General overview of sector
The European chemical industry is the second largest industrial sector in the EU (after the automotive sector) and the world’s number-one market. It employs two million workers directly and generates a huge number of subcontractors and indirect jobs.
The chemical industry features prominently among Europe’s exports: its 28% share of global production makes the EU the world’s biggest chemical-producing area. The sector encompasses various types of activity, which can be distinguished as follows:
- heavy chemicals, which include inorganic chemicals (production of chlorine, sodium, fertilisers, sulphuric acid, etc.) and organic chemicals (petrochemicals, plastics, synthetic rubber, etc.);
- fine chemicals, where more complex molecules are manufactured from heavy chemicals; this requires more intensive research and development (including the active ingredients of medicines);
- speciality chemicals: detergents, soaps, paints, varnishes, cosmetics, cleaning products, glues, etc.;
- pharmaceuticals: the use of active ingredients manufactured from fine chemicals.
These different business areas are confronted by a variety of challenges, especially in terms of research and development, innovation (e.g. bio- and nano-technologies) and markets. From a socio-economic perspective, the sector faces a slowdown in the growth of demand in the EU, increasing demand in Asia (with some relocation of firms), burgeoning production costs and an ever tighter regulatory environment.
The chemical sector is composed of both large multinational conglomerates (Bayer, BASF, L’Oréal, etc.) and small and medium-sized businesses. According to CEFIC statistics, the EU chemical industry comprises about 27,000 firms, 96% of which have fewer than 250 employees and may thus be regarded as small and medium-sized enterprises (SMEs). Just 4% of European firms employ more than 250 employees, but they generate 70% of total sales.
Europe’s chemical and pharmaceutical companies employ about 1.9 million workers in total (1.2 million for chemicals; 700,000 for pharmaceuticals). Most of these jobs are highly skilled, and the workers are, on average, better paid than those in other industrial sectors. Nevertheless, the overall trend for the past ten or so years has been for employment in Europe to decline.
ETUI and Observatoire Social Européen (2010) European Sectoral Social Dialogue Factsheets. Project coordinated by Christophe Degryse, online publication available at www.worker-participation.eu/EU-Social-Dialogue/Sectoral-ESD