemical industry it can be
observed that during the 16-year time period from 1991 to 2007, the United States
had, on average, a slightly higher ratio of 2.3 per cent than the EU ratio of 2.1 per
cent. But these two respective ratios have decreased to similar levels in recent
years. The same ratio in Japan is 5.2 per cent, around twice as high as the US and
EU trading regions.

43
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

Total R&D spending

EU chemicals account for 8 per cent of total EU manufacturing spending in research


and development (R&D)(data 2003). If the R&D spending of the pharmaceutical
sector is included, chemicals are the top investor in R&D in European manufacturing,
accounting for almost one-fourth of total R&D investment of manufacturing.

44
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

Sustainable Development
Greenhouse gas emissions, energy consumption and production*

Between 1990 and 2008, production in the EU chemical industry, including


pharmaceuticals, rose by 69 per cent, while total energy consumption was rather
stable and greenhouse gas (GHG) emissions fell by 42 per cent.

The chemical industry works to develop cleaner and safer technologies,


waste-recycling processes and new products to safeguard the environment include
biotechnology processes, catalysts, membranes and desulphurisation. One aspect is
increased energy efficiency. Besides increasing the energy efficiency of its own
processes, the chemical industry also helps to increase the energy efficiency of
downstream users and their products through innovative inputs.

45
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

Greenhouse gas emissions per unit of energy consumption and per unit of
production*

Greenhouse gas (GHG) emissions per unit of energy consumption have been
reduced by 41.5 per cent and GHG emissions per unit of production, or GHG
intensity, by 65.5 per cent since 1990. This shows the enormous effort by the
chemical industry to minimise the environmental impact of its production.

46
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27
Facts and Figures 2010
The European Chemical Industry in a worldwide perspective

Greenhouse gas emissions per production*: EU versus US

In comparison to the US chemical industry, the EU chemical sector has reduced its
greenhouse gas (GHG) emission intensity, calculated as emissions per unit of
production, by a relatively greater amount and is more GHG emission-efficient. The
US chemical industry has decreased its emission intensity by 35.3 per cent since
1990, whereas the European Union chemical industry has cut its GHG emissions by
65.5 per cent.

47
Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri (mha@cefic.be)
Unless specified, EU refers to EU 27