KBS - Chemical Manufacturing and Development - Market Insight

MARKET INSIGHT • Chemicals and pharmaceuticals is one of the largest industries in the UK. In 2023, chemical industry revenues in the UK stood at £62bn, with a GVA (gross value added) of £30.4bn. The UK also plays a big role in the European chemical market, being one of the countries with the largest chemical revenue throughout the continent.

• In 2022, the value of chemicals exported by the UK to the United States amounted to nearly $12bn, making the US the UK’s largest trade partner for chemical exports.

• Chemical manufacturing can be found in all regions of the UK, but the industry is most prevalent in the north. The main chemical sites are in Scotland, Teesside, Humberside and the North West of England.

• Product segmentation:

• Basic chemicals (commodities): 35–37% of output • Life sciences: 30% • Speciality chemicals: 20–25% • Consumer chemicals: 10%

• The UK chemical sector has been adaptable. However, it faces competition and import costs post-Brexit, as well as energy cost concerns.

• UK companies with niche specialities are attractive targets for international buyers, and UK-based private equity remains very active in the mid-market. The deal flow may be driven by industrial policy, e.g. incentives for green manufacturing and by the necessity for UK firms to scale up to compete globally. • The Chemical Industries Association in the UK has highlighted the need for investment to meet net-zero targets, which will translate into both M&A and joint ventures. Moreover, cross-border deals are expected to rise as overseas buyers seek footholds in the UK’s speciality chemicals such as lithium and battery material start-ups.

In 2023, chemical industry revenues in the UK stood at £62bn , with a GVA (gross value added) of £30.4bn.