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  • 8/8/2019 Facts and Figures Full Report 20.09.2010 Rev2

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    Facts and Figures 2010The European Chemical Industry in a worldwide perspective

    Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri ([email protected])Unless specified, EU refers to EU 27

    1

    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 ....................................................... 10EU 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 industrys 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........................................................... 17EU 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 ................................................................................. 26International comparison of production growth (continued) .............................................................. 27

    Chemicals sales by country: top 30 ................................................................................................... 28

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    Facts and Figures 2010The European Chemical Industry in a worldwide perspective

    Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri ([email protected])Unless specified, EU refers to EU 27

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    Costs .................................................................................................................................................... 29

    Cost structure .................................................................................................................................... 29

    Labour cost per employee ................................................................................................................. 30Labour 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 ............................................................. 35Labour 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 ................................................................................................................ 42R&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

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    Facts and Figures 2010The European Chemical Industry in a worldwide perspective

    Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri ([email protected])Unless specified, EU refers to EU 27

    3

    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 2009were valued at 1871 billion, a steep decline of 8.4 per cent compared with 2008 dueto the spill-over effects of the economic and financial crisis.

    The 449 billion EU chemical industry is still in a strong posi tion, but has lost its topranking in terms of sales to Asia, mainly due to the rise of China. Taken together, theEuropean Union, Asia and North American Free Trade Area, account for 89.7 per

    cent of world turnover.

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    Facts and Figures 2010The European Chemical Industry in a worldwide perspective

    Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri ([email protected])Unless specified, EU refers to EU 27

    4

    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 theregion 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. Infact, the total value of sales in Europe has been growing continuously, but overallworld chemical sales are growing at an even faster clip. The value of worldchemicals sales increased by 60 per cent in 2009 compared with 1999.

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    Facts and Figures 2010The European Chemical Industry in a worldwide perspective

    Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri ([email protected])Unless specified, EU refers to EU 27

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    World exports and imports of chemicals by regional shares

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

    Source: Cefic Chemdata International

    World exports of chemicals*,2009 (share %)

    World imports of chemicals*,2009 (share %)

    *including intra EU trade

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    Facts and Figures 2010The European Chemical Industry in a worldwide perspective

    Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri ([email protected])Unless specified, EU refers to EU 27

    6

    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 ofEU 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 countriesholding a 2.1 per cent share of total EU chemicals sales.

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    Facts and Figures 2010The European Chemical Industry in a worldwide perspective

    Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri ([email protected])Unless specified, EU refers to EU 27

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    EU chemicals industry sales by sectoral breakdown

    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 industryitself or to other industries. In 2002, they represented 58 per cent of total EUchemicals sales, increasing in 2009 to 60 per cent.

    Specialty chemicals cover the auxiliaries for industry, paints & inks, cropprotection, and dyes and pigments. Specialty chemicals are produced in smallvolumes but nevertheless represented 26 per cent of total EU chemicals salesin 2009.

    Finally, consumer chemicals are sold to final consumers: soaps anddetergents, perfumes and cosmetics. Together, they represented 14 per centof total EU chemicals sales in 2009.

    Source: Cefic Chemdata International

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    Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri ([email protected])Unless specified, EU refers to EU 27

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    EU chemicals industry sales: structure by destination

    EU chemicals sales are valued at 449 billion in 2009. Sales to EU partner countrieshave 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 profoundlypositive effect on the chemical industry. Removing both trade and non-trade barriersinside the EU area has been a key driver for the growth and competitiveness of theEU chemicals industry. The internal market, today numbering 500 million consumers,is a key competitiveness factor. With the accession of ten new EU member states in2004 and 2007, the internal market has received an intra-trade boost.

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    EU chemical industry sales structure

    By 2009, intra-EU sales - excluding domestic sales accounted for nearly half oftotal chemical sales by the sector in the European Union. While intra-EU sales arerising, the importance of domestic sales is decreasing, however, only accounting for25 per cent of EU sales. Twenty-six per cent of chemicals sales are exported outsideof the EU market. The NAFTA trade bloc, EU neighbour countries and Asia are thekey markets.

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    Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri ([email protected])Unless specified, EU refers to EU 27

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    Added value in EU chemicals and other manufacturing sectors

    Chemicals form the second leading manufacturing sector, after pharmaceuticals, interms of value-added per employee in Europe, according to the latest data for the2006 time period. Behind the two leading groups are basic metals; and radio,television and communication; automotives; and office machinery and computers.The chemical industrys value added per employee is 84 per cent higher than thecombined average of all manufacturing sectors.

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    Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri ([email protected])Unless specified, EU refers to EU 27

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    EU manufacturing industry: gross operating surplus / turnover

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

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    Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri ([email protected])Unless specified, EU refers to EU 27

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    Contribution of the chemical industry to the EU economy

    The chemical industry's contribution to the EU gross domestic product amounts to1.1 per cent. This may seem small at first sight, but should be re-assessed takinginto consideration both the shrinking contribution of industry as a whole to GDP inadvanced 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 arethe most important supplier of innovative materials for the industry. Chemicalsrepresent 10 per cent of the supply of input and intermediary products and they showan above average R&D content.

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    Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri ([email protected])Unless specified, EU refers to EU 27

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

    The EU chemical industry comprises 29 000 enterprises (data covering firms with noemployees are excluded), 96 per cent of which have less than 250 employees andare considered as small and medium sized enterprises. These account for 28 percent of sales and 35 per cent of employment. Only 4 per cent of the EU enterprisesemploy more than 249 employees, generating 72 per cent of total chemicals sales.

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    Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri ([email protected])Unless specified, EU refers to EU 27

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    European chemical industrys public image

    In a Cefic-led pan-European survey released in 2010 on public perceptions of the EUchemical industry, survey respondents ranked the chemicals sector sixth out of eightbenchmark industries in terms of having a favourable image and ranked it below theoverall average for all sectors. The image of the chemical industry in 2010 is still atthe same level as in 2008.

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    Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri ([email protected])Unless specified, EU refers to EU 27

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    International Trade

    Extra-EU chemicals trade balance

    As a historically important player in the global chemicals market, the EU chemicalindustry has been in a position to benefit from trade opportunities. In 2009, the EUgenerated an extra-EU trade surplus of 42.6 billion, which represents about 3.4billion more compared with 2008. As a consequence of the economic crisis, extra-EUchemical exports those exports sent outside of the EU internal market declined in2009 by 10.2 per cent. Imports to non-EU area, fell by 18.4 per cent.

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    Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri ([email protected])Unless specified, EU refers to EU 27

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

    Extra-EU chemicals trade flow, calculated as total exports plus imports, was mainlyattributable 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 theshare of trade flow of other European countries was 25.6 per cent during the sameperiod.

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

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    Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri ([email protected])Unless specified, EU refers to EU 27

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    Extra-EU chemicals trade flows with major geographic blocs

    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 itsmarket share in global chemicals sales during the last decade. The Rest of Europemarket plays a major role in 2009, with 10 billion in net trade surplus in chemicalsfor the European Union.

    The Trade Competitiveness Indicator (TCI) an indicator that compares the tradebalance to the total trade, namely exports plus imports of a region reveals adeteriorating competitiveness, however, of the overall EU chemicals industry since2003. This means that total chemical imports are growing faster than total chemicalexports.

    NAFTA20.4

    32.2

    LAC**3.1

    7.0

    Africa2.4

    8.0 Rest of

    the World

    1.4

    5.5

    Rest ofEurope

    29.5

    19.5

    Asia*29.5

    22.5

    Japan5.3

    5.1

    Source: Cefic Chemdata International* excl. Japan; **Latin America and the Caribbean

    EU chemicals trade flows in euro billion (2009)

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    Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri ([email protected])Unless specified, EU refers to EU 27

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    EU chemicals trade surplus: sectoral breakdown

    The EU chemicals trade surplus in 2009 amounted to 42.6 billion. Consumerchemicals accounted for 32 per cent of the EU chemicals trade surplus with a tradesurplus of 13.5, billion. Specialty chemicals are the second strongest sector on theworld markets, with 13.4 billion, followed by petrochemicals at 9.1 billion andpolymers 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 andpolymers in 2009 registered an increase in their trade surplus of 38 per cent and 31per cent respectively.

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    Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri ([email protected])Unless specified, EU refers to EU 27

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    EU chemicals trade competitive analysis broken down by region

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

    Continued trade development with the Middle East indicates that this regionincreasingly uses its feedstock availability, namely petroleum, to develop anintegrated chemicals value chain and to strengthen its position in a wider range ofbasic chemicals. Russia has up to now only been successful in using its competitive

    advantage in raw materials for base chemicals.

    EU has a trade surplus but its positive competitive position weakened

    EU has a trade surplus and its healthy competitive position improved

    EU has a trade deficit and its competitive position weakened

    EU has a trade deficit but its weak competitive position improved

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

    USA Japan Brazil Russia India China

    South

    Korea

    Middle

    East Asia

    Rest of

    Asia

    Basic Inorganics

    Petrochemicals

    Polymers

    Specialty Chemicals

    Consumer Chemicals

    Chemicals (sum)

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

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

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    Growth

    Production, trade and consumption growth

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

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    Unless specified, chemicals industry excludes pharmaceuticals Dr. Moncef Hadhri ([email protected])Unless specified, EU refers to EU 27

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    Chemicals growth performance against total manufacturing

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

    In addition to providing for current customers needs, the chemical industry isconstantly developing new and improved products and processes, thus creating andserving completely new markets. This enables other industries to be more efficient

    and productive by using more effective substitute materials and products. Chemicalsserve as input into essentially all sectors of the economy, and consequently dependon their economic performance.

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    EU chemicals production growth: latest trend and outlook

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

    All in all, the European chemicals industry reached its lowest point in December2008; production since that time has dragged along, posting at best mild growtheach month but remains sharply down compared to figures in 2008. Output in the EUchemicals industry experienced a decline of 11.4 per cent in 2009 compared to2008.

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    International comparison of production growth

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

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    International comparison of production growth (continued)

    The long-term trend for chemicals production shows that during the years 1999 to2009, the European chemical industry showed the lowest growth, a meagre rate ofonly 0.1 per cent. The Asia-Pacific region registered a 9.7 per cent growth rate andLatin America posted a 3.6 per cent one, both relatively strong trend rates that beganseveral years ago.

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    Chemicals sales by country: top 30

    In 2009, the 30 largest chemical-producing countries had a combined sales turnoverof 1685 billion. Twelve of the top 30 major countries are Asian, generatingchemicals sales of 753 billion. This figure represents nearly 45 per cent of the top30 and 40 per cent of the share of world chemical production. Nine of the top 30 aremembers of the European Union, now numbering 27 member states, andrepresenting 22 per cent of world chemicals sales.

    Sales (euro billin) 2009 salesNumber of

    countriesshare (top 30) world share

    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%

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    Costs

    Cost structure

    In 2006, purchases by the EU chemical industry accounted for 76.3 per cent of thesales value, covering both trading and other purchases costs. Trading represents thecost 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 costsaccounted for some 69.6 per cent of the chemicals sales value, which cover partiallyenergy costs.

    It needs to be noted that energy costs from the purchase of feedstock, fuel andpower represent a key factor in cost competitiveness within the EU chemicalsindustry. Certain sub-sectors are much more sensitive to energy cost as for them itrepresents 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 grossoperating surplus (11.2 per cent). The gross operating surplus is defined as profitsbefore taxes, financial charges and depreciation.

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    Labour cost per employee

    Payroll accounts for 12.5 per cent of chemicals production costs, a significant shareand 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 to2009. The chemical industry has a highly trained and well educated workforce, whichredistributes part of its economic profits to employees via high-wage, competitivesalaries.

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    Labour cost per employee and productivity

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

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    Energy

    EU chemicals* industry energy consumption by source

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

    Energy sector consumption includes coal, oil products, natural gas, electricity andrenewables, using them as raw materials known as feedstock and as power andfuel. In 2008, the European chemical industry, including pharmaceuticals, used atotal of 138.7 million tonnes of oil equivalent (TOE) of energy. Feedstock accountedfor 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 usedby the chemical industry as feedstock is stored in products and can still be reusedvia recycling.

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

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    Energy intensity* in the EU chemicals industry

    For many years, the EU chemical industry, including pharmaceuticals, has madestrenuous efforts to improve energy efficiency, reducing its fuel and power energy

    consumption per unit of production. In 2008, energy intensity, or the energyconsumption per unit of production in the chemical industry, includingpharmaceuticals, was 41 per cent lower than in 1995.

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    Employment

    Employment in the chemicals industry: EU versus the USA

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

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    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 trainedemployees. As a consequence, labour productivity in the EU chemical industry roseat an average annual rate of 2.2 per cent during the 10 years from 1999 to 2009.

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    EU manufacturing industry: breakdown of investment per employee

    Investment per employee and personnel cost are two important factors for theinternational competitiveness of the European chemical industry. Workplaceequipment in the chemical industry is of top quality and investment per employee isdouble the manufacturing average. What is interesting to note is that the chemicalsector in Europe is first in terms of investment per employee among allmanufacturing sectors.

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    EU manufacturing industry: breakdown of labour cost per employee

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

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    EU labour productivity: chemicals vs. total manufacturing

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

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    EU chemicals industry: percentage of workers by level of education

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

    This figure is important because the success of the European chemical industrydepends on its well trained employees. Skills and education are an important factorin international competitiveness and the European chemical industry is facing aglobal challenge for talent.

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    Investment and R&D

    Capital spending in the EU

    Investments in innovation, including research & development (R&D) are keyelements in securing the future of the chemical industry. They not only promote theadaptation to and the development of new technologies and innovation, but arenecessary prerequisites for the continuous adjustment of corporate structures to theneeds of the marketplace. It is worth noting that the currently available figures onR&D investments give only part of the picture as it is only the starting point on thepath to successful innovation. Innovation spending in companies is increasinglyincluded under business development.

    After some choppy movements in previous years, the ratio of capital spending tosales of the chemical industry, including pharmaceuticals, in the European Union hasbeen declining since 1999 rather steadily. In absolute figures, investment had beengrowing at a consistent pace between 1995 and 2000 and then declined almostcontinuously till 2004, with a slight recovery in the following three years from 2005 to2007.

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    Capital spending by region

    The ratio of capital spending to sales in the chemical industry, includingpharmaceuticals, in the European Union has been declining since 1999. A similartrend 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, followedby NAFTA (at 4.8 per cent) and the European Union, which posted a 4.7 per centratio.

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

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    R&D spending by region

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

    Analysing the ratio of R&D spending to sales of the chemical industry it can beobserved 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 percent. But these two respective ratios have decreased to similar levels in recentyears. The same ratio in Japan is 5.2 per cent, around twice as high as the US andEU trading regions.

    **estimatedfor EU13 Source: Cefic Chemdata International

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    Sustainable Development

    Greenhouse gas emissions, energy consumption and production*

    Between 1990 and 2008, production in the EU chemical industry, includingpharmaceuticals, rose by 69 per cent, while total energy consumption was ratherstable 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 includebiotechnology processes, catalysts, membranes and desulphurisation. One aspect isincreased energy efficiency. Besides increasing the energy efficiency of its own

    processes, the chemical industry also helps to increase the energy efficiency ofdownstream users and their products through innovative inputs.

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

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

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    Greenhouse gas emissions per production*: EU versus US

    In comparison to the US chemical industry, the EU chemical sector has reduced itsgreenhouse gas (GHG) emission intensity, calculated as emissions per unit ofproduction, by a relatively greater amount and is more GHG emission-efficient. TheUS chemical industry has decreased its emission intensity by 35.3 per cent since1990, whereas the European Union chemical industry has cut its GHG emissions by65.5 per cent.