Protel Industry Focus – Chemical, UK – 2014/15

UK Chemical Industry Undergoing Recovery in 2014/15

In this article we aim to present a quick and easy to digest run-down of the main trends and developments in a highlighted sector of the process manufacturing industries in one of our covered regions. For more information on the areas we cover, click here.

After a tough few years the UK chemical industry is in a period of recovery. While unlikely to return to the global force it once was with growing pressure from America and Asia, the UK currently ranks 10th globally (3rd in Europe) as a producer of chemicals and pharmaceuticals.

The industry currently represents an annual turnover of nearly £60bn, £20bn value added to the economy with a trade surplus of £6bn. This differs from the remainder of the UK’s manufacturing industry, which runs a trade deficit of £81bn. The chemical sector currently counts for around 500,000 skilled jobs and represents 1.5% of GDP.

Capital expenditure for chemicals and pharmaceuticals is over £1.5 billion each year, 12% of total capital expenditure by UK manufacturing industries.

Engineering houses are performing a significant amount of concept, proposal and pre-FEED work with a subsequent anticipated increase in capex spend.

The industry outlook looks overall very positive, with sales and jobs expected to grow. The Chemical Industry Association predicts investment is set to mainly focus on capacity expansion, general maintenance and refurbishment.

At Protel, we are currently reporting on 169 active projects in the UK with a potential combined investment value of over £9bn. Significant product areas include fine/specialist chemicals, basic chemicals, consumer chemicals and gas.

Gas activity includes Total coming towards the end of a £500M project to upgrade their Sullom Voe Terminal. BP are also embarking on a similar sized investment on the adjacent site.
Imported shale gas is making an impact with both SABIC and Ineos investing £360M and £300M respectively on projects to allow them to process US imports and Halite have a £400M gas terminal project underway in Anglesey.

Other developing trends include the need for new sources of raw materials and new and emerging technologies. Significant investment is occurring in bioprocess engineering, alternate fuel production and white biotechnology.

There is still major emphasis on energy reduction and efficiency projects. There have been a number of breakthrough innovations in industry emissions, continued process and catalyst improvements, process intensifications and a focus on advanced recovery and recycling technologies.

Legislative changes still impact the chemical sector with Freon replacement, carbon reduction and increased safety measures firmly on the agenda.

Some of the 3 biggest investors of projects currently underway are (data taken from our MyProtel project search engine):
• INEOS – £617M
• BP – £600M
• SABIC – £520M

Major project highlights include (data taken from our MyProtel project search engine):
• SABIC – £350M
• INEOs – £250M
• Sirius Minerals – £250M
• Valero – £200M
• SNF – £160M

To gain information on specific projects or gain more insight into this sector, including all the contact details you need to start your sales process at the right time, get in touch.