KBS - Chemical Manufacturing and Development - Market Insight

FACTORS DRIVING GROWTH

SPECIALISATION A driver of growth in the chemical industry is the innovation and specialisation offered by firms. UK companies have been investing significantly in R&D, which has led to world-leading specialisations. For example, catalysts (Johnson Matthey), speciality surfactants and personal care active ingredients (Croda), advanced composite materials, and cutting-edge biotech applications. Developing unique products with superior performance allows chemical firms to export their products (see graph below) and command premium prices. This can be seen by the strong performance of specialities and food-chemicals sub-sectors which enjoy higher pricing power and continuous demand.

The need for advanced materials such as nanotech-enhanced polymers and high-performance composites is also introducing new applications in sectors such as electronics, healthcare and automotive.

Exports of chemical products as a percentage of total UK exports

950,000

15%

Total UK Exports (all industries) Chemical as a % of total exports - rhs

850,000

13%

750,000

11%

650,000

9%

550,000

7%

450,000

5%

350,000

3%

250,000

1%

2011

2021

2013

2017

2015

2012

2014

2016

2019

2018

2010

2023

2022

2020

2008

2009

SOURCE: Refinitiv Eikon Datastream, Allianz Research