This research presents a description and an analysis of the chemical industry. In the United States and most other developed countries, the chemical industry is actually three separate industries the basic chemical industry, the specialty chemicals industry, and the diversified chemical manufacturing industry (Schneider, 1991). The description and analysis presented in this research cover the basic chemical industry.
Five areas of interest are addressed in this discussion. These interest areas are (1) industry history, (2) the industry's productive processes, together with an assessment of economies of scale, (3) product output description, together with an assessment of the level of product differentiation which is present, (4) pricing behavior in the industry, and (5) the number and size of the major producers in the industry.
The relatively large scale manufacture of chemical compounds began, as industrial development from the time of the industrial revolution onward began to create a demand for such compounds in quantity, and as processes were developed which facilitated the exploitation of natural deposits of minerals and elements. The early nineteenth century marks the beginning of the formation of chemical processing and manufacturing companies, and the development of an industrial structure soon followed.
The development of processes for the mass production of chemical based explosives was a strong growth factor for the chemical industry in its early years. The discovery of petroleum deposits, and the development of processes for separating petroleum into its chemical components, however, provided the greatest impetus for the development of the chemical industry.
Early chemical industry development was strongest in Western Europe; however, strong growth also soon developed in North America. Even in the early 1990s, the greatest strength in the global chemical industry is in Western Europe, where seven of the ...