The U.S. Chemical Industry
The chemicals industry is one of the United States’ largest manufacturing industries, serving both a sizable domestic market and an expanding global market. It is also one of the top exporting sectors of U.S. manufacturing. Accounting for 19 percent of global production, the United States is the world’s leading chemicals producer and the world’s second largest exporter of chemicals.
The industry’s more than 10,000 firms produce more than 70,000 products. In 2009, the chemicals industry had revenues of $674 billion and directly employed
more than 800,000 U.S. workers, with additional indirect employment of more than 790,000 by industry suppliers. With investment of $49 billion in research and development in 2009, and a commitment to the advancement of chemicals technologies, the U.S. chemicals industry is responsible for one out of every nine patents filed in the United States.
Strong product identification and quality, access to a highly educated workforce, world class research centers, protection for intellectual property, and a robust regulatory system make the United States a competitive home for chemicals firms across the globe.
Industry Subsectors
Basic Chemicals: These include organic and inorganic chemicals, plastic resins, dyes and pigments. Plastic resins, in particular, have experienced significant growth as a replacement for traditional materials in the automotive, construction and packaging end-use markets.
Specialty Chemicals: These include adhesives and sealants, water treatment chemicals, plastic additives, catalysts and coatings. These chemicals are performance-oriented and typically include customer/technical servicing as an aspect of their sales.
Agricultural Chemicals: These play a crucial role in the farm economy and the food processing sector. Thanks to modern agriculture, farmers have doubled the production of world food supplies since 1960, tripled the output of foods like cooking oils and meats, and increased per capita food supplies in the developing world by 25 percent.
Pharmaceuticals: These include diagnostics, prescription drugs, vaccines, vitamins, and over-the-counter drugs for human and veterinary applications. This subsector also includes biotechnology products. Strategic investment in companies, facilities, and research and development is especially important for this subsector.
Consumer Products: These include soaps, detergents and cleaners, as well as toiletries and cosmetics. While consumer products are an established segment of the industry, technological innovation and product development are important due to short product life cycles.
Federal Resources
Manufacturing Extension Partnership (MEP): MEP helps U.S. firms with individually tailored services improve their productivity, economic competitiveness and technological capabilities. The program leverages money and resources in a cooperative effort with the federal government, state and local authorities, and the private sector. In 2009, MEP services resulted in more than $3.6 billion in new sales, $1.1 billion in cost savings, and the creation or retention of more than 52,000 jobs. Project areas in 2009 included plastics and chemicals.
Industrial Technologies Program, Chemicals Industry of the Future portfolio: With nearly $32.4 billion from the American Recovery and Reinvestment Act (ARRA) available, the Department of Energy (DOE) is funding initiatives in innovation, smart grid, clean-up, renewables, carbon capture, and vehicle technology. DOE’s Industrial Technologies Program has a Chemicals Industry of the Future portfolio, which uses ARRA funds to provide grants, loan guarantees, and grants in lieu of tax credits toward research and development projects that have a high payoff but are too risky or costly to attract sufficient private funding.
Success Stories
July 2010 – SGL Automotive Carbon Fibers, a joint venture between BMW Group and SGL Group, both of Germany, broke ground on a new greenfield carbon-fiber manufacturing facility in Moses Lake, Washington. The facility – representing a $100 million investment – is part of a strategy to increase the use of carbon-fiber-reinforced plastics as a materials substitute to lighten vehicles, improve fuel consumption and lower carbon dioxide emissions. The materials will be featured in BMW Group’s future Megacity vehicle. The new manufacturing facility is expected to create 80 new jobs plus an additional 200 jobs for site construction.
July 2010 – The Dow Chemical Company, based in Michigan, and Mitsui & Company, Ltd., of Tokyo, signed an agreement to form a 50-50 manufacturing joint venture to construct, own and operate a new chlor-alkali facility at Dow’s Freeport, Texas, manufacturing complex. The venture is expected to create approximately 50 long-term jobs, plus approximately 500 construction jobs.
March 2010 – Dow AgroSciences announced plans for a multi-year, $340-million expansion at its global headquarters in Indianapolis, Indiana, which will add 550 scientific and commercial jobs over the next five years. Plans include the construction of a 175,000-square-foot research and development building and a 14,000-square-foot greenhouse.