Chemicals are an essential component of manufacturing, vital to industries such as construction, motor vehicles, paper, electronics, transportation, agriculture, and pharmaceuticals. Although some chemical manufacturers produce and sell consumer products such as soap, bleach, and cosmetics, most chemical products are used as intermediate products for other goods.
Chemical manufacturing is divided into seven segments, six of which are covered here: Basic chemicals; synthetic materials, including resin, synthetic rubber, and artificial and synthetic fibers and filaments; agricultural chemicals, including pesticides, fertilizer, and other agricultural chemicals; paint, coating, and adhesives; cleaning preparations, including soap, cleaning compounds, and toilet preparations; and other chemical products. The seventh segment, pharmaceutical and medicine manufacturing, is covered elsewhere.
The basic chemicals segment produces various petrochemicals, gases, dyes, and pigments. Petrochemicals are chemicals that contain carbon and hydrogen and are made primarily from petroleum and natural gas. The production of both organic and inorganic chemicals is discussed in this segment. Organic chemicals are used to make a wide range of products, such as dyes, plastics, and pharmaceutical products; however, the majority of these chemicals are used in the production of other chemicals. Industrial inorganic chemicals usually are made from salts, metal compounds, other minerals, and the atmosphere. In addition to solid and liquid chemicals, firms involved in inorganic chemical manufacturing also produce industrial gases such as oxygen, nitrogen, and helium. Many inorganic chemicals serve as processing ingredients in the manufacture of chemicals, but do not appear in the final products because they are used as reaction aids.
The synthetic materials segment produces a wide variety of finished products as well as raw materials. Some of these include common plastics materials such as polyethylene, polypropylene, polyvinyl chloride (PVC), and polystyrene, which can be made into products such as loudspeakers, toys, PVC pipes, and beverage bottles. Motor vehicle manufacturers are particularly large users of these products. Plastics materials used for mixing and blending resins on a custom basis also are produced in this industry segment.
The segment employing the fewest workers in the chemical industry is agricultural chemicals, which supplies farmers and home gardeners with fertilizers, herbicides, pesticides, and other agricultural chemicals. This segment also includes the formulation and preparation of agricultural and household pest control chemicals.
The paint, coating, and adhesive products segment includes firms making paints, varnishes, putties, paint removers, sealers, adhesives, glues, and caulking. The construction and furniture industries are large customers of this segment. Other customers range from individuals refurbishing their homes to businesses that need anticorrosive paints that can withstand high temperatures.
The cleaning preparations segment is the only one in which much of the production is geared directly toward consumers. This segment includes firms making soaps, detergents, and cleaning preparations. Cosmetics and toiletries, including perfume, lotion, and toothpaste, also are produced in this segment. Households and businesses use these products in many ways, cleaning everything from babies to bridges.
The other chemical products segment includes manufacturers of explosives, printing ink, film, toners, matches, and other miscellaneous chemicals. These products are used by consumers or in the manufacture of other products.
Chemicals generally are classified into two groups-commodity chemicals and specialty chemicals. Commodity chemical manufacturers produce large quantities of basic and relatively inexpensive compounds in large plants, often built specifically to make one chemical. Most of these basic chemicals are used to make more highly refined chemicals used in the production of everyday consumer goods by other industries. Specialty chemical manufacturers, on the other hand, produce smaller quantities of more expensive chemicals that are used less frequently. Specialty chemical manufacturers often supply larger chemical companies on a contract basis. Many traditional commodity chemical manufacturers are divided into two separate entities, one focused on commodities and the other on specialty chemicals.
The diversity of products produced by the chemical industry also is reflected in its component establishments. For example, firms producing synthetic materials operated relatively large plants in 2002. This segment had 11 percent of the reporting establishments, yet employed 18 percent of those working in the chemical manufacturing industry. On the other hand, manufacturers of paints, coatings, and adhesive products had a greater number of establishments, each employing a much smaller number of workers. This segment comprised 16 percent of the establishments in the chemical industry, yet employed only 11 percent of all workers.
The chemical industry segments vary in the degree to which their workers are involved in production activities, administration and management, or research and development. Industries that make products such as cosmetics or paint that are ready for sale to the final consumer employ more administrative and marketing personnel. Industries that market their products mostly to industrial customers generally employ a greater proportion of precision production workers and a lower proportion of unskilled labor.
Chemical firms are concentrated in areas abundant with other manufacturing businesses, such as the Great Lakes region near the automotive industry, or the West Coast near the electronics industry. Chemical plants also are located near the petroleum and natural gas production centers along the Gulf Coast in Texas and Louisiana. Because chemical production processes often use water, and chemicals are primarily exported by ship all over the world, major industrial ports are another common location of chemical plants. California, Illinois, New Jersey, New York, Ohio, Pennsylvania, South Carolina, Tennessee, and Texas had about half the establishments in the industry in 2002.
