The chemical industry today is worth billions of dollars. The major producers of chemicals in the 20th and 21st centuries have been the United States, Europe, Japan, and most recently, China. These superpowers are producing many chemicals used in our daily lives, from those used in medicine to nail polish remover. However, due to the growing call for a cleaner, greener environment, chemical companies will have to find new, innovative ways to maintain their relevance and profitability.
China’s domination of the chemical industry in the early 21st century was partially brought about due to Europe’s weakened industry. Since the year 2000, the European Union has been in a state of instability and unrest, which created a virtually stagnant chemical industry. Moreover, chemical production is expensive, and producers found that they could set up chemical production facilities in China for 40-60% less of the cost in Europe. Finally, Europe’s environmental policies made it difficult for chemical producers to set up facilities. For all of these reasons, Europe’s chemical production declined and made space for China’s to rise.
China’s chemical industry, however, is not only built on Europe’s weaknesses. China is the ideal location for chemical production for many reasons. It has the resources and raw materials, the production technology, and the availability of rapid financing and investments.
There will be three main challenges facing the chemical industry in 2020: finding ways to minimize pollution, to increase research and development, and to be active on social media.
Minimizing pollution: Even China cannot ignore everything related to the environment. The country recently banned chemical production in various regions near the Yangtze River due to over-pollution. As China struggles to find locations for its facilities and to meet the demand for raw materials, Germany, the United States, and Japan can ramp up their production.
R & D: Chemical industry experts are also saying that the next decade will be less about production and more about research and development. Production is already taking place using advanced technology. Now, new ways need to be found to use that technology. The necessary innovations will undoubtedly take place in the realm of minimizing emissions and going green, though there are plenty of untapped areas that can be explored.
Social media: In 2020, the big players in the chemical industry will need to make good use of social media. We are living in the age of the millennial and Gen Z, all of whom are used to getting information from social media. While traditionally a conservative industry, chemical producers will need to modernize their PR strategies to stay relevant.
While there is no doubt that the global chemical industry has its fair share of challenges, there is also no doubt that it will rise up to meet them. The chemical industry has existed since the 1730s and has been adapting and reinventing itself since then to suit the needs of the times. The industry’s purpose is to meet the needs of consumers, so if those needs change, the industry will change as well.