Overview The chemical industry comprises the companies that produce industrial chemicals.

Central to the modern world economy, it converts raw materials (oil, natural gas, air, water, metals, and minerals) into more than 70,000 different products. The chemical industry contributes significantly to the economic stability and development of a country. It provides key linkages in terms of products and technical solutions to several downstream industries like engineering, automotive, consumer durables, food processing, etc. The global chemicals industry is the largest manufacturing industry in the world, with sales of approximately USD 2.5 trillion in 2010. Growth potential of the chemicals sector is immense, considering the current low percapita consumption in the country. It is one of the fastest growing domestic sectors, comprising of both small and large scale enterprises, and is currently in a state of restructuring and consolidation. This movement aims to achieve product innovation, branch building, improved technical services and marketing abilities to stand through global competition. A recent report by global consultancy firm McKinsey suggests that around $350bn of the estimated $1tn world specialty chemical industry would move eastwards to Asia to meet manufacturing costs and downstream demand. Products Polymers and plastics, especially polyethylene, polypropylene, polyvinyl chloride, polyethylene terephthalate, polystyrene and polycarbonate comprise about 80% of the industrys output worldwide. Chemicals are used to make a wide variety of consumer goods, as well as thousands of inputs to agriculture, manufacturing, construction, and service industries. The chemical industry itself consumes 26 percent of its own output. Major industrial customers include rubber and plastic products, textiles, apparel, petroleum refining, pulp and paper, and primary metals. Chemicals are nearly a $3 trillion global enterprise, and the EU and U.S. chemical companies are the world's largest producers. Sales of the chemical business can be divided into a few broad categories, including basic chemicals, life sciences, specialty chemicals and consumer products. Basic chemicals Basic chemicals or "commodity chemicals" are a broad chemical category including polymers, bulk petrochemicals and intermediates, other derivatives and basic industrials, inorganic chemicals, and fertilizers. Polymers, the largest revenue segment, include all categories of plastics and man-made fibers. The major markets for plastics are packaging, followed by home construction, containers, appliances, pipe, transportation, toys, and games. The principal raw materials for polymers are bulk petrochemicals. Example: The largest-volume polymer product, polyethylene (PE), is used mainly in packaging films and other markets such as milk bottles, containers, and pipe.Polyvinyl chloride (PVC), another large-volume product, is principally used to make pipe for

construction markets as well as siding and, to a much smaller extent, transportation and packaging materials. The leading man-made fibers include polyester, nylon, polypropylene, and acrylics, with applications including apparel, home furnishings, and other industrial and consumer use. Chemicals in the bulk petrochemicals and intermediates are primarily made from liquefied petroleum gas (LPG), natural gas, and crude oil. Typical large-volume products include ethylene, propylene, benzene, toluene, xylenes, methanol, vinyl chloride monomer (VCM), styrene, butadiene, and ethylene oxide. These chemicals are the starting points for most polymers and other organic chemicals as well as much of the specialty chemicals category. Other derivatives and basic industrials include synthetic rubber, surfactants, dyes and pigments, turpentine, resins, carbon black, explosives, and rubber products. Inorganic chemicals make up the oldest of the chemical categories. Products include salt, chlorine, caustic soda, soda ash, acids (such as nitric acid, phosphoric acid, and sulfuric acid), titanium dioxide, and hydrogen peroxide. Fertilizers are the smallest category and include phosphates, ammonia, and potash chemicals. Life sciences Life sciences include differentiated chemical and biological substances, pharmaceuticals, diagnostics, animal health products, vitamins, and pesticides. While much smaller in volume than other chemical sectors, their products tend to have very high prices. Life science products are usually produced with very high specifications and are closely scrutinized by government agencies such as the Food and Drug Administration. Specialty chemicals Specialty chemicals are a category of relatively high valued, rapidly growing chemicals with diverse end product markets. They are generally characterized by their innovative aspects. Products are sold for what they can do rather than for what chemicals they contain. Products include electronic chemicals, industrial gases, adhesives and sealants as well as coatings, industrial and institutional cleaning chemicals, and catalysts. Consumer products Consumer products include direct product sale of chemicals such as soaps, detergents, and cosmetics. Because of the competitiveness within the chemical industry and among the chemicals, the chemical industry spends large amounts on research, particularly in the highly industrialized countries. The percentage of revenue spent on research varies from one branch to another; companies specializing in large-volume products that have been

widely used for many years spend less, whereas competition in the newer fields can be met only by intensive research efforts. Growing abroad In most industry sectors, growing domestically is seen as the best route to success this year. Not so for chemicals CEOs. Theyre actually slightly more optimistic about their companys chances in foreign markets, rather than on their own home turf. Thats probably why more of them say their company is using international experience and global mobility to prepare future leaders. New deal opportunities also rank higher than domestic growth on chemicals CEOs growth list. More chemicals CEOs say their companies completed a cross-border M&A over the past 12 months (30% vs. 19%). And the number jumps even higher when it comes to plans for the coming 12 months, with nearly two-fifths planning a transaction. JVs and strategic alliances are even more popular with chemicals CEOs. Relatively few, just 17%, expect cross-border deals to include North America though. With 40% of chemicals CEOs saying manufacturing capacity is a top three investment priority over the next 12 months, far more than across the sample as a whole, some of those deals may revolve around getting more capacity where its needed. Focusing on China One place where capacity expansions are certainly planned is China. 61% of chemicals CEOs with key operations there say building manufacturing capacity is one of their primary objectives this year more than double the number across the sample as a whole. Indeed, the chemicals sector stands out as the industry with arguably the strongest focus on China. More than half of chemicals CEOs say it will be a top market this year; thats twenty points higher than the overall average and higher than any other sector. Making innovation the #1 priority Chemicals CEOs have the strongest focus on innovation of any industry we surveyed. Three-fifths of them said R&D and innovation is one of their top three investment priorities over the next 12 months almost double the overall average, and significantly more than other innovation-driven sectors like pharmaceuticals & life sciences and technology. More than three-quarters of them also say theyll make changes to increase R&D and innovation capacity. A lot of whats driving innovation at chemicals companies is linked to customer needs. Innovation is one way that chemicals companies stay ahead of the competition. Many chemicals CEOs are keeping a close watch on what industry peers are doing. 61% say that industry competitors and peers have a significant influence on business strategy again, far more than the overall average of 45%. Developing more environmentally-friendly solutions Some of the sectors most powerful innovations are helping other sectors lower their carbon footprint. But chemicals production itself is also energy intensive, uses primarily

fossil fuels as a raw material, and requires other natural resources like water too. Many chemicals executives are keenly aware of the need to reduce the sectors overall environmental footprint. Two-thirds plan to increase their focus in the coming 12 months. And looking forward over the next three years, 38% also say theyll make bigger investments in addressing the risks of climate change and protecting biodiversity. In both areas theyre ahead of the overall average. Building robust global supply chains Supply chain disruptions are a potential headache for many chemicals CEOs. 42% worry that they could hamper growth. One way nearly two-thirds of chemicals CEOs are coping is by diversifying their supply chains and working with more partners across varied geographies. http://www.pwc.com/gx/en/chemicals/publications/index.jhtml http://www.eurofound.europa.eu/emcc/content/source/eu05022a.htm http://www.eurofound.europa.eu/emcc/content/source/eu05020a.htm?p1=sector... http://www.deloitte.com/assets/Dcom-Global/Local %20Assets/Documents/Manufacturing/dtt_Manufacturing_2013_Global_Chemical_indus try_MA_oulook_04042013.pdf http://webcache.googleusercontent.com/search? q=cache:DRRypz4l5SIJ:www.slideshare.net/akgicbm/spencers-retail-ltd-project-reportsummer-internshipproject+summer+internship+project+report&cd=2&hl=en&ct=clnk&gl=in