Chemicals, Industrial Organic
SIC 2860
NAICS 325
The organic chemical industry manufactures a large number of compounds for commercial and industrial uses. Important industry products include non-cyclic organic chemicals and their metallic salts; solvents; polyhydric alcohols and fatty acids; synthetic perfumes and flavoring materials; rubber processing chemicals; plasticizers; synthetic tanning agents; chemical warfare gases; cyclic crudes; dyes and organic pigments; and natural gum and wood chemicals.
Many industry firms also produce inorganic chemicals. For more detailed coverage of these businesses, see Chemicals, Industrial Inorganic.
Organic chemistry emerged during the middle and late nineteenth century, largely as a result of the efforts of French, English, and German scientists. Not until the early twentieth century, though, were organic chemicals manufactured on a commercial scale. A shortage of natural materials during World War II prompted intense research and development efforts related to synthetic materials, particularly in the United States.
By the mid-1900s, the United States had assumed a commanding lead in the global organic chemical industry. Its dominance was challenged during the late 1900s as Western Europe and Japan vied for world market share. By the mid-2000s, global output was expected to rise by more than 30 percent, but most of the increase was projected to be in Asia, largely due to China's exploding market. In fact, while consumers worldwide were expected to double in number by 2015, the number of chemical consumers in China was predicted to grow tenfold.
Organic chemicals represent a significant segment of the global chemical industry, which reached US$1.79 trillion in 2003. For the fourth quarter of 2003 alone, worldwide revenues hit nearly US$1.6 billion. International trade accounted for a large portion of revenues: for 2003, 30 percent of all global chemical sales were international sales. The U.S. exported US$20.5 billion in organic chemicals. The chemical industry was especially robust in 2004, with volumes, prices, profits, and chemical stock prices all increasing despite high raw material and the rapidly rising cost of oil. The industry was expected to continue this trend in 2005.
Chemical industry products are divided into organic and inorganic substances. Chemical companies make goods that fall into one or both categories. Inorganic chemicals, which are derived from the inanimate material of the earth's crust, include compounds such as sulfuric acid, sulfur, phosphoric acid, and hydrogen peroxide. Organic chemicals are mostly derived from substances that contain carbon, such as petroleum, coal, and natural gas. Petroleum-based chemicals, or petrochemicals, account for the large majority of organics industry shipments in the United States. For example, petrochemicals including ethylene and propylene were the largest organic chemicals in terms of volume. In 2000, production of ethylene was 55.4 billion pounds while propylene accounted for 31.8 billion pounds.
The organic chemical industry serves one primary purpose: to take a relatively few fundamental raw chemicals that contain carbon and combine and transform them into new substances with desirable physical properties. Using carbon as a basic building block, chemists are able to unite other elements such as nitrogen, hydrogen, oxygen, sulfur, and chlorine to generate a multitude of different compounds. Furthermore, each resultant compound can be manipulated, with heat or additives, for example, to produce an infinite variety of characteristics and grades. Organics play an indispensable role in modern society. They are essential ingredients to plastics, synthetic fibers, rubber, adhesives, inks, dyes, explosives, and fertilizers, and provide vital support for the health, food, transportation, and communication industries.
The organic chemicals business is separated into three major segments: wood and gum chemicals; intermediates and pigments; and miscellaneous organics, which encompass the large majority of global output. Wood and gum chemicals represent the smallest sector of the industry. Such products are distilled from both softwoods and hardwoods and include natural dyes, fuels, tar and pitch, rosin, lacquers, solvents, alcohol, and oils. They are often sold in pure form, but may also be altered or used as additives to produce products ranging from wood treatments and paints to roof shingles and flame retardants.
Intermediate chemicals are distinguished from other organics by their closed-ring molecular structure, which allows them to combine with other chemicals to create a nearly infinite variety of intermediate compounds. The three primary "aromatic" chemicals manufactured by this sector are benzene, xylene, and toluene. They are used to create a multiplicity of intermediates. For example, benzene may be combined with sulfuric acid or other substances to make plastic resins, epoxy, rubber, nylon, and detergents. Xylene is often mixed with other chemicals to create gasoline additives, solvents, polyester fibers, plastic bottles and coatings, and high-tech engineering resins. Toluene is commonly used in the production of textiles, drugs, inks, adhesives, and photographic film. Toluene is also utilized in the manufacture of benzene. Organic dyes and pigments classified in this segment are usually obtained from petroleum through lengthy chemical processes. They are used to color food, clothing, and other goods.
The organic chemical industry also produces thousands of miscellaneous chemicals and resultant compounds that comprise the bulk of industry output. The most common category of organics is aliphatics, or olefins, which are straight-chain hydrocarbons. They can be made using either petroleum or (usually) natural gas, and turned into marketable products such as ethylene, propylene, and butadiene—the basic ingredients for most organic chemicals and synthetic materials. Ethylene, the largest industry product by volume, is used in the production of plastic, rubber, fibers, detergents, solvents, and anesthetics. Olefin is often used in the production of packaging, foam, gasoline, and fibers. Butadiene is most commonly consumed by manufacturers of synthetic rubber and nylon. Synthetic methanol and methanol derivatives also comprise a significant portion of miscellaneous organic chemical industry output. For example, methyl tert-butyl ether (MBTE), a gasoline oxygenate, is among the most common methanol derivatives.
In an effort to unify the global chemical industry, regional and international standards and organizations have been established. Chief among them is the International Union of Pure and Applied Chemistry (IUPAC), and the International Organization for Standardization (ISO). IUPAC was formed in 1919, relatively early in the development of modern chemistry, as a means of creating international standards for chemically related symbols, atomic weights, and nomenclature. It is a nonprofit organization composed of representative National Adhering Organizations (NAOs) in member countries, Associate National Adhering Organizations (ANAOs), and regional and international groups and consortiums like the European Federation of Chemical Engineering. In 2002, IUPAC had 45 NAOs, 16 ANAOs, and nearly 1,000 chemists from around the globe who volunteered for its 37 commissions.
IUPAC has four primary goals: to promote international cooperation among chemists; to study issues of global importance, such as regulations and standards; to coordinate the efforts of other international chemical groups; and to advance chemistry in all aspects on an international scale. It achieves its goals through various ongoing programs and initiatives such as CHEMRAWN, a series of international conferences. Its seven main divisions include physical and biophysical chemistry; inorganic chemistry; organic and bio-molecular chemistry; macromolecular chemistry; analytical chemistry; chemistry and the environment; and chemistry and human health. In the early 2000s IUPAC focused its attention on issues related to sustaining chemical production given the harmful environmental effects inherent to the chemical manufacturing process.
Unlike IUPAC, the International Organization for Standardization (ISO) is a multi-industry initiative that has been adopted in several international areas of business, including the chemical industry. The ISO adopted a set of standards designed to assure quality and standardization in product development and...
To continue reading
Request your trial