P. 1


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# A-98-1 3

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# •9r-/3z-±-n A^industry'-by -industry overview of the U.S. economy — from manufacturing to high-tech to service industries P. 2 

# u . Industr y 

# & Trad e 

# Outloo k

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## I V P A



# CHEMICAL S AND ALLIED PRODUCT S Economi c an d Trade Trend s

•



### i U.S . Internationa l Trad e

( $ billions ) 6 0

199 0 199 1 199 2 199 3 199 4 1995 199 6 199

7 199 8 Source : US. Depenmen t o f Commerce : Buree u o f th e Cenuit : Internetkme l Trad e Adminiitration . 

### Expor t Dependenc e an d Impor t Penetratio n

2 0 I Exports/shipment s ; • 1ir.poi.fi/c

_ru.•. :

199 0 199 1 199 2 199 3 199 4 199 5 199 6 Source : U.S . Departmen t o f Commerce : Burea u o f th e Ceneus , Internetione l Trad e Admininretion .

Se e "Gettin g th e Mos t Ou t o f Outlook 2000" fo rdefinition s o f terms .P. 5 

# Chemical s an dAllie d Product s
INDUSTR Y DEFINITIO N Thi s chapte rcontain s section s o n th e chemica l industr y (SI C 28 ) an d th e followin g subsectors : industria l inorgani c chemical s (SI C 281) , industria l organi c chemical s (SI C 286) , agricultura l chemical s (part o f SI C 287) , miscellaneou s chemica l product s (SI C 289) , plas ti c material s an d resin s (SI C 2821) , an d drug s an d pharmaceutical s (SI C 283)
. Cellulosi c an d noncellulosi c man-mad e fiber s (SI C 282 3 an d 2824 ) ar e cov ere d i n Chapte r9 , "Textiles. " .ERVIE W

199 6 ipW K



### referre dt o a s th e keyston e industr y becaus e nearl

y ever y tccto r o f the manufacturin

g econom y use s it s products , th

e chemica l industr y rank s amon

g the world' s leadin

g indus

wit h U.S . chemica

l companie s accountin

g fo r a n estimated arte r o f tota l worldchemica

l production . Th

e industr y (bile s hundreds o

f companie s wit

h ove r 12,00 0 plants tha

t .• c ove r 70,00 0 differen

t chemica l products , rangin

g fro m materials fo

r othe r industrie s t

o awid e variet y o f finishe d imc r products . Chemica

l building block s ar

e used i n nearl y foo dconsume r andindustria

l products . U.S . chemica

l an dallie dproduct s industry , wit h abou t billio n i n shipment s in 1998 , i s th e world' s larges t sup -

. f chemical s andaccount s fo r abou t 2 5 percen t o f tota l chemica l production . Chemical s ar

e on e o f the nation' s industries , representin g about 11. 5 percen

t o f al l U.S . Icturing on avalue-adde dbasi s and1. 9 percen t o f gros s I c produc t (GDP) . Chemica

l companie s emplo

y ove r .millio n person s i n th e Unite dStates , equa l to 5. 5 percen

t Ih e worker s employe di n manufacturing . U.S . chemica

l industr y i s als o one o

f the country' s exportin g industries , generatin g ove r 1 0 percen t o f th e i tota l export s an

d1 3 percen

t o f all worl dexport s o

f lis . Accordin

g to dataprovide dby th e Chemica l Manu

x Associatio

n (CMA) , chemica

l industr y export s i

n totaled$6 8 billion , dow

n 2 percen

t fro m1997 , while ros e 8. 5 percen

t to reach $54. 6 billion . Th

e industry' s trade surplu s narrowe dt o $10. 1 billion , the lowest

surplu s sinc e 1988 . Althoug

h the Asia n economi c crisi s wa

s th e mai n facto r i n th e poo r trad e balance , tha

t decline als o reflectedreduced deman dfro mthe Middle Eas t

an dcentra l an deaster n Europ e coupledwit

h increasedimport s fro

mthos e region s int

o the UnitedStates . I

n 1999 , export s wer

e expectedto decline slightl y an dimports wer

e expectedt

o rise abou

t 7 percent , and the industry' s balanc e o

f trade was likel

y t o drop t o abou t $ 8 billion . Firme

r economie s in Asi ashoul dhel p lif t export s i n the yea r 2000 , resulting i

n a n improvedtrade picture . I n 1998 , worldwid

e chemica l shipments o

f slightl y les s tha n $1. 6 trillion wer

e u p abou t 0.7 5 percen

t fro mthe 199

7 level , accordin g t o dat aprovidedb

y th e CMA. . Thi s sluggish growt h contrastedwit

h a n averag e annua

l gai n o f 4. 2 percen

t in th e 1994-199 7 period . Th e softenin g trendlargel

y reflectedth e effec

t o f th e widesprea

dfinancial crisi s in Asia . Globa l dolla r shipments als o wer e affecte db y fallin g price s stemmin

g fromoversuppl

y condition s i

n man y principa l product categories . Uni

t shipments t o the Asia-Pacifi

c region dropped2.2 5 percen t in rea l term s i n 1998 , includin

g a4. 5 percen

t decline i n Japan . B y contrast , mos t majo r market s in wester n Europ e gre

w a t rate s i n exces s o

f th e worl daverage , especiall

y in Franc e andItaly . Boostedb y ne w capacity , chemica

l shipment s to Mexic o increased4.2 5 percen t an dshipment

s to Canadaros e 3.7 5 percent . Accordin g to th e CMA , th e Asia-Pacifi

c region accountedfo

r 3 1 percen t o f globa l chemica l shipment s i n 1998 , wester

n Europe fo

r 2 9 percent , Nort h Americ afo

r 2 7 percent , Lati

n Americ afo

r 6 percent , an

d othe r areas fo r the remaining 7 percent . Chemical s an d Allie d Product s 11- 1P. 6



### Worl dexport s o

f chemical s totale d$51 0 billio n i n 1998 , according to CM

A data . Wit

h chemical s no

w manufactured throughou t the world , price s ar

e determine db

y globa l suppl y an ddeman dcondition s an

d th e discountin g tactic s use db y leading producer s to gai

n marke t share . According t

o Chemica l Marke t Associates , Inc . (CMAI) , worldwid e capacit y i n bas e chemical s (ligh

t olefins , aromatics , chlor-alkali , an dmethanol ) will expandfro

mabou t 25 0 millio n ton s i

n 1990 t o clos e t o 40 0 million ton s i

n th e yea r 2000 . Worl

dchemica l consump tion o f 30 0 millio n ton s i

n 199 8 was divideda s follows , according to CMAI : ligh

t olefin s (ethylene an

dpropylene) , 4 3 percent ; chlor-alkali (chlorine and causti c soda) , 3 0 percent ; aromatic s (benzene an

d mixe dxylenes) , 1 8 percent ; an d methanol , 9 percent . The industr

y i s als o capital-intensive , alarg e use r o f energy resources , an

d heavil y regulated , factors tha

t provid e hig h entr y barrier s to ne

w competition . U.S . chemica l companie s consum e abou t 7 percen t o f tota l annua l U.S . energ

y output . Most o f th e industry' s energy consumption involve s natura l ga s an d oil , wit h th e balanc e consistin g largel y o f electricit y an dcoal . Most o f the industry' s production consist s o f commodit y chemicals , wit

h deman dlargel y afunctio n o f genera l economic activit y i n the U.S . marke

t an doversea s markets . Industr

y prof

itabilit y i s determine dlargel

y by ra w materia l costs , expor

t demand , pricing trend s in worl dchemica l markets , an

d capac it y utilization . Trend s i

n interes t rates , inflation , an

d manufac

turing a s well a s marketing cost s als o ca n have asignifican

t impact o n profits . Chemical s ar

e producedfro

mra w material s suc

h a s oil , natura l gas , metals , minerals , an

d air , whic h ar e furthe r processed int o chemica l intermediate s an

dindustria l an d consume r goods . The automobil e an

dhousing sector s ar

e ke y markets , althoug

h chemical s find thei

r wa y int o nearl y all manufacture

dproducts . Ke y trend s affectin

g leading U.S.-basedchemica l companie s includ

e specialization , globalization , an d consolidation . Wit h a n ey e towar

dincreasing profits an

d the retur n t o share

holders , chemica

l firm s ar e divesting low-margi

n commodit

y businesse s to concentrat

e o n higher-margin specialt

y chemica l businesses . Othe

r firms ar e attempting t

o achieve greate

r prof

itabilit y through mergers an

d acquisitions . The value o f all merge r an d acquisition activit

y in the worldwid

e chemica l industr y was expectedt o exceed$4 5 billio n i n 1999 , including the planned$11. 3 billio n merge r o f Do w Chemica

l an d Unio n Carbide . Th e value o

f al l merge r an d acquisition activit

y in 199 8 totale d$37. 3 billion , according to Youn g & Partners . 

### INDUSTRIA L INORGANI C CHEMICAL S Thi s subsecto rcovers development s i n th e industria l inorgani c chemical s industr y (SI C 281) , whic h include s fou rmai n produc t groups : alkalie s an d chlorin e (SI C 2812) ; industria l gase s suc h a s nitrogen , oxygen , an d carbo n dioxid e (SI C 2813) ; inorgani c pigment s suc h a s titaniu m dioxid e an d iro n oxid e (SI C 2816) ; an d miscellaneou s inorganics , includin g acids , aluminu m compounds , potassiu m an d sodiu m coi q pounds , an d catalysts , amon g man y other s (SI C 281 9 Accountin g fo rth e bul k o f chemica l industr y producti o inorgani c chemical s ar e derive d fro m eart h material s a s mineral s an d th e atmosphere
. Globa l Industr y Trend s 

### Wit h U.S . markets fo

r commodit y inorgani c chemical s suc

h I the automobile an

d housing industrie s considere drelativ e mature , mos

t futur e growt h fo r thes e product s i s expecte

dI com e fro mdeveloping nation s i

n Asi aan d Lati n AmciH l Exports accoun

t fo r clos e t o 3 0 percen

t o f tota l inorganic chr

^ ica l production , wit

h domesti c markets accounting fo r remainin g 7 0 percent . Ke

y U.S . expor

t markets includ

e Can * an dMexico , whic

h accountedfo

r 2 8 percen

t o f inorp i chemica l export s i n 1998 , followe

db y wester n Europe a

l | percent , Japa

n an d Chin aa t 2 2 percent , Lati

n Americ aa

t I percent , th e res t o f Asi aa t 1 1 percent , an

dothe r area s a l d ra cen t (se e Tabl e 11-1) . Wit

h depressedeconomi c comliil. j particularl y i n Asia , continuin g t

o affec t thi s market , exp

o inorganic chemical s wer

e expectedt

o decline almos t

5 |x-t v i n 1999 , afte

r adro p o f ove r 8 percen t i n 199 8 (se e Tabi

c I H Despit e the recen

t downtur n i n expor t volumes , long

busines s prospect s remai

n favorable . Som

e improvemci

^ expor t volum e i s anticipate di

n the yea r 2000 , generated

] firmin g economi c trend s i

n Japa n an d othe r Asia n coun n i < addition , ke

y expor t market s i n Nort h Americ ahave coniif

l t o b e resilient . Th e Nort

h America n Free Trad

e Agree d (NAFTA ) partner s Canadaan

dMexico , along wit

h Lati n A l ica , accoun

t fo r abou t 3 8 percen t o f tota l U.S . inorganic ch | ca l exports , an

d growt h i n thos e region s i s expectedt o ra j respectable . U.S . Industr y Outloo k 

### Ke y factor s affectin g domesti c deman

dfo r inorgani c chci

i includ e the healt h o f end-us e markets , environmenta l i tions , an dtrend s i n foreig n trade . Inorgani c chemical s M I primaril y b y the construction , paper , packaging , pain ! coatings , an

dfertilize r industries . Thos e market s ar e inllt i b y the overall healt

h o f th e U.S . econom

y an d b y cwif l spendin g trends . Afte r declinin g 5. 6 percen

t i n 1998 , industria

l produc i inorganic chemical s was sluggis h through muc h o f Deman dfro mexpor t market s remainedweak, am i domestic market s slumped . However, thi s situation i s c t o improv e somewha

t i n th e yea r 2000 , wit h growt h l l 200 3 projectedt

o b e i n the rang e o

f 2 percen t pe r year. I i b y cyclica l improvemen

t i n U.S . industria

l productio n Th e sector s expecte dt

o exhibit the bes t growt h ar e i n gase s an d titaniumdioxide . Chlorine shipment s also begi n to improve ove

r th e nex t fe w years , helpe

dl» ; deman dfromthe pul

p and pape

r industr y an d greatc i polyvinyl chloride (PVC ) plasti c products . Inorganic el i includ e alarg e numbe

r o f items , wit h the mos t impoit m alkalie s an d chlorine , industria

l gases , an d inorgani c | suc h as titaniumdioxide . ' *

11- 2 U.S
. Industr y & Trad e Outloo k 200 0 

# sP. 7

odiu m i (SI C produ c iterial l •

ical s s u i d retail , expect l i n A r rgani c c r tin g for | lud e C l o f inof ] Europe meric a rea s a t 6 ] ; condit h et , ex p ost 5 

### •-Tabl e | J js , long H >rove r generat e countri c iv e conti
_ e Agree d 1 Lati n ( rgani c c h te d t o i 11-1 : U.S . Trad e Pattern s i n Industria l Inorgani c Chemicals 1 i n 199 8

Bn s of dollars ; percent ) 

# 1

(Americ a jt m Europ e JNChines e Economi c Are a #Ail a M worl d
U M Countrie s 

## W
ifkore a

_ _ Export s Value 3 1,82 2 68 0 1,51 2 1,40 8 72 6 38 9 6,53 8 Valu e 1,18 1 1,05 7 64 1 37 0 33 1 Share , % 2 8 •1 0 2 3 2 2 1 1 6 10 0 Share , % 1 8 1 6 1 0 6 5 Import s

Region ' NAFTA Lati n Americ a Wester n Europ e Japan/Chines e Economi c Are a Othe r Asi a Res t o f worl d Worl d To p Fiv e Countrie s Canad a German y Australi a Russi a Japa n Value 3 1,62 9 45 9 1,68 5 74 7 12 0 1,37 5 6,01 4 Valu e 1,36 4 61 1 61 1 45 9 42 1 Share , % 2 7 8 2 8 1 2 2 2 3 10 0 Share , % 2 3 1 0 1 0 8 7 

## IP' . flnitions o f regiona l groupings , se e "Gettin g th e Mos t Ou t o f Outlook 2000." I ma y no t su m t o tota l du e t o rounding
. i i U.S
. Departmen t o f Commerce , Burea u o f th e Census
. 

### llie s an d Chlorin e iprincipa l product s manufacture db y th e chlor-alkal i indus

- |I C 2812 ) includ e chlorine , causti c soda , sod aash , sodiu m unate , an dpotassiu mhydroxide . Chlorin e an dcausti c |lominat e th e industry , accountin g fo r mor e ove r

8 0 per jujf total demand , an dsod aas h account s fo r abou t 1 5 per - |Chlorin e productio n totale d12. 8 billio n tons i n 1998 , Ijfro m$13. 0 billio n ton s i n 1997 . Industr y shipment s wer e lie d a t abou t $2. 8 billio n i n 1998 . Chlorin e an dcausti c sod a(sodiu mhydroxide ) ar e manufac

ture db y achemica l proces s calle delectrolysis . Thi s techniqu e i s accomplishe db y passin g electricit y throug h brin e ( asal t an d wate r solution) , triggerin g achemica l reaction tha t result s i n th e recombinatio n o f

sal t (sodiu mchloride ) an dwate r (hydroge n an doxygen ) t o for

mchlorin e an dsodiu mhydroxide . Th e proces s yield s 1. 1 part s o f causti c sod at o 1 par t

o f chlorine . Becaus e chlorin e i s difficul t t o store , productio n i s geare dt o mee t immediat e demand . Thus , th e availability o f causti c sod a
ni c che lenta l ical s art | g , paint y ir e infl u b y con produ c uch of f k , and? ; a n i s ext rowt h : year, , ction . I ar e in . i s als o j l ipe d by j greater ^ ani c che nportanti f ;ani c pi g 11-2 : Industria l Inorgani c Chemical s (SI C 281 ) Trend s an d Forecast s

nt o f dollar s excep t a

s noted ) 

### i. : 

## 1,, : HrycUt a M Shipments ' KShipment s (1992$ ) Bhploymen t (thousands ) Ho n worker s (thousands ) • hourl y earning s ($ ) IWpenditure s milat a f| f Shipments ' I t Shipment s (1992$ ) |jtt a MJmport s UMxport s 199 2 27,33 2 27,33 2 10 3 54. 9 16.5 9 1,55 3 22,09 0 22.09 0 4,18 3 5,32 4 199 3

26,33 9 26,09 2 93. 7 49. 7 16.9 3 1,17 9 21.84 5 21,67 0 3,99 8 4,92 6 199 4

25,01 8 24,35 8 86. 5 46. 7 17.8 7 1,30 4 21,28 6 20,72 9 4,38 9 5,30 9 199 5

26,66 7 24,74 4 81. 8 45. 4 19.0 0 1,70 8 23,99 2 22,06 4 5,18 9 6,14 5 199 6

27,74 1 25,05 2 80. 2 45. 2 20.7 4 2,00 2 24,92 0 22,33 3 5,88 2 6,25 4 1997 '

28,95 0 26,10 0

26,02 0 23,45 0 5,95 3 7,12 1 1998 '

29,60 0 25,50 0

26,60 0 22,90 0 6,01 4 6,53 8 1999 2 30,30 0 25.80 0

27,24 0 23,17 0 6,10 0 6,25 0 2000 3

31,10 0 26,20 0

27,95 0 23,54 0 6,19 0 6,38 0 97-9 8

2. 2 -2. 3

2. 2 -2. 3 1. 0 -8. 2 Percen t Chang e 98-9 9
2. 4 1. 2

2. 4 1. 2 1. 4 -4. 4 99-0 0

2. 6 1. 6

2. 6 1. 6 1. 5 2. 1 96-00 4

2. 9 1. 1

2. 9 1. 3 1. 3 0. 5 I excep t import s an d exports . un d annua l rate . flnitio n o f industr

y versu s product values , se e 'Gettin g th e Mos t Ou t o f Outlook 2000." [U.S
. Departmen t o f Commerce : Burea u o f th e Census ; Internationa l Trad e Administration
. Chemical s an d Allie d Product s 11- 3 

## <_ ?P. 8



### i s dictate db

y th e leve l o f chlorine production , creating cyclica l problem s i

n matching chlorine an

dcausti c supplie s wit

h demand . Chlorine i s use

di n th e production o

f bot h organic an

d inorgani c chemicals , including chlorinate dsolvents , titaniu m dioxide , an

dpropylene oxide ; a s afeedstock i n th e manufactur

e o f PVC ; as apul

p an dpape r bleach ; an das asanitizing agen

t i n wate r treatment . Causti c sod

ai s usedi n soap s an ddetergents , wate r treatment , oi l drilling , an

dtextile s an

dfibers . Th e chlor-alkali industr

y experiencedacyclica

l downtur n during 199 8 an

dthroug h the first hal f o f 1999 a s price s deterio

rate dunde r pressur e fro mincreasedindustr

y overcapacit

y cou pledwit h weaknes s i

n deman dfromthe pul

p an dpape r industry . O

n a n electrochemica

l unit (ECU) ( acombinedpric e o f chlorine an

dcausti c soda

) basis , price s o

f chlor-alkali prod

uct s during the first

hal f o f 1999 wer e a t thei r lowest leve l i n ove r 2 0 years . However

, th e marke t showe dsign s o f improve

men t during the secon

dhal f o f tha t year , an dprice s startedt

o firm . The bette

r pricing environmen

t reflectedtighte

r suppl y an ddeman dcondition s a s wel

l a s improveddeman

dfro mth e pul p an dpape r an doi l refinin

g industries . Price s als o benefite d fro mshor t supplie s causedb

y unplannedoutage s a

t severa l pro ducers , including the effect

s o f aplan t explosion a

t ake y pro ducer . Deman

dfro mU.S . markets shouldcontinu e t o be health y ove r the nex t fe w years . Deman dfo r PVC , whic

h accounts fo

r clos e to athir

do f chlo

rine production , will b e ake y drive r o f chlorine deman

dove r th e coming years . Th

e secon dlarges t volum e plastic , PVC , i s use

d primaril y b y the housin

g an dconstruction industries . Th e PV C marke t ha s risen i n importanc e fo

r th e chlorine industr

y i n recen t year s a s environmenta

l regulation s hav

e affecte dchlor-alkal

i us e i n solvents , pesticides , an

dchlorofluorocarbon s (CFCs) . Improvin g economie s i

n Asi aals o shouldbolste

r thi s busi

nes s i n the yea r 2000 . Ove

r 4 0 percen t o f U.S . viny l chlorid e (the ra w materia l fo r PVC ) production i s shippedt o Asia n markets . Boostedb

y bette r foreig n markets , worldwid

e chlorin e deman di s expectedto expan

d2. 5 percen

t pe r yea r throug h 2002 . B y comparison , domestic deman di s expectedt

o gro w onl y 1. 5 percen t in tha t period . A s causti c sodaproduction i s linkedto chlorine , th e 1998-199 9 slum

p in th e chlorine marke

t was reflectedi

n caus ti c soda . Causti c sodaprice s decline din 1999 , largel y as aresul

t o f reduceddeman

dfromthe pul

p an dpape r industry , whic

h account s fo

r abou t 1 8 percen t o f causti c sodaproduction . Pric

in g als o ha s been unde

r pressur e fromcapacit

y addition s in the UnitedState s an

dabroad . Ne

w facilitie s wer

e expectedt

o boost tota l U.S . chlor-alkali capacit

y abou t 5 percen t i n 1999 . Largel

y a s aresult o f th e ne w plants , domesti c producer s wer e operatin g at v 

### abou t 9 1 percen t o f capacit y in 1991 , dow

n from9 8 percen

t in 1997 . Althoug

h operating rate s in 200 0 ar e not likel y t o improve much , increase ddemand , particularly fro memergin g markets , shouldhel

p price s sta

y firm . Worldwid

e deman d growt h ove r th e nex t 4 year s shouldcreat

e abalanc e betwee

n worldwid e production an

dconsumption an

dfacilitat e a n improvedpricing environment . Sod aash (sodiu

mcarbonate ) i s anaturall

y occurring minera

l whos e primar

y us e i s i n glas s production , whic

h accounts fo

r nearl

y hal f o f tota l demand . I

t als o i s use da s asodiu

msou i chemica l production , as adetergen

t builder , i n pul p an d pa j an di n environmenta

l an dwate r treatmen t products . U. S ash production dropped9. 8 percen t t o 10. 7 million ton s i

n 1 4 a s the busines s wa s affecte

db y the Asia n economi c slowd

i Export s constitut

e avita l marke t fo r U.S . sod aash produ

i accounting fo

r abou t 3 5 percen t o f tota l domesti c product ! Wit h export s t o Asi aaccountin

g fo r nearl y hal f o f al l A l ica n sod aash exports , the Asia

n slum p continuedt

o affec t marke t negativel y i n 1999 , wit

h tota l production level s expectedt o var y appreciabl

y fro m199 8 levels . A bette

r manc e i s see

n fo r the yea r 2000 , boostedb

y economi c re

o i n Asi aan dimprove ddeman dfro mthe domesti c glas s m Althoug h the overal

l marke t fo r sod aash i n th e Unite

d i s mature , deman

dfro mth e glas s industr

y ha s picke

d U | recen t years , wit h aresurgenc e o

f glas s usag e i

n man y co n markets . Accounting fo

r abou t hal f o f U.S . sodaash cons

i tion , the glas s industr

y ha s regainedmarke

t shar e i n o glas s containe

r markets . Althoug

h competition fro

mp l packaging an

daluminu mbeverage can s wil

l limi t it s gr o sof t drin k markets , glas s remain s the preferredbottl e ma l i n the win

e an dbee r industries , whic

h ar e experie respectabl e growth . Deman dfo r sodaash als o ha s in

c fro mthe chemica

l industry , wher

e sodaash ha s benefite

d the increasedpric e o

f causti c soda , opening u

p opportun i swin g markets tha

t ca n us e eithe r on e a s ara w materia l Industria l Gase s Deman dfo r industria l gase s i n the UnitedState s i s e

x increas e abou

t 5 percen t annuall y throug h 2004 , drive

n il y b y growt h i n large-volum

e gase s suc

h a s nitrogen , ox

j an dhydrogen . Othe

r importan t ga s product s includ

e ' < dioxide , argon , acetylene , an dhelium . Niche markets exi | krypton , neon , an

dxenon . Oxyge

n i s use dextensivel

y kiln s i n the steel an

dbuilding product s industries , and ! oxyge n an dliqui dhydroge

n ar e usedi n rocke t fuel . Ni l usedi n the brewing industry , rubbe r tir e industry , and

] industries , an

dargon i s usedi

n th e manufactur

e o f st i steel an di n fluorescent.ligh

t bulbs . Production o

f nitroge n increased4. 2 percen

t i n 1998 , volume s o f hydroge n dropped9. 1 percen

t an doxygen , 

### | tion fel l 5. 1 percent . Deman

dfo r industria l gase s wil l t o b e heavil

y relian t o n the chemical , oi l refining , an d metal s industries . However

, th e stronges t

gain s wil l oc o electronic s industr

y an di n smalle r nich e markets suc ^ recover y an dwate r treatmen t applications . Hydroge

n h i one o f the fastest-growin

g sector s i n thi s marke

t i n rece i boostedb y rising deman

dfromthe oi l refinin

g industry ] use s hydroge

n to proces s crud

e oil an doi l residues . A n importan t technologica

l developmen

t i n the indus l industr y involve s th e continuing diffusio n o f noncryog j separation technology , particularl y membran

e systems

t> 

### | swing adsorption (PSA) , an dvacuu mPSA . Althoug

h ditiona l cryogeni c ai

r separation technology wil

l retai n t l volum e an dhigh-purit

y segments o

f th e industria l gu n noncryogenic method s offe r ahighl y cost-effectiv

e ull i 11- 4 U.S . Industr y & Trad e Outloo k 200 0 

# 7P. 9



### c m •po m ;(MI | W | iw n :e n >n , ID C (h i

. I M rf« H IVCf l rk e iliil i J P ui n null :rt « liiM l vth l itct i nci
. Oil * I M lie
. I

;tcd ] rin v nyi l .•arf i lis t t o I I' M ugcf l J <H | ainl l bul l pnxt j unti l priit* | i r i n | h IU U la s ! nty «

. . wt l itrinl j jenl i pre * noro i ihclt j i mal l term 

### l l ki

r smalle r customer s fo r

th e majo r

atmospheri c gases : nitroge n m d oxygen . Thes e development s hav e prompte dga s customer s * > reevaluate thei r

purit y requirement s an dmethod s o f delivery , «K I mos t majo r ga s companie s no w offe r customer s on-sit e non uyogeni c option s i n area s wher e thos e method s ca n resul t i n wbstantia l cos t

savings . Althoug h th e chemica l an dprimar y meta l industrie s ar e «alur e markets , ga s deman dfro mthos e market s exceed s secula r l»«iwt h i n end-marke t

chemical s an dmetals , reflectin g greate r wag e o f industria l gase s compare dwit h competin g materials . ftw example , th e us e o f nitroge n fo r

inertin g application s i n th e chemical s industr y i s growin g a s aresul t o f th e greate r

availabil

it y o f les s costl y noncryogeni c materials . Meanwhile , hydroge n i* findin g greate r

us e i n petroleu mrefinerie s becaus e o f Clea n Ai r *i l mandate s tha t

necessitat e th e hydrosulfurizatio n o f petro Iw mproduct s t o produc e cleaner-burnin g fuels . ()xyge n i s b y fa r

th e largest-volum e ga s use di n th e productio n i f primar y metals , wher e i t

fuel s th e basi c oxyge n furnace s tha t ttmvert pi g iro n int o stee l a s wel l a s blas t furnace s an dope n !»*rtl) furnaces . Usin g oxyge n instea do f ai r i n furnace s enhance s jwiilnistion , reduce s energ y consumption , an dreduce s emis

- #n* , particularl y o f

nitrou s oxides . Thes e advantage s ar e pro it M in g th e us e o f

oxyge n i n combustio n processe s i n man y othe r Wusiries , suc h a s glas s manufacturing . Oxyge n an dacetylen e 4*i provid e combustibl e hea t source s i n weldin g operations , *hl c carbo n dioxide , argon , an dheliu mar e use da s shieldin g $«*> > i o protec t

th e weldin g surface . 1 li e electronic s industr y wil l remai n aleadin g outle t fo r high

jjMit y gases , particularl y nitrogen , whic h i s use dt o creat e a n .«!Ijcn-lre e atmospher e tha t i s conduciv e t o th e productio n o f •JUaitiv e component s suc h a s semiconductor s an dprinte dcircui t .WSHU . Nitroge n als o i s bein g use di n ne w packagin g material s |* i provid e longe r

shel f live s fo r

perishabl e food s an dbever

W However , oi l recover y wil l remai n th e market' s mos t _Kr*H y expandin g sector , booste db y th e cost-effectivenes s o f #*j t gase s suc h a s nitroge n an dcarbo n dioxid e t o improv e ftkU. Import s i n mos t

industria l gase s ar e no t significan t

becaus e |}j*i«ihibitivel y hig h shippin g costs . However , foreig n trad e i s IfrfMitun i i n nich e gase s suc h a s helium . Wit h it s larg e natura l |j|k»iis . th e Unite dState s hold s adominan t worl dpositio n i n § ! suppl y o f

helium .

* * • H|m«nt s an d Othe r Inorgani c Chemical s •» i (i f thei r majo r market s ar e relativel y mature , growt h i n «M I for inorgani c pigment s an dothe r inorgani c chemical s I expecte dt o excee dgrowt h i n GD P i n th e foreseeabl e t lit e U.S . marke t

fo r othe r inorgani c chemical s include s Iwxliiy product s suc h a s sodiu man dpotassiu mchemicals , jinti mcompounds , an dinorgani c pigments . Hundred s o f k'H l compound s ca n b e forme db y utilizin g sodiu man d rtiumchemical s becaus e o f thei r hig h reactivity , whic h k . lite mt o combin e wit h numerou s othe r chemicals . Ke y JiMiket s includ e th e wate r treatment , pul p an dpaper , fertil

jiWw p an ddetergent , foo dan dbeverage , metals , textile , an d processin g industries . Consumptio n o f aluminu mcompound s suc h a s aluminu m oxide , aluminu mhydroxide , an daluminu msulfat e i s expecte d t o roughl y trac k

growt h i n GDP . Aluminu moxid e (alumina ) shoul dbenefi t

fro mgrowin g deman dfo r aluminu mmeta l i n th e packaging , transportation , construction , an delectrica l equip

men t an delectronic s markets . Aluminu mhydroxid e i s increas

in g it s shar e o f

th e flam e retardan t

product s marke t

becaus e o f it s environmenta l advantage s ove r competin g products , particu

larl y halogenate dflam e retardants . Deman dfo r aluminu msul

fat e (alum ) wil l benefi t fro mgrowin g concer n abou t th e presenc e o f

organi c carbo n i n wate r supplies . Municipa l an d industria l wate r

treatmen t

facilitie s ar e expecte dt o increas e thei r us e o f alu mt o enhanc e organi c carbo n remova l vi acoagulation . Sinc e th e Unite dState s ha s virtuall y n o commerciall y sig

nifican t deposit s o f

bauxite , th e or e fro mwhic h aluminu m meta l an dchemical s ar e made , basi c bauxit e deman dwil l con tinu e t o b e satisfie db y foreig n sources , primaril y Jamaic aan d Suriname . However , th e Unite dState s i s largel y self-sufficien t i n downstrea maluminu mcompounds , includin g alumina , alu

minu msulfate , an daluminu mhydroxide . Deman dfo r

titaniu mdioxide , th e largest-volum e inorgani c pigment , i s expecte dt o b e somewha t stronge r tha n tha t

fo r mos t othe r pigments , stimulate db y it s uniqu e qualitie s an dincrease d deman dfro mth e pul p an dpape r industry . Use da s th e primar y whit e pigmen t

i n pape r an dpaperboard , plastics , syntheti c rub

ber , an dcoatings , titaniu mdioxid e ha s a n extremel y hig h abil

it y t o reflec t

ligh t an dad dbrightnes s t o products . Afte r showin g annua l compoun dgrowt h o f 3 t o 4 percen t

throug h 1997 , pro ductio n o f

titaniu mdioxid e slippe d0. 1 percen t i n 1998 , primar

il y a s aresul t

o f reduce dshipment s t o Asia , whic h account s fo r abou t 2 5 percen t

o f worl ddemand . Afte r anothe r indicate d modes t declin e i n 1999 , deman dshoul dgro w i n th e rang e o f 2 t o 3 percen t

throug h 2003 . Th e globa l titaniu mdioxid e industr y ha s exhibite dincrease d merge r an dacquisitio n activit y i n recen t year s a s companie s sough t t o joi n force s t o compet e mor e effectivel y durin g th e downtur n experience di n 199 8 an d1999 . Consolidatio n activit y als o ha s bee n arespons e t o aweake r pricin g environmen t resultin g fromsubstantia l overcapacity , whic h ha s lef t produc

er s wit h erodin g margin s despit e robus t growt h i n demand . 

### INDUSTRIA L ORGANI C CHEMICAL S Thi s subsecto rcover s development s i n th e industria l organi c chemical s industr y (SI C 286) , whic h include s organi c dye s an d pigments , aromatic s suc h a s benzen e an d toluene , gu m an d woo d chemicals , pesticides , alcohols , an d variou s cycli c intermediates , suc h a s cumene , cyclohexane , an d styrene , alon g wit h man y othe rorgani c chemicals
. Al l organi c chem ical s contai n carbo n an d com e i n liqui d an d soli d forms
. 

### Globa l Industr y Trend s Consistin g primaril y o f petrochemicals , dyes , an dpigments , th e globa l organi c chemica l marke t i s becomin g increasingl y com petitiv e a s ne w supplier s emerg e fro mdevelopin g nations . Chemical s an d Allie d Product s 11- 5



# sP.1 0



### Althoug h traditionally dominatedb y di e UnitedStates , Ger

many , andJapan , thi s sector ha s ha dconsiderable capacit

y addedin recen

t year s fro mcompanie s i

n Asia , the Middle East , an dLati n America . Tha

t trendshouldcontinue despit e th e recen t financial crisi s in Asia . Th e globa l petrochemica

l industr y ha datoug h yea r i n 199 8 as i t wa s bese t b y worldwid

e overcapacity , declining prices , an d reducedshipment s to Asia

n markets . Althoug

h lingering financia l difficultie s i

n Asi acontinuedto affec

t thi s busines s i

n the first hal f o f 1999 , substantia

l pric e hike s implementeddurin g tha t yea r shouldhel

p to p lin e comparison s i

n the yea r 2000 . I n 1999 , internationa

l pric e increase s i

n majo r petrochemica

l product s wer

e triggere dby increase s in ra w materia l (naphtha ) price s an d increasin g deman

dfro msom e markets . The chemi

ca l industr y i s sensitiv e t

o change s in oi l an

dgas prices , a s bot

h o f thos e material s represen

t basi c chemica

l feedstocks an

dke y energ y source s tha

t fue l manufacturing processes . Wit h importan t derivative s use s i

n plastic s an

dfibers, ethyl

enei s th e largest-sellin g organi c chemical . Reflectin g highe r oi l feedstoc k cost s an dbette r suppl y an ddeman dconditions , eth

ylene price s ros e materially in 1999 . According t o estimate s b

y SR I Consulting , ethylene feedstocks shoul db e adequat

e t o mee t worl ddeman dthrough 200 5 despit

e projecte dgrowt h i n deman do f 4 percen t pe r yea r an d growt h o f 2 percen t i n the rat e O f globa l production . U.S . Industr y Outloo k 

### Ke y factors , affecting , the U.S . organi c chemica l industr y include th e prospect s fo

r ke y end-us e markets an

dcompetition fro mforeign producers . A s aresult of th e commodit

y natur e o f man y o f thes e chemicals , currency fluctuation s als o pla y a n importan t rol e i n globa l shipmen t patterns . Industria

l organi c chemical s ar

e use dprimaril y i n th e production o

f fuels , pl a fibers , elastomers , fertilizers , andabroa drang e o f othe r c h ica l products . Organic chemical s encompas s abroa drange j products * th

e majorit y o f whic h ar e intermediate s in ther 

### | duction o f othe r chemicals . Afte r rising fo r man y years , productio

n o f industria l ot ] chemical s droppe

d5. 7 percen

t i n 1998 , largel

y reflecting ! downtur n i n petrochemica

l productio

n an dth e reduce d opportunitie s cause

db y recessio n i n ke y Asia n econo n Exports o f organic chemicals , agood dea l o f whic h ar e ship p th e Fa r East , droppe

dalmos t 9 percen t i n 199 8 (see Table , 1-f

l Organi c chemica l production continue

dt o slid e i n J j althoug h th e rat e o f declin e subside dsomewhat . Wit

h recov e Asia n economies , tota

l domestic industria

l organic che

n productio n wa s expecte dt o decline modestl

y i n 1999 . However , som e improvemen

t i s projecte dfo r the yeatM wit h growt h increasin g almos t 3 percen t annuall y through^ " Tha t gai n shoul dreflec t acyclica l uptur n i n th e petrochen

j industr y an dimprovemen

t in th e overal

l globa l economy^ Unite dState s i s expecte

dt o remai n ane t exporte r o f or j chemical s bu

t wil l hav e asignificantl

y smalle r surplu s than

j whic h i t average d ove r th e las t decad e becaus e O

f stron g cord ( tion fromexport-oriente

dproducers i

n Asi aan d th e Middle J The trad e balanc e i n industria l organi c chemical s ha s < i n recen t years , wit

h the value o

f export s exceeding ! import s b y onl y 5 percen t i n 1998 . Importan

t expor t marke | wester n Europe , 3 3 percent ; Canadaan dMexico , 2 6 p eas t Asia , 1 4 percent ; Latin America , 1 3 percent ; and j regions , 1 4 percen

t (se e Table 11-4) . Abou

t 4 5 per import s cam

e fro mwester n Europe , 1 7 percen

t fromJap a China , 1 2 percen

t fro mCanadaan

dMexico , 7 percenff

l Latin America , an

d1 4 percen

t fro mthe res t o f the world |
TABL E 11-3 : Industria l Orga n (million s o f dollar s excep t as

'
. .;-.•« . Industr y dat a Valu e o f shipments ' Valu e o f shipment s (1992$ ) Tota l employmen t (thousands ) Productio n worker s (thousands ) Averag e hourl y earnings ' ($ ) Capita l expenditure s Produc t dat a Valu e o f shipments * Valu e o f shipment s (1992$ ) Trad e dat a Valu e o f import s Valu e o f export s noted )

. ' 199 2 64,39 7 64,39 7 12 5 -72 3 • - 18.5 5 4,79 1 59,45 1 59,45 1 8,17 9 11,53 6 i c Chemical s (SI C 286 ) Trend s an d Forecast s

199 3 : 64,28 0 61,82 6 12 3 •" - 72.9
. 18.6 8 4,06 1 59,91 2 57,72 4 8,327 11,83 9 199 4

70,09 6 65,70 0 11 6 68. 5 19.9 8 3,55 4 65,88 9 61,95 5

, 9,80 7 13,95 3 199 5

76,72 9 66,02 0 11 8 '69. 7 20.3 1 4,92 3 73,24 7 63,23 4 12,27 6 17,56 0 199 6

75,67 2 63,90 2 12 6 74. 7 21.3 0 6,26 9 71,47 8 60,93 1 13,82 3 16,15 8 1997 '

77,10 0 66,25 0

72,85 0 62,60 0 15,77 4 17,77 5 1998 '

76,50 0 65,50 0

72,30 0 61,90 0 15,36 4 16,23 8 1999 *

78,60 0 66,55 0

74,30 0 62,90 0 16,00 0 16,80 0 2000 s

80,90 0 67,75 0

' 76,45 0 64,70 0 16,30 0 17,40 0 97-9 8

-4. 8 -1. 1

-0. 8 -1. 1 -2. 6 -8. 6 '•^i'^S^^ H

Percen t Change^J J 98-9 9
2. 7 1. 6

2. 8 1. 6 4. 1 3. 5 99-0 0 ^§ §

*tJ|^ H 2. 9 *4 H 1. 8 JO T '^_____ ! "'___ i 2. 9 >-m 2. 9 7_ TM 

# 4 1- 9 ,M 

## 3. 6 

## J I
1 Estimat e excep t import s an d exports . 2 Estimate . ..••••.• • 'Forecast . 4 Compoun d annua l rate . * For i definitio n o f industr y versu s produc t values , se e "Gettin g th e Mos t Ou t o f Outlook2000." Source : U.S . Departmen t o f Commerce : Burea u o f th e Census ; Internationa l Trad e Administration . 11- 6 U:S
. Industr y & Trad e Outloo k 200 0P.1 1

;11-4: 5 U.S . Trad e Pattern s i n Industria l Organi c Chemicals 1 i n 199 8 li s o f dollars ; percent

) Hja-t>n^; ; |,>0:<:. : .•- . (• • »• • B £ • pieric a | Europ e Chines e Economi c Are a Mi a ptrtd . 

# Il"*'- ' (^Countrie s : _R ~ s '
_•__-• • Export s

.•••!
. Value ? 4,23 3 2,14 8 5,28 4 2,29 9 1,43 5 83 9 . 16,238 " Valub 2,51 0 1,72 3 1,24 6 1,13 7 1,08 8 Share , % . 26 .13. . 3 3 1 4 9 -5. . 10 0

• r ' Share , %

1 5 1 1 8 7 7 Region 2 :

NAFTA Lati n America.,.. , ' Wester n Europ e Japan/Chines e Economi c Are a Othe r Asi a Rest o f worl d Worl d

- To p Fiv e Countries : Japa n .German y Canad a • Unite d Kingdo m Franc e -•"• Import *

• • •

- • • Value 3

1,81 0 1,04 2 6,88 4 2,62 6 794 2,20 9 15,36 4 Valu e 2,07 3 1,49 1 . 1,32 5 .95 6 • 90 8 srv' ' Share , % .12 . ...,-. ,..-., . 4 5 1 7 5 -': 1 4 " ' 10 0
: Share , %

. 1 3 ; - 1 0 9 i s - - , 6 • . ,-..+ - 6

ttons o f regiona l groupings , se e 'Gettin g th e Mos t Ou t o f Outlook 2000." I no t su m t o tota l du e t o rounding .

. Departmen t o f Commerce , Burea u o f th e Census . i d Organi c Pigment s eman d fo r dye s an dorgani c pigment s i n th e Unite d ejecte d to;ris e abou t

2 percen t annually.ove r

th e nex t gbplstere d b y growth i n ke y en d market s suc h a s pack

dlprintin g inks . Growth i n deman dfo r organi c dye s e n stimulate db y ongoin g shift s frominorgani c t o igments . However ; othe r importan t

markets , suc h a s i'paint s an dcoatings , ar e expecte dt o continu e t o b e jjjjgfestringen

t environmenta l regulation s tha t hav e fos

sio f othe r products. . Deman dfromtextil e market s i mute di n recen t

years . • ••v•>•'••- • •': wv » ||organi c pigment s busines s als o ha s bete n hampere d "Vimpbr t competitio n fro mlow-cos t overseas pro ilorants . Competition-fro mdevelopin g 'countries ; ffndi v . China, . and . othe r

Asia-Pacifi c - nations , ha s ^prevalen t

i n the-textile s sector , die'larges t en d _t_ > ; becaus e o f

*inta^ed"organic =f

pigmen t "pro

i countries t o support

thekgrowin g textile mar ials o hav e expande dthei r operation s i n th e jjgegknrt o takeadvantag e of-lowe r labor , enyiron

- »'««
.

.«• £ •iOS



## ms IJMcel ; an d ouie r

costs * >

J ••<s % i : . s,s ; i s significaritli i th e "organi c colorant s industry , [secto r bein g affecte dmor e significantl y tha n th e itssector . TheUnite d State s i s expecte dt o main

pas anet importe r o f dye s an dorgani c pigments , •ar e expecte dt o increas e muc h more.i^iai^1p, (

. 0 Western Europ e shoul d remai n adominan t nite dStates , althoughles s expensiv e organi c 5,1 © 'appl y downwar dpressure * o n ohos t dyeistuf f ^profi t mai^m s for 1 U.S. : , :manufacturers ; West *

_..... . 'andMexico?fShd<the'Asia»Pacifie j regio n " i,remai n th e "most:significan t market s fo r

U.S . fe #an dorgani c pigments . h > ••'•.•;, . 

### AGRICULTURA L CHEMICAL S

Fertilizers'- ' - : 

### '' n 

### ;-' , 

### ;^ ( 

### T.x. : 

### ''r i 

### :''': Worl dconsumptio n o f

fertilizer s totded.l'3i54^mi^6nV.tons.-i n '• th e 1997-199 8 growin g season , u p 1. 3 percen t from.the com parabl e 1996^-199 7 season , accordin g t o ;data>;proyidedrb y ;th e Internationa l Fertilizer . Industr y Associatio n ^A). ; '.Nitrogef i fertMzer s accbuntedifb r

5 9 peircent

o f worl dfeftiliiier

bbtisump

tionj-phosphate fertilizer s for;24percent , iand;,pptas h fertilizer s fo r 17percent ; . . • .'i-nvr..

- •..,,,v;;;|t.„ . Th e fertilizer ; industr y i s a?relativel y mature-<business : i n th e United?State d 'reflectin g stagnanc y o r modes t jgrowtB^ih-th e underlyin g America n Mm.economy . Th e oyerpi'fertiiiiei r biisi ^ onessis.highl y seasonal ; wit h th e mos t sale s occajning-before:th e sprin g an dfal l plantings . Domesti c deman d i s ; largely. afunctio n o f the r amoun t o f acreag e planted , withfannersVplantingrdeci ^ : siorisimpoi^tl y iiMuenced^b y grain.pn^/'fe^er^'sUp^ji t ^programs , an d weathe r conditions.vGth^-^^^qr^Jiii'§ctpr s affecting ; thi s busines s includ e carryove r .inventorie s .fronyth e ; previou s year, - productio n costs ; environmenta l concerns , ; an d *'SoU*moisture. i! Afbump6r crofpki n th e previou s year*typicall y 'iraultsi h lower'price s an dfeducie d planting s i n thetstrrentyear . However , whe n favorabl e weatKeir 4 cMs(Js'ihcn&ise d grainiaii d bea n yields, ' additiona l fertilize r applicatio n i s neededin . the

curren t year-t o compensat e fo r

soi l nutrient^depletiori . * «i f ' - ' '^Fdre!*! ^ o f U.S . industry ! shipment s (se e Table s 11- 5 an d 11-6) . Thus , change s i n economi c condition s abroa dan dfluctuation s i n cur renc y eJcchahgerrate s Sca n >materiaU#saffect"ih & fertilize r btisi T ness ; GMna.accountS!forclose:to33:percent!ofhU.S2/fertilize r exports ; othe r

•AsiaTPacifi q markets , 3 7 .percent;lLati n America , 25;percent;andallotherinarkets,'^percent , vr: ' ..U ; ;il>'•.••>•> . After 4 year s p f

increase dvolume , worl d fertilize r consump tio n wa s expectedt o declin e fractionally i n 199 9 an dremai n fla t Chemical s an d Allie d Product s 11- 7



# /OP.1 2

TABL E 11-5 : Agricultura l Chemical s Excep t Fertilize r Mixin g (SI C 2873,2874 , 2879 ) Trend s an d Fo r (million s o

f dollar s excep t a s noted ) '..>. • . >-U.!) i

- ; _••' ' '.:.
. . . ' .., ' : '••sfe;.^ ' •

• • •-•.ii:-
. ••

• Industr y dat a Valu e o f shipments 6 "''''. ' 287 3 Nitrogenou s fertilizers ' 287 4 Phosphati c fertilizer ^ " , ', , 287 9 Agricultura l chemicals
. . . not^elsewrier e classified '["
. "\. Valu e of.shipment s (1992$ ) 287 3 Nitrogenou s fertilizer / 287 4 Phosphaticfertilizer s ; ; '•"' 2879'Agricultura l chemical s Y
. no t elsewher e classifie d .*•" ' itY ! --i/J.-.i:-.'•••'•i T ;.''. ! ..V- : '51 , l.-. > Tota l employmen t (thousands) ; 287 3 Nitrogenou s fertilizer s r 2ffl74,Rh^>hiBtfcIfirtilizers,,.. vi' J 287 9 Agricultura l chemical s . • • . ..no t elsewher e classified;
. . : , Productio n worker s (thousands ) 287 3 Nitrogenou s fertilizer s : , 287 4 Phosphati c fertilizer s ' ' i 287 9 Agricultura l chemical s • no t elsewher e classified ^ j «? : AveFag £ hourl y earning s ($ ) '
. 287 3 Nitrogenou s fertilizer s 287 4 Phosphati c fertilizer s , 287 9 Agricultura l chemical s ! : no t elsewher e classifie d : ~"-\-' £ C^|>rtare>^nditures : -'•-«f i 0; : • ; j, ' M73iNitr^en.ou8;'!tartilizi^;f>.sf. 1 -^^J^q^^j^^^liatrftv,-.-',/^ ' 287 9 Agricurt u ra i chemicals ' " i ho t dsei^er o ctafesified>^ « •At&ttiifytt. .f t ;-'(•••
. ' -J : Produc t dat a A/aiiSiotsWfimentstiii^i. i ';'; ' 287 3 Nitrgogenqu s fertilizer s , . 2 ^ 4 f^osphati c fertilizer s . .. . j r 3l^$'>^rJeul-tn£ l cKerriitMfif 1 " ^ : ^ eteevrtVereclassifie d sisx V^li^^fii^iSi^^lMK^) m ^ 287 3 Nitrogenou s fertilizer s "-' * 287 4 Pljospha^ c fertiliser s -287 9 Agricultura l chemical s ' ftbffelsewhere'Sassified 1 

### vT^'i&r^ " ' ValU e import s ' • ' - ' r Value , of ^ export s j , r,".;«.• « ' 199 2 16,63 7 3,17 7 4,31 8 9,14 2 16,63 7 ' 3,17 7 •-~ ; 431 8 '

• :'> '.'••.-. • , -• : "."• .4'T 4 ?
. 33. 3 " 7. 0 :U.,i,9. 5 :,

, . 16. 8 ••;. -'21. 0 4. 7 ; ; 6. 7 Y|ftf'? ;6 . 5 7« r i£oo~ ; r 15.6 6 13.84
. '
. . Y?. "
. . qif15;5 7 ' !t'ir>'94 4 ' , ,>Y'.i^209;. i

. V ,.,.:3Q7 ; "'""'""' ' .•iK:i'^428 f l P"*'" - ' ' 'i s .5,74 3 '
. ,. ,3,589., ;

~ 3,929 ' viCSS i ;;'»•:: : :. ' 199 3

16,66 9 3,46 7 3,64 8 9,55 4 16,63 7 334 0 4,15 5 9,14 2 32. 7 7. 0 .J:,9. 4 , " . . . • 16. 3 20. 5 4. 7 6. 6 ".!".'..,?_?•• * ^.5~7 9 16.1 1 14.7 0

- • 16.41 , : '•'•'692' - ,"t-J186:' :

, Y ,150 « " . ' " " " : -356 - f 1537 V 3,73 7 ^3,397 , i'-.n'.- •:•:•- *r-'f.'8,225?iiiv8,737 i 

### ' J<! 

### ii.iW ; r 3.589' - 332 9 ^

" 8\22 5 •s - » 1,52 1 - >

, 3,59 8 -i5;830 7

- '3.60 0 I . W 836 1 1,80 1 3,05 1 199 4

18,47 9 4,24 6 4,59 7 9,63 6 16,56 9 3,61 7 4,152 ' 8,80 0 -31.8:
.

. 8. 0

- , .8.5 ^ 15. 3 20. 4 5. 4 6. 2 Y i 8. 8 r17.41 " 16.6 9 16.6 9

' • • •18.4 0 ' 63 3 '•'" • 175 , 

### -.,-. . i 5 

### ? ; 29 9 '

• -'•'v;;.
. 17,54 8 ••>' .4,428. - "4,27 2 ~ .

• ; - J ; ••• ; - : - * • • • * • « 8348 "
v r 15j7l i ' 3,77 2 335 9 8,08 0 r * 2,25 3 4,03 9 199 5

.. - 19,86 2 4,44 6 : 5 ! 337""'
. 10,07 9 ° 1634 1 3,26 7 4,08 3 8,99 1 30.7,
. 7 3 v

. _„8. 6 , 14. 8 20. 3 5. 1

. ' 6. 5 :"•-- * J >

. 17.89 ' 16.37,,
. 16.7 5

•'• • .- . •;.!' . .19.8 5
. • • '68 » Yi. r 17fr. i

. ;> . 9. .

• *I.'. ! 318'I !

' • f ' i ' • 19^6 8 ,-4;761| : '.'4J9IM " .: ; 9,62 3 '15,89 6

- 3,49 8 331 3 j [ 8,58 5 i 2,53 6 4,73 4 -199 6

20,96 3 4,37 6 5,68 4 10,90 3 16,82 5 3,19 6 4,03 1 ; j, 9,59 7 i-O 29. 1 7. 5

. „ - 7.8.
. 13. 8 18. 7 5. 1 5. 8

4 , 7. 8 "18.0 9 16.9 5 17.3 0 : ' 19.4 5 < . 96 7 .!•
. 30 5 20 0 -"••- • 46 3 20,26 5 ,4,86 4 5,36 4 i J • v . :i0,03 8 ;V'l"e;'l9 3 • 3 55 3 ,3,80 4 8,83 7 2,59 4 4 63 5 1997 ' 20,74 0 3,96 0 5,86 0

. , 1032 0 16,72 5 2,89 0 4,22 0

• '' 9,61 5

• i, " . • •

, • • • , i

..; • •-., .

• •- : :•.• :

: " : .'".- ' • : 20,00 0 • 4,40 5
. 5,53 5

. ' { ' " , : ' - V 10360'
. ; i6,00 0 h.3,220: : ,.3330,
. i!J5.85(. i i&-!.; : .4< "'f2',556'* ' 4,87 4 1998 '

21,11 0 4,04 0 6,03 0 11,04 0 16,97 0 2,95 0 4,30 0 9,72 0

r . ..; .

• > 20,37 0 4,50 0 5,70 0 10,17 0 ! -16;24 0 ;• : 3,29 0 ijAOlO ;

. ' "_"• ' .". ' • ' -8,94 6 ;:;•;•?•:! * =2,63 2 5,22 2 1999 s 21,45 0 4,10 0 6,12 0 11,23 0 -17,25 0 3,00 0 436 0 9,89 0

,. . . . .• .

.. . . . »

• • ..• : •« .

.... . w 20,70 0 4,570 ; 5,79 0 10,340.
. 16,50 0 ,3,340
.

. s ,4,07 0 •gjO-O 1 '11,.!. ' ' • «*2,703 ' 5,55 1 • .,•, .

, 2000 3 21,75 0 4,14 0 6,18 0 11,43 0 17,50 0 3,03 0 4,40 0 ' 10,07 0

.. . t - - . .

..-. ,

' . •,.• .

, •

. i * : • • Y

. ' '' "

• . '••; , •'••. •

.-• ' ••' " •,- . 20,99 0

. .4,620.
. 535 0 ' ,10,52 0 1 16,73 0 .;i!3,370 ; jaf .4.!l0 . r, ' ; ! 9,250 ! j ;bV..'.;_ .•.'.

• V;.2;78 4 ' 5,92 8 97-9 8

1. 8 2. 0 2. 9 1. 1 1. 5 2. 1 1. 9 1. 1

-.,, . i ! •
t . ' «

. ' •

• • . :-:• "

. ,. , •l/l'--
. 1.9 "

,!,.«. • 3, 0

. . -rjiv i '"'i.5 ; '
• i 2. 2 • 2. 0 •: , ;, . SI
• 1.6 ' 9 - ^ • 3 3 1-..7. 1 Percen t Che,n(

j 98-9 9 99-0C

f

. ' .Il l 1. 5 ::m 

### 1. 5 ;' :, 

### 'i'tf§: • «l
_ 1. 7 1.8 3

1 •*
. .At f 1. 6 1. 4 J 1. 7 ,..,.','"ljtf l 1.4.'" " 03 3

1,7 ' •'. 1

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### \M

. ; >, i '-I'-'Jis a • • • v ' T'-^a l
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. !''!?ATM [ • ' > •'•iitiJitftim M .'•,.' . frJIffl^ H

• ' ''••'!ftife« | b'i.i'r:!.'|luS^ j 1 i._«tffl__l • •.-'.'""iSSSff l .'•'u'»V. l i<'-^_ffl H
•• • 1.61;-i t M3 0 

### • VS;ww!ji |

. 1.6 1 tjm <1.7:vir.^^ j

, , I' M ' » -. 1 .-*i.l'W__ | 

## "'''•* : 6 

## « r 

## 4J^ | iv'iff^JH^ W 

### ii'^^osa H ;: . e 

### x^itiSmSm '• , ^2.7.'5¥ ! 'My H 

### :)t. ; ?-i 3 

### '"l*f^ M

' Estimat e excep t import s andexport s , ',...,.. . iEsttmate 5 2 w - - ' ' ' ' V ii>: ' ' ^ ' •''FbrecBStt- ' f -.'M.w i •; : ,•<.•; . 4 Compoun d annua l rate > , _, j, 1 -

> , 'i

.'.•'vi.';-.'.."i ' .S': : * Fo r a definitio n o f industr y versu s produc t values , se e 'Gettin g th e Mos t Ou t o f Outlook 2000" ^ Source U S Departmen t o f Corhmerc e Burea u o f th e Census , Internationa l Trad e Administration . r - » i ! ^ j ) /- > n }:•:.,.:• . ni: - :, ;; : J f J 'j i J J i v ' ' ^ u p th e yea r

2000 . Th e fertilize r

busines s ha s bee n hur t

b y slug

gis h demad d i n th e Umte d States , economi c problem s i n Asia , andiexces s globa l capacity fo r ke y product s suc h a s ammoni a

. M dammoniu mphosphat e (DAP).Reflectin g reduced acreage fo r co man dcertai n othe r

crops , DA P consumptio n droppe da n estimate d 3 percen t

i n thetl998*1999;growin g season : - - ! W >'. f 1Zil£0 '.' •> rri-i'-'M,

. :•-.:•• <:.?s.'i <.'V '..T. '4 .i.'iv V i»s | ; ;
.. : iiirUtUsai

j •>,iE!pmesticHdollar

- fertilize r shipment s .arefie

x anothe r declin e i n th e yea r

200 0 a s continue dhigj ^ tones ' an ddepresse dgrain 1 price s ar e expdcted^td | izer ; demand'i n th e 1999--2000 > growin g seasons ! an dwhea t acreag e droppe dabou t

2.6percent>i n thr a season , an dadro p o f

3. 7 percent , isexpected'.forw l 11^ 8 'U^S;iIndustr y & TradeOiitlodl c 200 011-6 : U.S . Trad e Pattern s i n Agricultura l Chemicals 1 i n 199 8

I o ( dollars ; percent

)

'<•• ' p ,

. " • [urope IfMt e Economi c Are a (

_ * • Countrie s t^i =

» ; s G_-**i . 

## It; . Export s

* Value 3

1,18 1 98 2 44 4 1,39 1 81 7 40 7 5,22 2 Valu e 1,09 3 92 3 41 5 31 8 30 9 Share , % 2 3 1 9 8 2 7 1 6 8 10 0 Share , % 2 1 1 8 8 6 6 Region 2

NAFT A Lati n Americ a Wester n Europ e Japan/Chines e Economi c Are a Othe r Asi a Res t of worl d Worl d To p Fiv e Countrie s Canad a Trinida d an d Tobag o German y Russi a Mexic o Import s Value 2 1,45 6 30 0 47 3 6 2 1 4 32 7 2,63 2 Valu e 1,36 8 24 5 20 0 11 2 8 8 Share , % 5 5 1 1 1 8 2 1 1 2 10 0 Share , % 5 2 9 8 4 3 fH74, 2879
. on i of regiona l groupings , see "Gettin g th e Mos t Ou t o f Outlook 2000." I no t su m t o tota l du e t o rounding
. .Departmen t o f Commerce , Burea u o f th e Census
.

&£-• WCrcag e fo r co mros e fractionall y t o 80. 2 millio n acre s jwV ' growin g season , whil e planting s fo r soybean s |2. 9 percen t

t o 72. 0 millio n acres . Farmer s hav e opte d |BK>r e soybean s in recen t

year s becaus e o f

attractiv e |*ne w findings o f

soi l benefit s fro mth e annua l rotatio n •wit h corn . i s th e mos t

commonl y use dfertilizer , wit h anhy

itjtoni abein g th e principa l ingredien t i n mos t nitroge n ^Anhydrou s ammoni ai s produce db y combinin g ; nitroge n wit

h methane . Anothe r

relate dnitroge n fer

u, acombinatio n o f

anhydrou s ammoni aan dcarbo n cuus e nitrogen-base dcompound s evaporat e fro mth e i fertilizer s mus t

b e applie deac h year , resulting i n a til e marke t for thi s commodity . Phosphat e fertilizer s |ifro mphosphat e rock . Phosphat e roc k i s combine d *aci d t o yiel dphosphati c acid , whic h i s further jpht o DAP , th e mos t

widel y use dphosphati c fertilizer . pine dprimaril y fro mdeposit s o f potassiu msalt s i n nany , Russia , th e Unite dStates,-an d Israel , jiosphat e productio n ros e abou t

3 percen t

i n 1998 , fio^IMC Globa l estimates , with U.S . producer s fo r 4 1 percen t

o f worl dconcentrate dphosphat e pro undustry' s curren t

phosphori c aci dcapacit y uti

le s abou t 7 7 percent , wit

h utilizatio n expecte dt o [HJw i are aove r

th e nex t few years , accordin g t o IM C pver , b y 2005 , utilizatio n shoul d reac h 8 5 percen t 1 deman dcondition s ar e mor e closel y matched . I'State s export s abou t

5 5 percen t

o f it s phosphat e duction , wit

h abou t 3 0 percen t

o f tha t volum e ||na . Abou t

one-fift h o f U.S . nitroge n fertilize r

pro Iported . Despit e it s leadin g position , th e Unite d jjpccte d t o relinquis h it s dominan t positio n i n phos

Bilker s t o Morocc o eventually . Wit h it s phosphat e Winuite d a t ove r 5 0 percen t

o f worl droc k

phosphat e reserves , Morocc o i s currentl y th e larges t phosphat e roc k exporter , wit

h mos t o f it s productio n goin g t o Europe . China , th e former

Sovie t Union , an dIndi aar e als o larg e phosphat e fer

tilize r producin g countries . Worl dpotas h productio n increase dabou t 2 percen t

in 1998 . Nort h Americ ai s th e leadin g produce r an dexporte r

o f potas h products . Ove r

9 5 percen t

o f worl dpotas h outpu t

i n 199 8 con siste do f potassiu mchlorid e o r

muriat e o f

potash , wit

h th e res t consistin g mostl y o f

potassium-base dsulfate products . Accord

in g t o IM C Global , worl dpotas h consumptio n i s expecte dt o gro w 1 2 percen t whil e capacit

y i s expecte dt o ris e onl y 6 percent , resultin g in highe r

operatin g rate s an dfirmer prices . Overal l potas h consumptio n shoul dtrac k

growt h rate s i n th e worl deconomy . Despit e prospect s for

stagnan t o r declinin g level s o f

fertilizer consumptio n i n th e Unite dState s an dwestern Europe , develop

in g nation s i n Asi aan dLati n Americ arepresent importan t growt h market s for

fertilizers . Accordin g t o th e IFA , Asian countrie s accounte dfor

4 8 percen t

o f fertilize r consumption , Nort

h Amer

ic afo r 1 6 percent , western Europ e fo r 1 6 percent , Lati n Americ a fo r 8 percent , an dothe r

area s for 1 2 percen t

i n 1998-1999 . Stron g demographi c growth , risin g incom e levels , an d effort s t o improv e diet s an dgenera l standard s o f livin g i n devel

opin g area s i n Asia , Lati n America , an dAfric ashoul dfoste r greate r productio n o f

grain s an dothe r

produce . Thi s shoul d resul t i n increase dus e o f

fertilizer s t o lif

t production . Th e tota l worl dpopulatio n i s projecte dt o gro w fro m6 billio n i n 199 9 t o ove r 7 billio n i n 2010 , wit h mos t o f th e growth occurrin g i n emergin g o r

thir dworl dcountries . Asi acurrentl y account s fo r abou t hal f o f worl dfertilize r

consumption . Pesticide s Afte r several year s o f

declinin g sales , th e $3 1 billio n worldwid e pesticid e marke t

wa s expecte dt o increas e slightl y (les s tha n 1 percent ) in 1999 , accordin g t o dat aprovide db y Woo dMackenzi e 

## ft! -

Chemical s an d Allie d Product s 11- 9 

# /2 -P.1 4

Consultants , aresearc h fir mi n Edinburgh , Scotland . Althoug h deman dha s remaine dsluggis h i n th e Unite dState s an d wester n Europe , shipment s hav e benefite dfro mimprove ddeman dcondi

tion s i n developin g countrie s i n Lati n Americ aan d eas t Asia . Deman dfromAsian market s wa s depresse din 199 8 b y economi c problem s an d unfavorabl e weathe r conditions . Pesticide s ar e chemica l agent s tha t ar e use dt o destro y o r repe l plan t

o r anima l pests , with herbicides , insecticides , an d fungicide s representin g th e principa l produc t categories . Th e Unite dState s i s th e leadin g globa l manufacture r o f chemica l pesticides , with German y an d Japa n als o bein g importan t pro ducers . North Americ ai s th e larges t geographi c marke t

fo r pesticides , accountin g for 3 2 percen t

o f 199 8 globa l sales , accordin g t o Woo dMackenzie . Othe r importan t

market s ar e western Europ e (2 6 percen t o f 199 8 sales) , th e Far

Eas t (1 8 per cent) , Lati n Americ a(1 6 percent) , an d othe r area s ( 8 percent) . Leadin g globa l pesticid e producin g corporation s includ e Novartis, , Monsanto , Astra-Zenec aCorp. , Dupont , AgrEvo , Bayer , Rhone-Poulenc , Do w Chemical , BASF , th e Cyanami d divisio n o f

America n Home s Products , an d FM C Corp . Globa l sale s o f

insecticide s an d herbicide s wer e relativel y unchange di n 1998 , bu t

deman dfor

fungicide s improve da s fun

gu s outbreak s increase da s aresult o f we t weathe r condition s i n Europ e an dJapan . B y contrast , weathe r condition s reduce dinsec t infestatio n i n Nort

h America , Europe , an d Japan , resultin g i n a reduce dnee dfor

insecticide s an d herbicide s i n thos e markets . Greate r us e o f insect-resistan t

cotto n an d herbicide-resistan t foo dcrop s als o ha s affecte dth e overal l pesticid e business . Geneticall y engineered , o r transgenic , plant s hav e bee n devel

ope dtha t hav e resistanc e t o insects , herbicides , an d plan t dis

eases , reducin g th e nee dfo r conventiona l pesticides . Le d b y Monsanto , man y companie s hav e develope dtransgeni c seed s fo r corn , cotton , an d soybeans . Abou t one-hal f o f al l soybean an dcorn acreag e plante di n th e Unite dState s today i s use dt o gro w geneticall y modifie dseeds . Approximatel y one-thir do f tha t outpu t i s exported , primaril y t o market s i n Europ e an d Japan . Althoug h U.S . producer s argu e tha t transgeni c seed s provid e importan t

qualit y an d cos t

advantages , ther e i s growin g oppositio n t o thos e products , especiall y i n Europe , becaus e o f consume r apprehension s an d environmenta l concerns . Total domesti c sale s o f

U.S.-mad e an d importe dpesticide s gre w 1. 1 percen t

t o $8.95 billio n i n 1998 , accordin g t o th e America n Cro p Protectio n Associatio n (ACPA) . Export s o f U.S.-mad e pesticide s totalin g $2.8 6 billio n wer e essentiall y unchange dfro mth e leve l i n 1997 . With thi s busines s affecte db y pric e erosio n cause db y wea k market s an d increasin g us e o f geneticall y modifie dseeds , man y companie s ar e explorin g way s t o dives t o r merg e thei r

agrochemica l businesses . Increase dcon solidatio n i s anticipate di n thi s marke t i n th e year s ahead . Corn represent s th e larges t singl e marke t

fo r cro p protectio n products , accountin g fo r

2 6 percen t

o f domesti c pesticid e sale s i n 1998 . Othe r

importan t

cro p market s i n that

yea r include dsoy bean s (1 7 percent) , cotto n ( 8 percent) , smal l grain s ( 5 percent) , an dvegetable s ( 4 percent) . Th e balanc e (4 0 percent ) wa s com pose dlargel y o f

fruits , rice , sorghum , peanuts , an d potatoes . Revenue s frompesticide s designe dfo r us e i n th e home , garden , turf , an d othe r

noncro p categorie s totale d$1.6 4 billio n i n H i representin g 1 4 percen t

o f tota l domesti c pesticid e sales . Th e pesticid e marke t

i s amatur e busines s i

n th e Unite dSta

n wit h ove r 9 0 percen t

of corn , soybean , an d cotto n acreag e j major producin g state s bein g treate deac h yea r wit h pesticit ! Change s in yearl y sale s ar e largel y afunctio n o f startin g im

i tor y levels , change s in plante dacreage , weather , an d far mp i Representin g th e larges t

pesticid e category , herbicid e totale d$ 6 billio n in 1998 . Herbicides , whic h ar e use dt o coni l weeds , brush , an d othe r

unwante dvegetation , accounte dfo r i percen t o f total U.S . cro p protectio n sale s in 1998 , accordirn j th e ACPA . Abou t

8 8 percen t

o f U.S . herbicid e sale s i n 199 8 ^ for cro p use , o f

whic h co man dsoybean s accounte dfo r abou t H third s o f total volume . Herbicid e sale s ros e 0. 6 percen t in 19 * Use dt o guar dgrowin g o r store dcrop s frominsect , inl' c tion , insecticide s ar e th e industry' s secon dlarges t produc i i men t an dtotale d$1. 8 billio n i n sale s i n 1998 , accountin g I percen t o f industry sales . Cotto n an d corn wer e th e leadin g i market s for

insecticide s i n 1998 , with eac h on e accounting ! abou t 1 9 percen t

o f tota l insecticide sales . Corn insectid sale s rebounded2 7 percen t i n 1998 , after

acomparabl e dro

j 1997 . Th e gai n wa s du e entirel y t o asharp increas e in sal e cor n soi l insecticides . Total U.S . insecticide sale s increased ! percen t i n 1998 , wit

h th e gai n restricte db y th e widenin g ni l acceptanc e o f

insect-resistan t

plants . Fungicide s accouni i 8 percen t o f tota l pesticid e sale s in 1998 . Whil e agricull^ use s represen t

th e larges t

en d market , fungicide s als o ar c i extensivel y i n th e lumber , paint , plastics , an d pharmacc u industries . Fungicid e sale s ros e 1 3 percen t i n 1998 . 

### MISCELLANEOU S CHEMICA L PRODUC T Thi s subsecto rcovers development s i n th e miscella n chemica l product s industr y (SI C 289) , whic h includo« ( mai n produc t groups : adhesive s an d sealant s (SI C explosive s (SI C 2892) , printin g in k (SI C 2893) , carbo n I (SI C 2895) , an d variou s miscellaneou s chemicals , incl u fatt y acid s an d gelatin
. 

### U.S . Industr y Outloo k Shipment s o f

miscellaneou s chemical s i n curren t dollar * j expecte dt o increas e jus t

ove r 2 percen t

i n 1999 , wit

h acceleratin g t o 3 percen t

annuall y throug h 2003 , essentl n lin e wit h expecte dgrowt

h i n overal l GD P (se e Tabl e 11-7) , projection , however , mask s many divers e trend s tha t ar c i rin g i n individual produc t

markets . Th e leadin g importer s ut l product s fromth e Unite dState s ar e Canad aan dJapan (sc<}! J 11-8) . Include di n thi s category ar e product s rangin g f n cialty chemical s suc h a s adhesive s an d sealant s an d printi n t o commodity chemical s suc h a s carbo n blac k an dfatt y i 

### Adhesive s an d Sealant s Domesti c deman dfor

adhesive s an d sealant s i s proj o gro w i n th e rang e o f

2 t o 3 percen t

annuall y throug h 2(H)

. highe r price s expecte dt o rais e th e annua l growt h i n II * 'At

Hill :

•hi * «lll
.
* « • Wi n to*

11-1 0 U.S
. Industr y & Trad e Outloo k 200 0 

### / jP.1 5

L E 11-7 : Miscellaneou s Chemica l Product s (SI C 289 ) Trend s an d Forecast s On s o f dollar s excep t a s noted ) 

# R •MKr y dat a I H M ihipments 5 |||« 4 ihipment s (1992$ ) Hflfnploymen t (thousands ) HuHlo n worker s (thousands ) H b t hourl y earning s ($ ) ^•(expenditure s •pi t dat a WJK¥ Ihipments 5 BB| ( ihipment s (1992$ ) ___!*" * UmM, Import s •ft l •"ports 199 2 20,51 2 20,51 2 83. 7 48. 2 13.6 3 75 1 19,44 0 19,44 0 1,51 1 2,88 1 199 3

21,85 1 21,48 1 81. 8 47. 0 13.7 6 79 0 20,76 4 20,40 6 1,70 2 3,14 3 199 4

22,50 2 21,42 6 79. 8 46. 7 14.2 7 73 1 20,95 0 19,95 4 1,88 3 3,35 6 199 5

23,83 0 21,66 2 81. 6 47. 7 14.4 2 80 7 22,21 5 20,19 1 2,31 6 3,86 3 199 6

24,50 8 22,19 4 75. 9 45. 0 14.7 2 1,00 6 22,91 8 20,73 4 2,62 5 4,17 7 1997 '

26,00 0 23,10 0

24,30 0 21,57 0 2,86 8 4,73 3 1998 '

26,55 0 23,15 0

24,80 0 21,60 0 2,66 1 4,53 3 1999 2

27,05 0 23,20 0

25,95 0 22,04 0 2000 3

27,60 0 23,27 0

26,47 0 22,48 0 97-9 8

2. 1 0. 2

2. 1 0. 1 -7. 2 -4. 2 Percen t Chang e

98-9 9
1. 9 0. 2

4. 6 2. 0 99-0 0

2. 0 0. 3

2. 0 2. 0 96-00 *

3. 0 1. 2

3. 7 2. 0

H« oxcep t import s an d exports .
un d annua l rate , nitio n o f industr

y versu s product values , se e "Gettin g th e Mos t Ou t o f Outlook 2000." 6
. Departmen t o f Commerce : Burea u of th e Census ; Internationa l Trad e Administration
. i s t o clos e t o 4 percen t

i n tha t period . Th e averag e pric e tht l fo r formulate dadhesive s an dsealant s wil l increas e O f continuin g shift s i n th e produc t mi x tha t favo r highl y itc dsyntheti c adhesives . ||oba l adhesiv e an dsealan t marke t wa s estimate dt o b e *2 2 billio n i n 1998 . Adhesive s accounte dfo r abou t 8 2 i) f the tota l globa l market , with sealant s representin g 1 8 Nort h Americ aaccounte dfor

3 3 percen t

o f th e globa l an d sealan t market , followe db y Europ e with a3 0 per Th e Fa r Eas t accounte dfo r

1 9 percen t

o f th e worl d Iwil h th e res t o f th e worl drepresentin g 1 8 percent . Adhesive s ar e chemical s tha t ar e use dt o attac h o r

bon d togethe r material s suc h a s paper , wood , an dmetal . Als o bond

in g agents , sealant s ar e substance s tha t ar e use dt o fil l gaps betwee n tw o material s an dpreven t th e passag e o f

liquids an d gase s betwee n them . Sealant s hav e th e flexibility t o adjus t t o changin g conditions , suc h a s th e expansio n an dcontractio n tha t occu r with hea t

an dcold , withou t

bein g damaged . Adhesive s an dsealant s ar e produce dfro mblend s o f petroleum-derive d resins , syntheti c rubbe r

elastomers , an drelate dmaterials . Th e larges t

marke t fo r adhesive s i n 199 8 b y volum e wa s convertin g an dpackaging , with a3 4 percen t share , accordin g t o 

## I t 1-8 : U.S . Trad e Pattern s i n Miscellaneou s Chemica l Products 1 i n 199 8 f dollars ; percent )

[*» * i»#po NX) . Economi c Are a
pfeltilo s Export s Value ' 1,28 4 61 2

.' 1,03 4 75 5 49 3 35 5 4,53 3 Valu e 88 8 49 3 39 6 23 4 21 2 Share , % 2 8 1 3 2 3 1 7 1 1 8 10 0 Share , % 2 0 1 1 9 5 5 Import s

Region 2 NAFTA Lati n Americ a Wester n Europ e Japan/Chines e Economi c Are a Othe r Asi a Res t o f worl d Worl d To p Fiv e Countrie s Japa n Canad a German y Franc e Chin a Value 3 56 6 14 0 81 6 81 9 27 4 4 6 2,66 1 Valu e 64 8 43 3 28 9 17 4 14 9 Share , % 2 1 5 3 1 3 1 1 0 2 10 0

. Share , % 2 4 1 6 1 1 7 6 I M o f regiona l groupings , see "Gettin g th e Mos t Ou t o f Outlook 2000." poo l au m t o tota l du e t o rounding
. MXtjmrtmen t of Commerce , Burea u o f th e Census
. Chemical s an d Allie d Product s 11-1 1 

# HDPN A International . Othe r importan t

market s wer e construc tion , 1 7 percent ; pressure-sensitiv e (self-adhesive ) materials , 1 4 percent ; woodworking , 9 percent ; assembly , 7 percent ; an d transportation , 2 percent . Th e balanc e o f shipment s (1 7 percent ) wen t fo r awid e variety o f

othe r uses , includin g laminates , flex

ibl e packaging , disposabl e products , an dconsume r do-it

yoursel f markets . Majo r

applications fo

r adhesive s includ e paperboard , label s an dtapes , containers , plywood , laminates , furniture , graphi c arts , carpeting , an dmoto r vehicles . Advance s i n technolog y hav e increase dadhesiv e us e in th e automotiv e industr y a s ne w adhesive s hav e bee n develope dt o allo w for lighte r an dmor e fuel-efficient

cars . Othe r

technologi

ca l improvement s hav e resulte di n th e developmen t of adhe

sive s tha t ar e les s flammabl e an dproduct s wit h lowe r solven t conten t an dreduce demission s o f volatil e organi c compounds . Th e majo r

beneficiarie s o f

thes e trend s includ e environmentall y compatibl e system s wit

h highe r solid s contents , suc h a s water basedan dho t

mel t (10 0 percen t

solid ) adhesives . Becaus e o f environmenta l concern s abou t thei r toxi c content , th e us e o f solven t adhesive s i s declinin g abou t 2 percen t ayear . Accordin g t o som e industr y observers , adhesive s hav e th e potentia l t o partiall y replac e traditiona l method s o f fastenin g suc h a s rivets , welding , bolting , an dscre w joinin g o f materials . However , i t

i s unlikel y tha t

adhesive s wil l becom e th e dominan t means o f fastenin g material s becaus e o f concern abou t

th e long-ter mreliabilit y o f

adhesiv e bonds . Foreig n trad e doe s no t

play asignifican t

rol e i n th e adhesiv e an dsealan t

industry , principall y becaus e o f prohibitiv e ship

pin g cost s an dth e fac t

tha t mos t o f these'product s ar e base do n readil y availabl e technology . Nonetheless , U.S . producer s hol d aleadershi p positio n i n th e globa l market , particularl y i n higher-margi n product s suc h a s structura l adhesive s an d sealant s use di n mor e advance dapplications . Mos t trad e i n adhesive s an dsealant s traditionall y ha s bee n wit h Canada , althoug h th e enactmen t

o f NAFTA ha s increase dtrad e wit h Mexic o i n recen t

years . Asi ai s anothe r

importan t

market , wit

h export s t o tha t

region expecte dt o sho w goo dgrowth ove r th e 2000-200 4 period , buoye db y alleviatio n o f th e financial an d economi c problem s experience dther e i n 199 8 an d1999 . Th e U.S . adhesiv e industry i s fragmented , with over 500 companie s manufacturin g adhesiv e products . B y contrast , th e sealant s industry i s highl y concentrated , wit h asmal l numbe r

o f firm s accountin g fo r

th e bul k o f industr y sales . Leadin g compa nie s i n th e adhesive s an dsealant s industr y includ e Do w Cornin g ( ajoin t ventur e betwee n Do w Chemica l an dComing) , Nationa l Starc h & Chemical , Imperia l Chemica l Industrie s (Unite dKing

dom) , Henke l (Germany) , Genera l Electric , Bostick , Solutia , Tremc o ( adivisio n o f

RP M Inc.) , Do w Chemical , Roh m& Haas , Reichhol dChemical , an dEl f Atoche m(France) . Consolidatio n activity i n thi s industry ha s increase di n recen t year s a s companie s hav e joine dtogethe r t o broade n produc t line s an dachiev e operatin g synergie s i n orde r t o com pet e mor e effectivel y i n an increasingl y competitiv e mar ketplace . Th e nee dt o reduc e cost s throug h merger s an d restructurin g als o ha s resulte dfro mspiralin g cost s for regula

tory complianc e i n th e Unite dState s an dabroad. Th e mos t recen t larg e merge r

in thi s industr

y wa s Roh m& Haas' s billio n purchas e o f

Morto n Sal t

i n earl y 1999 . Rohm' s maim l men t sai dthat

th e merge r

shoul denabl e th e compan y J increas e it s to p lin e growth fro mit s presen t rang e o f 4 t o 5 1 cen t rang e t o betwee n 6 an d8 percen t beginnin g i n 200 1 allo w fo r areductio n o f

$30 0 millio n i

n annua l operatin g on Explosive s Th e explosive s marke t

i s drive n by underlyin g deman dcomlii H in principal global energy , bas e metal , an dconstructio n mail Th e coa l an dmeta

l minin g industrie s accoun t fo r roughl y i third s o f th e total market . Whil e deman dfro mth e coal ani

l i n minin g industrie s depend s o n global economi c trends , con»U | tio n activit

y varie s significantl y b

y geographi c region . Overal l deman dfo

r explosives , includin g pyrotechnic * explosiv e accessorie s an dassemblies , i s expecte dt o incrcuf j arat e o f slightl y ove r

2 percen t

annuall y throug h 2004 . growth wil l trai l th e highe r rate s experience ddurin g th e an dmiddl e 1990 s becaus e o f adeclin e in minin g activit y (n j cause db y lowe r

price s for

many metals ) an ddeceleratin g structio n expenditures . Thes e market s accoun t for nearl y I third s o f worldwid e explosive s consumption . Geographically , th e larges t explosive s marke t

i s th e American market , whic h i s dominate db y coa l an dmolii U ing , quarrying , an dconstruction . Constructio n represen t principa l growt

h are ai n western Europ e a s minin g activity ] tinue s t o declin e in that

region . Constructio n als o drive * | Asian markets , althoug h minin g play s asignifican t rol e in j tralia . Coal an diro n ore accoun t for clos e t o one-fift

h o. J tralia' s exports . Sout

h Americ ai s anothe r

growin g n

w booste db y risin g ope n pi t coal an dmetal s minin g acilv j many countries . Althoug h th e Unite dState s i s th e larges t consume r

^^(^ sive s worldwide , th e marke t i s becomin g increasingl y glut . Th e greates t

opportunitie s fo

r producer s o f

explosive s ai . | expandin g minin g an dconstructio n industrie s o f southe d Lati n Americ a(e.g. , Argentina , Peru , an dBolivia) , an dAm ) Man y U.S . producer s therefore ar e pursuin g growt h II I exports . Explosive s export s ar e expecte dt o outpac e ini|K . nificantl y in th e foreseeabl e future . Beside s direc t cx|iotJ j ness , many U.S . explosive s firms ar e enterin g inter n market s throug h direc t

investmen t

i n local industries , jolf

l ufacturin g ventures , an dtechnologica l licensin g agreei m Currentl y representin g arelativel y smal l par t of ih e j market , pyrotechnics , o r consume r

explosives , repn

j rapidl y growin g market . Growth i s bein g drive n b y if i us e o f fireworks in holida y celebrations , stag e prodm.ii( | amusemen t

park displays . Stron g deman dals o i s com|( j th e automotiv e market , whic h use s explosiv e igniior s pellant s i n ai r

ba g systems . Leadin g explosive s maim, includ e Austi n Powder , Dyn o Nobe l (Sweden) , Exploul] nologie s International , an dLS B Industries . Printin g Ink s Value da t abou t $1 2 billion , th e globa l printin g in k m expecte dt o expan dat

arat e o f abou t 2 percen t annually | 11-1 2 U.S . Industr y & Trad e Outloo k 200 0P.1 7

I

- Modes t growth i s projecte di n th e key commercia l print

J packagin g markets , helpe db y improve ddeman dfor ink s an dothe r

higher-price dformulations . Ink s use di n a-ia l printin g an dpackaging , suc h a s newspapers , peri

- |f(t . nn d books , represen t

th e larges t

segmen t o f th e printin g |Mirkct , wit

h miscellaneou s application s suc h a s busines s mi d greetin g card s accountin g fo r th e balance . Ink-je t K ink s ar e th e mos t

rapidl y growin g in k

type , with bein g drive n b y greate r

us e o f persona l an dcommercia l printin g equipment

i n th e deskto p printin g industry an d lopmen t o f ne w substrate s an dnich e markets . Althoug h jfoclo r t o som e extent , th e switc h fro msolvent-base dinks minentall y attractiv e alternative s (vegetabl e oil-base d A ) i n applicabl e market s ha s bee n complete dfo r th e 

## H* rt 

## - wiltin g abou t

one-thir do f

th e tota l globa l market , th e tillin g in k busines s i s expecte dt o sho w very littl e growt h comin g years , reflectin g th e maturity o f it s basi c mar ever , bette r

gain s ar e projecte dfo r

emergin g oversea s c.pcciall y i n man y Asian an dSout h America n counllfcdcinan d for

commercia l printin g an dpackagin g rise s win g standard s o f

living . Th e Unite dState s shoul d il * |X)sitio n a s anet

exporte r o f printin g ink s i n th e 'yours , wit

h th e trad e surplu s widenin g a s U.S.-base d I S cupan d thei r

multinationa l presence , iplmliisir y als o ha s witnesse dconsiderabl e consolidatio n yciirs a s ke

y player s hav e sough t

merger s t o bette r

dea l an t market s an ddeclinin g in k prices . Tw o leadin g Dainippo n In k

& Chemica l an dFlin t

Ink—hav e iHijt h acquisition s o f

smalle r in k companie s i n recen t 

### •lac k curbo n blac k

i n th e Unite dState s i s expecte dt o <m i 2. 5 percen t

annuall y throug h 2004 , essentiall y vi h i n rubbe r tir e production , it s principa l en dmar lire s accoun t

fo r mor e tha n 9 0 percen t

o f tota l

. carbo n black . Carbo n blac k i s use da s areinforce- •Ijt'Unize d rubbe r products , sinc e i t

ha s th e ability t o Iffllustomer' s tear , abrasion , an dfle x resistance . A ||ubstance , carbo n blac k

i s derive dfro mpetroleu m i|(llstillatio n o f

coa l tars , an dethylene . deman dgrowth i s forecas t i n th e tire industry , • the increase dpopularity o f performanc e tire s an d litm s o f carbo n blac k

with propertie s tha t

reduc e fformanc e tire s requir e highe r carbo n blac k

load

- |^()itipound s compare dwit h all-seaso n radials . Per

i l filso hav e shorte r

servic e lives , an ds o tiiey ar e i often . In addition , th e popularit y o f sport utilit y |j\ill-si/. e picku p truck s ha s increase ddeman dfor

. n bot h origina l equipment

manufacturer s (OEM ) l\ l markets . ihe r tires , carbo n blac k

i s use dwidel y i n indus

KtHluct s suc h a s hoses , belts , an dmechanica l im, deman d for

carbo n blac k

i n nontir e industria l iM * wil l h e restricte db y th e increase dus e o f ther

moplasti c elastomers , som e type s o f whic h d o no t

requir e car bo n blac k whil e other s requir e muc h les s carbo n blac k tha n d o conventiona l rubbe r

parts . Accountin g for

les s tha n 1 0 percen t

o f th e market , nonrubbe r applications , calle dspecia l blacks , ar e als o important , particu

larl y fro mavalu e standpoint , sinc e thes e specialize dgrade s comman dsignificantl y highe r price s than d o commodit y rubbe r blacks . In additio n t o highe r margins , astron g positio n i n spe cia l black s offer s supplier s greate r protectio n agains t

cyclica l swing s i n th e rubbe r

an dmoto r

vehicl e industries . Th e primar y nonrubbe r

us e fo r carbo n blac k

i s a s apigmen t i n plastics , paint s an dcoatings , an dprintin g inks . Whil e growth in th e domesti c marke t

i s expecte dt o remai n relativel y modest , stron g gain s ar e indicate di n many foreig n regions . Th e Asia

Pacifi c regio n wil l continu e t o hav e th e bigges t growth market s fo r carbo n black , mainl y becaus e o f th e ongoin g developmen t o f China' s tire industry . Lati n Americ aals o offer s soli doppor tunities , particularl y i n Brazil ; i n easter n Europe , th e stronges t prospect s ar e i n th e Czec h Republic , Hungary , an dPoland . Herman Saftlas, Standar d& Poor' s Corporation , (212 ) 438

- 9542 , Novembe r

1999 . 

### DRUG S AN D PHARMACEUTICAL S Th e drug s an d pharmaceutical s secto r(SI C 283 ) ha s fou rpri mar y components : medicinal s an d botanical s (SI C 2833) , pharmaceutica l preparation s (SI C 2834) , diagnosti c sub stance s (SI C 2835) , an d biologica l product s (SI C 2836)
. Med icina l an d botanica l establishment s (SI C 2833 ) ar e engage d primaril y i n manufacturin g bul k organi c an d inorgani c med icina l chemical s an d thei rderivative s an d i n processin g bul k botanica l drug s an d herbs
. Pharmaceutica l preparation s (SI C 2834 ) includ e thos e produce d b y establishment s engage d primaril y i n manufacturing , fabricating , an d pro cessin g medicina l substance s int o finishe d pharmaceutical s fo rhuma n an d veterinar y use . Ethica l brand-nam e drugs , generi c products , an d nonprescriptio n o rover-the-counte r medication s constitut e th e pharmaceutica l preparation s subsector
. Th e diagnosti c substance s subsecto r(SI C 2835 ) include s product s fro m companie s tha t mak e chemical , bio logical , o rradioactiv e substance s fo rtestin g bloo d an d othe r bodil y fluid s an d tissues
. Thes e substance s ma y b e use d fo r i n vitr o (tes t tube ) o ri n viv o (administere d i n th e body ) test ing
. Biological s establishment s (SI C 2836 ) ar e engage d pri maril y i n th e productio n o f bacteria l an d vira l vaccines , toxoids , an d analogou s product s (suc h a s allergi c extracts , serums , plasmas , an d othe rbloo d derivatives ) fo rhuma n an d veterinar y use . 

### Globa l Industr y Trend s Th e globa l pharmaceutica l marke t continue s it s patter n o f

soli d growth , with consisten t

increase s i n sale s expecte dove r th e nex t 5 years . Growth i n th e worl dpharmaceutica l marke t increase dfrom6. 6 percen t i n 199 7 t o 7 percen t

i n 1998 . Com

bine dworldwid e sale s o f prescriptio n an dover-the-counte r medication s ar e estimate dat ove r $30 0 billion . Th e marke t i s Chemical s an d Allie d Product s 11-1 3 

### /&P.1 8



### fo r ne w prescriptio n drug s an

dmedica l devices . FDA' s user-fe

e progra mha s bee n extended , an

dth e revie w proces s fo

r ne w drug s ha s been expedited . Unde r th e 199 7 law , seriousl

y ill patient s have easie

r acces s t o experientia

l compound s an

dne w incentive s fo

r the developmen

t o f pediatri c medicine s ar

e pro vided . The FD

A ha s cooperatedb

y liberalizing regulator

y requirement s o

n DT C ads . The 199.

7 legislation i s expectedt

o continu e to aidindustr

y growt h ove r the nex t 5 years . Internationa l Competitivenes s Highl y innovative an

dtechnologicall

y advanced , the U.S . phar

maceutica l industr y hla s consistentl

y maintainedacompetitive edg e in : internationa

l markets . I

n 1997 , Nort

h Americ a accountedfo

r 34. 5 percen

t o f the globa l pharmaceutica

l market , Europe , 29. 0 percent ; Japan , 15. 9 percent ; Lati n America , 7. 7 percent ; southeas t

Asi aandChina , 7. 3 percent ; ari dall othe r regions, . 5. 6 percen t

Thi s geographic .breakdow n i s not expectedt o chang e muc

h ove r the nex t 5 years . Th e introductio n o

f ne w product s i s the primar

y force i n th e U.S . pharmaceutica

l industry' s overal

l growt h an dcompetitive

ness . Th e UnitedState s lead s th e worl di n ne w drug discoverie s an dR& D expenditures . Research-basedpharmaceutica l companie s invested$1 8 billio n i n R& D i n 199 8 an dwer e expected to invest 1 

### $2

4 billio n i n 1999 . Pharmaceutica

l manufacturers inves t ahighe r percentage.o f

sale s revenues i

n R& D tha n doe s anyothe r industry . Innovativ e pharmaceutical s provid e som e o f th e mos t effectiv e an d cost-efficien

t mean s t o treat - patients . U.S . R&D-base

dpharmaceutica

l companie s have a

n excellen t reputatio n throughou

t the.world ; Wit

h di e world' s rising stan dar do f living anddi e increasin g us e o f innovative drug s a s a way t o slow th e rise i

n healt h car e costs , U.S . pharmaceutica l export s ar e expected tocoritinu e to do.well . ;» . ? *

.. ; \I n 1998 ; th e pharmaceutica

l industr y in th e UnitedState s wa

s expectedto expor

t medicine s wort

h mor e tha n $11. 9 billion (see TABLE ; 11.16 : 

### Tabl e 11-10) . Betwee

n 199 7 an d1998 , exports fro

mthe State s increased15. 1 percent . U.S . dru g maker s o n a ' mak e clos e t o 3 5 percen

t o f thei r sale s abroad . Som

e o f th e l i in g pharmaceutica

l customers fo

r th e Unite dState s ar e C th e Netherlands , Germany , Japan , an dUnite dKingdom . Althoug h U.S . export s continue t

o be strong , pharmaceu

j imports int

o the UnitedState s ar

e increasing faste

r th i exports . Th

e UnitedState s importe

dmor e tha n $17. 8 b l wort h o f pharmaceutical s i

n 199 8 (see Tabl

e 11-10) . Thi s j 25. 7 percen

t increas e ove

r th e 199 7 level . Som

e o f the J i pharmaceutica

l supplier s t

o the Unite dState s ar e Germany ] land , the UnitedKingdom , Japan , an dSwitzerland . T h bee n arapidl y growin g defici t i n U.S . pharmaceutical^ sinc e 1997 . Possibl e reason s fo r the increas e i

n phafmace

i imports includ

e di e numbe

r o f companie s relocatin g re an dmanufacturin

g operation s outsid

e the UnitedStates,, ] nationa l mergers , an

dincrease dsale s b

y Europea n Union ; producer s i

n di e UnitedStates . Tw

o factor s als o couldc

n appearanc e o

f rapi dimpor

t growth : arecent

change ! methodolog

y usedb y U.S . firms t

o se t transfe r price s fror subsidiarie s an

da n increas e i

n th e us e o f foreig n trade manufactur

e duty-free finishe

dpharmaceutica

l products ! dutiable , importedintermediate s an dra w material s Othe r concern s threatening th

e competitivenes s o

f t h pharmaceutica

l industr y i n di e internationa

l aren aare ; quat e protectio n fo

r patents , trademarks , trad

e secrets , ari

l pric e restraints ; an

dbarrier s t

o marke t access : Ph

a intellectua l propert y i s threatene di

n man y countrie s o f pharmaceutica

l intellectua

l propert y provide s an' ince

i continu e R&

D investmen

t and;i s importan

t fo r diel'cd B internationa

l competitivenes s o

f di e U.S . industry . The ceutica l industr y object s topric e controls , which'i t denying recover

y o f R& D cost s an dafai r profit, " thus;i ing th e innovation an

dviabilit y o f U.S . firms . Non

i >'zof l



### tpercej j

U.S . Trad e Pattern s i n Drugs 1 i n 199 8 "MlA l (millions.o f dollars ; percent ) „ US_* . -to-idiAW r •:, iM:?. -^i^ur r v « jr* ! Export s -;'i3Wi-3"nt.r;f.'.,TJ'.> ! '. ; ° ! '••'•• • ?iry.-r?>r-. •

' sjf i .-.;;! ? -jrh^k-. Region'..j,.,.,...,".,. . , t ' . ..Value 3 ._.'» . N.AIfrf.i ? . i .. c ,.^.!,,,,.,,,. , •.•;..-. . - . ,w-..,1,89 2 . Lati n America , . 792 . Wester n Europ e v- Ii! - •• '-*'' • T , '. . 6,835 ' Japan/Chines e Economi c Are a . . 1,37 6 Othe r Asi a -^, r i

_ , . _..... . • . 313, . Res t o f worl d 73 5 World ' «-*i<^ ' •'•

' •'••" • ..••-••-•. . t.- . . " n;944 ' _"M V ..-.n'cyr.'/.-•-. li b;.u , :- : •.• " • .••. : •

x:.-;.:. ->.; ; To p Fiv e Countrie s y .-.j;-; ^ •,.?£•

;.-,,,_. . •

; .Valu e . ; • Canada'-/. ' .•<...•:.;:• • •*.<;;.;••:':••••!' --O: . :-v- v ' ;1,61 4 '•-

• • Netherlands„. , _..

- ..,...,.'.,.,., | ; ..- r;s .. . 1,29 2 German y . . '*.". . 1.12 1 liipan ' -_ : J *J•..-',u , .•-, . ,:.:•..!.,•,. " -\lojy: Unite d Kingdo m •;..; » .825 : = ;i ' ' - '-.P.- • '•

= v ' ••• - V :: • • »

. r-< ' .I'i . H 1 " . "

. Share , %

, -. . , 1 6 ,. . 7 57 ' 1 2 ;• . . • .,- 3 6 •10 0 '
-, ; ,.;, .Share , % ; . : V14' H •*.•• ••.1. 1 "

9
" - - •

"'"9 ' • ;: i '•••.. • V 7 -. . i-j,l<
. '•••• , ' ' 1 .•; > . :'', \/'\

'
. ,'•

r.:>> Region 3 NAFT A ., , -, , . Lati n Americ a Wester n Europ e Japan/Chines e Economi c Are a Othe r Asi a Res t o f worl d , Worl d ' " •

. • /. • i..\;-. - - •••••<• .-•- . To p Fiv e Countrie s > , Y • , German y ' ' Ireland ( ,- , «.j . . Unite d Kingdo m Japan ' ' Switzerlan d ' ; Imports ' Value 1 ,

.81 1 . 7 0 . ' "•" • -14,40 7

1,76 6 426. " 36 8 17,84 7

- . M .,; . Valu e ;-

.
' " • '- i 3,54 8

, 3,22 7 3,01 5 1,44 5 ' 1,22 3 • ••I , ^ 

### " ^HJjffl j ' '*'*• « 1 < i .' ^ w n >" < '•'. ' v H

. liM l

• Y l l iM

'' ' '•"•''^m 

### ><,r4at § /;'f*W(B I •.MiiUs H 

# •,^J |

• *'•'•< WK^B I .SIC283;, n , • )t : ..., A y.- ,,,>, , ,. l , » u ,,•...-,.•;,.(.;•! . _.., - , „ . r > . . . ; ,. : ; . 2 Fo r definition s o

f regiona l groupings , se

e "Gettin g th e Mos

t Ou t o f Outlook

2000." 3 Value s ma y no t su m t o tbtafdu e t o rounding . Source : U.S . Departmen t o f Commerce , Bureau o

f th e Census . 

### M 

# I . ••m 11-1 6 U.S . Industr y & Trad e Outloo k

200 0 

# 16?.P.1 9



### Hidin g to industr

y estimates , hav

e cos t U.S . pharmaceu

panie s a s muc

h a s $ 9 billion.- . •

F > ' • " . .>••• • r'.' . •••': ' . • •' " .,;. " 

### §! #U.S . Departmen

t o f Commerce , Chemicals ; Pharma

- *\? an dBiotechnology Division , (202 ) 482-5125 , lr;1999 . ; -.

r •.' • • £1 0 MATERIAL S AN D RESIN S jtti c material s and.resin s industr y (SI C 2821 ) include s Ijshment s engage d primaril y in.manufacturin g syn B^resins,,plastic s materials , an d nonvulcanizabl e elas 

### ire.,', ' '"'

__''.''

_'\'' ' an d Domesti c Subsecto rOutloo k idustr y Trends; . rTh

e plastics , industr

y ha s move

d EWorl d as . i t ha s pursuedbusines s opportunitie s i n gphigh-grbwt

h markets an

d a s supplier s have , followe d |thos e companie s < have expandedproduction . Th e stie s industr

y i s dominatedb

y larg e multinationa

l [^companie s tha t ar e verticall y integrated . Although the 5.expanding'.globally

i i t ha s undergone , considerabl e ion* ari d restructuring-in.;recent

year s a s aresult

o f sitions , th e formatio

n o f join t ventures , andthe ^obsolete.facilities ; Tha

t trend i s likel

y to continu e ^di e level o

f competition amon

g producer s and th e Dst-cuttin g 5 measures.Despit e thi s trendtowar d tion,- i tota l plastic s production remain s fragmente d y^th e numbe r ofresin s produce

dan d th e diversit

y o f ii f served . Production o

f larger-volum

e commodit

y s:polyethylen

e an dpolypropylene tends.to b e les s .tiia n tha t of smaller , specialty-typ e products . I n ||tpp : 

### fou r resin sectors—polyediylene , polypropyl

l polystyrene—fewe

r tha n five player s hav e sig

- .positions.; ; . H 

### ith e plastic s industr

y i s globalrth e bas e o

f produc

- /'commodityresin s has shifte dto countrie s suc

h a s (•China, , andSout

h Korea./ Producers. ? i n ;highl

y ^SrkeiS.'suchTasdi e Umt^'States^weste mEiurope , Ijav e respondedto .these shifts , i n productio n b y [*;th e .manufactur

e o f : 

### sp^iit y jjnd-,lMgher-yaiue

- •and-b y rationalizing their/productio n capacit y jfitebility . Suc

h action s not

onl y capitaliz e oh ; th e |advantag e ? 

### p f

develope d> , countrie s -i

n highl y friction technologie s an

dresearch bu

t als o lessen j?prbfitability(!O

f swing s in level s o

f resin produc

gPMemandv'^ ' ! 

### -u-,"/,^

- 'K ' ••: • "•> .3.

- st8 r th e globa l plastic s industr

y include th e Chi

l e Ai&a , Japan , Nort

h America , Sout

h America , • r and'wester

h Europe . Becaus e o

f their siz e and Miii c development , i t

i s no surpris e tha

t Japan , Hf-'an d wester n Europ e ar

e th e larges t

regional Aplasti c resin, accountin

g fo r som e 9 0 percen

t o f • consumption . Althoug

h ther e i s certainl

y opporlipansio n i n thos e regions , as epitomize db y Canada an

dMexico , thos e markets ar

e i n larg e par t established , wit

h a mor e limite dopportunit

y fo r growth . Despit

e the economic dif

ficultie s in.Asi aan

dSout h Americ arecently , thos e region s remai n th e primar y areas : o f significan t growt h opportunit

y i n bot h the shor t ter man dth e lon g term . Researc h i n the plastic s industr

y ha s focuse

d o n the develop

men t o f ne w production processe s instea do f entirel y ne w plas

ti c materials..Fo r

example , th e development,o f metallocene catalys t technology was expectedt

o pla y ake y rol e i n di e olefi n secto r throug h th e endo

f the century . Th e productio n o f metal

locene-catalyzed thermoplastic s ha s bee n growin g rapidl y botii in the UnitedState s an

dworldwide , yet

i t account s fo

r onl y a mino r proportion o

f tota l resin production . A s technica l diffi

cultie s ar e resolve dandprice s fall , thi s technology i s expected t o gai n greate r importanc e i

n the globa

l marketplace . Othe

r research efforts ar e aimeda t expanding application s fo

r plastic s an d improving;die.performanc e propertie s o f existing resin s throug h alloying an

d blending. . - Domesti c Industr y Trends . Factor s affectin g growt h in the U.S . plastic s industr

y includ e trend s i n ke y end-us e markets suc h a s packaging , building andconstruction , consumer , and institutiona l products , an

d transportation . Thos e markets in tur n ar e affecte db y trend s i n consume r spending , GDP, and popula

tion growth , Other : issue s tha t influenc e th e industry' s outloo k includ e di e cos t an davailabilit

y o f ra w materials , foreign.com

petition, . technologica

l advancements , an

dintermateria

l an d alternative materia

l competition; . , M 

### . Noteworth y trend s specific to th e U.S . plastics,industr y includ e eonsOlidation,an

d restructurin g o

f di e industry , compe tition, among ; alternativ e .plasti c materials , an d th e emergenc e o f electronic::,commerce,^(ETCommerce ) a s a,busines s tool . Depresse doi l an dresin price s an

dovercapacit

y in resin suppl

y hav e prompted anumbe

r o f mergers , acquisitions , an

djoin t ventures , wit

h the,mos t

notabl e in 199 9 : 

### being . the merge r announce dby the Do

w Chemica

l Compan y an dth e Union Car

-

. bid e Corporation,:Th

e sam e pressures , along wit

h consolidation amon g OEMs , have playedarol e in th e increase dleve l o f inter

matenajrcpmpetitio^fiace d by . plastics . Suc h competition i s ocevrrringacros s di e spectru mof'end-us e market s a s commod

it y material s tha

t ar e enhancedthrough alloying an dblending : vi e wltii;specialt

£ resins for

mafke t share . Las t

but certainlyn<6

t least ' i s the adven

t o f E-cpmmetc e in th e busines s operation s o f the U.S . plastic s industry . Mos t U.S . resi n producer s rhav

e a ~ We b site , wit h some ; tympanie s offerin

g mor e comprehensive service s suc

h a s on-line sales , shipping andinventor y informa

tion,, an dtechnica l assistance . Th e Internet

providesIthes e coih

paniesjjyit h alpwncos t

time-sensitiv e mean s o

f communicating product information to current

an dpotentia

l customers. . I

n turn , >th e read y avadabilityfofdnfonnation on-lin e ha s helpedreduce di e tim e frame fo r custome r decisio n making . - Industr y an d Trad e Projection s fo rth e Nex t 1 an d 5 Year s Shipmen t Projections . Constan

t dolla r shipment s o

f plasti c material s an

dresin s ar e < forecas t

to increas e onl

y 3 percen t i n Chemical s an d Allie d Product s 11-1 7 

# lOP.2 0

expecte dt o experienc e annua l compoun dgrowth o f 8 t o 1 0 per cen t in th e nex t

5 years . Stron g growth i n North American mar ket s an dth e recovery in Japa n helpe ddriv e th e globa l pharmaceutica l marke t

upwar di n 1998 . Th e Unite dState s remain s th e larges t

pharmaceutica l marke t

i n th e world , fol

lowe db y Europ e an dJapan . Globa l growt h in th e consumptio n o f pharmaceutica l product s i s likel y t o b e sustaine db y stron g demographi c gain s wid i record-settin g lif e expectancies , aris

in g standar do f

livin g i n developin g countries , an dastead y strea mo f ne w product s an dlin e extensions , includin g di e ne w frontie r o f quality-of-lif

e pharmacology . Demographic s ar e expecte dt o provid e astron g marke t an d hig h deman dfo r

pharmaceutical s fo r

th e foreseeabl e future . Th e Worl dHealth Organizatio n (WHO ) report s that th e globa l over-6 5 populatio n i s forecas t t o rise fro m38 0 millio n i n 199 7 t o mor e tha n 69 0 millio n b y 2025 . Th e elderl y ar e th e singl e larges t grou p o f user s o f prescriptio n drugs . Th e over-6 5 popu latio n consume s thre e times a s many pharmaceutica l medicine s a s younge r

patient s do . A s government s aroun dth e worl dcon side r variou s way s t o tackl e th e problem s o f rising health car e cost s fo r th e elderly , pharmaceutical s ar e emergin g a s an effi

cien t an dcost-effectiv e wa

y t o addres s thi s problem . Pharma

ceutical s provid e health car e saving s b y shortenin g hospita l stays , reducin g nursin g hom e admissions , lessenin g doctors ' visits , an di n som e case s eliminatin g di e nee dfo r surgery . I n th e las t decade , pharmaceutica l companie s hav e brough t t o marke t mor e than 15 0 ne w medicine s for diseas e o f

aging . Pharmaceu

tical compan y researcher s ar e workin g o n mor e than 600 ne w medicine s t o tackl e th e majo r cause s o f

disabilit y amon g seniors . Risin g standard s o f

livin g throughou t

th e worl dar e expecte dt o bolste r

th e deman dfo r

bette r healt h car e an d increas e sale s o f

medica l products . Health i n developin g coun trie s i s improvin g a s aresul t o f arisin g globa l econom y an dth e ne w interactio n betwee n science , publi c healtii , an dbusiness . A s issue s o f

trad e an dhealt h continu e t o intersect , i t i s inevitabl e tha t

di e pharmaceutica l industr y an dth e WH O ar e increasin g thei r

interaction . Th e WH O an dth e pharmaceutica l industr y continu e t o searc h fo r way s t o reduc e barrier s t o th e globa l availabilit y o f

medicine . Pharmaceutical s ar e th e first lin e o f medica l therap y worldwide . Th e globa l pharmaceutica l industr y ha s th e abilit y t o develo p product s t o fight infectiou s disease s whereve r

the y occur . Th e challenge s ar e availability , affordability , an deffectiveness . Th e introductio n o f

ne w product s i s expecte dt o accelerat e th e growth o f

th e globa l pharmaceutica l industry i n di e year s ahead . Th e leadin g research-base dpharmaceutica l companie s indicat e tha t

ther e ar e at

leas t 2 9 compound s i n di e globa l pipelin e witi i "blockbuster " potential . Innovativ e product s hav e replace dpric e a s th e leadin g facto r drivin g th e industry . Highe r sale s ar e bein g achieve d diroug h simultaneou s multicountr y launche s O

f ne w products , improve dsale s forc e productivity , an ddirect-to-consume r

advertising . Advance s i n biomedica l scienc e hav e give n ris e t o ne w processe s that ar e expecte dt o assis t scientist s i n developin g an ddiscoverin g ne w pharmaceutica l compound s at

eve n faste r

rates . Ove r

th e nex t fe w years , i t i s expecte dthat pharmaceutica l companie s wil l introdmo whol e rang e o f

new compound s tha

t no t onl y wil l cur e disc u but als o wil l slo w th e ravage s o f age . Eve n wit

h advance * i researc h an ddevelopmen t (R&D ) an dth e continue dinirntl n tio n o f new pharmaceuticals , ther e i s a n urgen t nee dfo r i * an dbette r medicines . Accordin g t o WHO , ther e i s stil l n o .4 quat e therap y fo

r three-quarter s o f

th e 2,50 0 currentl y iv . < j nize dmedical conditions . Th e globa l pharmaceutica l industr y show s n o siyn v I slowin g it s worldwid e consolidatio n activity . Companie s |* ( resource s t o compet e mor e effectivel y an dfinanc e th e CMMI I in g cos t o f expande dR&D . Merger s ar e especiall y pr.v. i i n companie s whos e principa l drug s hav e los t o r ar e abou t los e paten t

protection . Othe r

likel y candidate s for

merga > firms whos e R& D pipeline s ar e spars e o r whos e produc t

• sis t largel y o f

drug s tha t

ca n b e produce db y othe r comp.- m Foreig n dru g manufacturer s continu e t o ey e U.S . fir m potentia l candidate s fo r

acquisition . I

n th e earl y 1990s , i

n er s wer e drive n primaril y b y adesir e t o cut costs . I n iln

1990s , R& D opportunitie s appeare dt o b e th e drivin g l<•• • Th e pres s i s filledwit h report s o f abattl e betwee n thre e Ir . in g U.S . research-base dpharmaceutica l companie s i n whic h tw o wil l merg e t o becom e th e world' s larges t plu m ceutica l company . U.S . Industr y Growt h Projection s fo r th e Noif J 1 an d 5 Year s Th e U.S . pharmaceutica l industry i s divide dint o thiv . ments : th e research-base dbrande dpharmaceutica l indusii v generi c pharmaceutica l industry , an dth e nonpFescripiimi j over-the-counte r

industry . Research-base dpharmaci-m * companie s inven t

prescriptio n drug s tha t

can b e sol donl

> » adoctor' s prescription . Generi c form s o f prescriptio n drn p mad e availabl e onc e th e innovator' s paten t expires , (i.m ^ drugs , lik e prescriptio n drugs , can b e obtaine donl y wit h . i < tor' s prescription . Over-the-counte r pharmaceutical s an

- • product s that

consumer s ca n obtai n an dus e o n thei r ow n m tive . Al l thre e segment s ar e predicte dt o hav e apositiv e p> rat e fo r th e nex t year , an dth e momentu mi s expecte dt < > tinu e ove r

th e nex t 5 years . Ne w dru g discoveries , iiu-u-«| | interes t i n health , demographi c trends , manage dhealih an damor e industry-friendl y regulatory environmen t ha w < bine dt o support

th e sustaine dgrowth o f

th e industry . Tin

- mij | ina l valu e o f

industry shipment s for

th e U.S . dru g secto r I<-I « $107. 7 billio n in 1998 , a13. 1 percen t increas e ove r

19'/ / ment s (se e Tabl e 11-9) . Th e U.S . industry appear s t o b e o n di e verg e o f amai* « cycle , wit h anumbe r

o f potentia l blockbuste r

product . •

» pipelin e tiiat

shoul densur e continue dindustr y growt h i . leas t th e nex t 5 years . T o satisf

y th e increase ddeman dl m products , especiall y amon g di e elderly , U.S . companie s M intensifie dthei r

effort s t o creat e unique , "breakthrough " U M peuti c compounds . Example s o f ne w product s ar e moiv *-<t tiv e cance r

drugs , proteas e inhibitor s t o trea t AID S |':n» i ora l diabete s therapy , cholesterol reducers , ne w treatim-m i arthritis , an dimpotenc e treatments . Increase ddeman dI . 11-1 4 U.S . Industr y & Trad e Outloo k 200 0 

# nP.2 1

L. E 11-9 : Drug s (SI C 283 ) Trend s an d Forecast s gin s o f dollar s excep t a

s noted ) - . Bf } • . • •tr y data "' K t shipments ' fof shipment s (1992$ ) amploymen t (thousands

) •Httb h worker s (thousands).
. Bghourl y earning s ($) ' Kfxpenditure s . Npat a • •-'•

' Epghipments 5

- nKShipment s (1992$ ) 

# Eip ort s 

# .. . ntfkports ' ___•§¥;

__ ._;.,. . , - i 199 2 67,79 2 67,79 2 :19 4 92. 7 14.7 8 3,88 7 60,79 3 60,79 3 5,98 0 6,76 5 199 3

70,98 5 68,17 9 20 0 94. 6 15.8 0 4,04 7 63,97 0 61,42 8 6,06 3 7,21 4 199 4

75,80 4 71,14 2 20 5 10 2 16.3 4 : 4,03 4 67,75 1 63,58 8 6,90 5 7,56 1 199 5

80,90 7 73,82 0 21 6 11 3 15.9 9 4,50 3 71,52 8 65,28 5 8,50 4 7,99 2 199 6

86,53 2 76,82 4 21 3 10 6 16.6 3 4,30 1 76,29 3 67,75 4 11,09 0 8,88 4 1997 '

95,21 9 82,95 2

83,95 2 73,15 9 1.4,11 0 10,36 8 1998 '

107,69 2 85,25 1

94,94 9 75,18 6 17,84 7 11,94 4 1999 2 112,81 5 86,67 3

99,46 6 76,44 0 23,30 8 13,61 6 2000 3

121,94 7

. 91,48 8

107,51 7 80,68 7 27,96 9 14,70 5 97-9 8

13. 1 2. 8

13. 1 2. 8 26. 5 15. 2 Percen t Chang e 98-9 9
4. 8

. 1. 7

4. 8 1. 7 30. 6 14. 0 99-0 0

8. 1 5. 6

8. 1 5. 6 20. 0 8. 0 96-00 4

9. 0 4. 5

9. 0 4. 5 26. 0 13. 4 fexcep t import s an d exports .

n d annua l rate . fjnltio n o f industr y versu s produc t values , se e "Gettin g th e Mos t Ou t o f Outlook 2000." S . Departmen t o f Commerce : Burea u o f th e Census ; International Trad e Administration . 

### fha s replace dpric e a s th e primar y forc e i n th e U.S . lltica l industry's.overal l growth . S|United States , consume

r interes t in healt h matter s flt^a n alL-tim e high. i Peopl e sa

y the y follo w health

- •ie s in th e -medi a'more tha

n the y follo w an y othe r .industr y i s capitalizin g o n thi s interes t b y increas

- |torConsumer . (DTG

) advertising . Onc e considered JCiadvertisin g i s becomin g amajo r marketin g forc e i n aceutica l industr y an di s likel y to b e ake

y drive r stry' s futur

e growth . In 1998 , the industr y spen t I o n DT C advertising , a3 8 percen t increas e ove

r di e ispenti n 1997 . Increase dDT C advertising i s lead

taf consume r recognitio n of

th e benefits o

f pharma

TOpie^and w 

### inCTeasing consumers ' confidence i n Id i matter s witi i tiieir

doctor s an dasking fo r spe ions:"

- "---' ^ ; . • -is-liftin g pharmaceutica

l sale s i n the tJnite d singifh e us e of

pharmaceutical s a s aviabl e Ipithe r treatment forms , an ddii s trendshouldcon fnex t 5kyears . Healt

h maintenanc e organization s iferre d provider organizations , an

dothe r managed Kefgrow n rapidl y i n recen

t years . I n th e 1980s , jj|?shar e o f

th e retai l pharmaceutica

l marke t was gentr y th e yea

r 2000 , tha t shar e i s (expecte

dt o |Hbwever,.th e experimen

t wid i HMO s ha s show

n rilpebpl e d o no t

lik e th e ide ao

f rationing healt

h lhayejincrease d tha

t HMO s put

financial! con l:o f patients ' needs . I n 1999 , th e U.S . Hous e o f Kfapproved- abil l tomak e HMO s subjec t to law

itjr . Regardles s of

whedie r di e HMO liabilit

y bil l fther e i s adefinit

e tren dtowar

dmor e peopl e hav

pt y i n th e drug s the

y ar e prescribed . In differen t way s anddegrees , eac h o

f th e thre e segment s of the U.S . pharmaceutica

l industr y benefits fro

mthe.growt

h o f manage dcare . Partl

y becaus e o

f th e continue dtren dtowar d self-care , whic

h increasingly i s drive

n b y the managedcar

e industry , retai l sale s o

f nonprescriptio n drugs , ar

e expectedto increas e steadil

y ove r th e next 5 years . Managedcar

e ha s con tribute dto die ; expansion o f th e market s fo

r generic s as well . Generi c drug s ar

e forecas t t o accoun

t fo r inearl y two-third s of all prescription s writte

n b y th e en d i o f th e decade , alarg e increas e from4 2 percen

t o f th e marke t i n 199 6 an d2 2 percen

t in 1985 . Th e generic s marke t i s expecte dto reach $1 5 billio n by di e yea r 2000 , u p fro ma n estimate d$ 9 billio n in 1996 . Growt h of th e generic s marke

t als 6 i s aide db y th e fact

did t ove r th e next 5 year s drug s tha

t generate dmor

e tha n $1 6 billio n i

n 199 6 sale s ar e scheduledto los e paten

t protection . Sale s o

f research-based pharmaceutical s als o hav e been helpe db y managedcare . Man

age dcar e provider s realiz e tha

t newl y developedbrande d phar

maceutical s ofte

n prbVid e th e mos t effectiv e an dcost-efficien

t mean s to trea

t patients ; Increasingly , leading-edg e brande d pharmaceutical s are'btein g use db y managedcar

e provider s a s the preferredfort

n of treatment . T

o compet e wit h well-

- establishe dan

dcheaper , generi c product s an dto increas e thei

r shar e o f th e managedcaf

e market , th e brande dcompanie s hav e t o ensur e a'full^pipelin

e o f newan d innovative pharmaceutical s tha t offe r improvedeffectivenes s or

uniqu e solutions . T

o main

tain approximatel

y 10'percent

annua l growth , research-base d pharmaceutica

l companie s believ e tha

t tiiey mus t bring tw o or thre e new , product s t o marke t eac h year . * • The U:Srpharrnaceutica

l industr y i s experiencing amor

e industry-friendl

y regulator

y environment . Pharmaceutica l sale s continu e to benefi

t fro m1997 legislatio n tha

t streamline dth e U.S . Foodan

dDrug Administration' s (FDA) > approva l proces s Chemical s an d Allie d Product s 11-1 5



# / £P.2 2



### die yea r 2000 afte r a n unexpectedl

y strong performance o

f 7 percen t growt h in 1999 (se e Tabl

e 11-11) . A variet

y o f factor s contribute dt o the unusua

l increas e i

n shipments i

n 1999 : the abilit y o f the industr

y t o pus h throug

h resin pric e increases , the buildu p o f inventor y afte r adrawdow

n i n 1998 , the anticipation o f Y2 K problem s in sourcin

g resin , an dthe strengt

h of sale s i n virtuall y al l end-us e markets . Performanc e i n the yea r 200 0 wil l b e weake r becaus e o f expectedpric e an

dshipmen t erosio n dur

ing the first

quarte r afte r the inventor

y buildu p o f 1999 , addi

tional capacit

y comin g on-line withou

t sufficien t growt h i n th e domestic econom

y an ddi e expor

t marke t to support-it , increasedcompetition fromimportedmaterials , an daweake r performance i

n ke y end-us e markets suc

h as building an

d con struction an

dtransportation . Fo r di e nea r term, 2000-2004 , di e outloo k fo r plastic s wil

l continu e t o b e favorable , wit

h constan t dolla r shipment s growin g betwee n 3 an d4 percent

A weake r domestic econom

y wil l lea d t o weakene ddeman d i n ke y end-us e maikets . However , tha t tren d wil l b e offse t somewha t b y increasedexports a s economie s i n Asi aan d Sout h Americ arecove

r an d hav e highe r rate s o f growth . Expor t Trad e Pattern s an dProjections . Historically , export s a s apercentag e o

f plksti c resin shipment s have grow n a t a n increasing rate . Large regiona l expor t markets in th

e NAFT A countrie s an

dWester n Europ e an

ddouble-digit

growt h i n Asi a have J 

### playe d asignifican

t rol e i n thi s trend(se e Tabl

e 11-12) . The economic crisi s i

n Asi aan dth e economi c difficultie s expe rience din Lati

n Americ ain 199 8 sa

w areversa

l o f thi s trend . During mos t

o f 1999 , U.S . export s o

f plastic s to virtuall

y ever y region i n th e wbrl d wer e negative . However, ther

e wa s suffi

cient recovery—ledb

y Asia- 1 

### -such tha

t plasti c resin exports did end di e yea

r wit h apositiv e performance , albeit asmal l one . Fo r the first

tim e sinc e NAFTA' s implementation , export s t o I ic o fell . U.S . exports t

o tha t countr y wer e hur t b y lo w oi l prii j cut s i n spendin g b y di e Mexica

n government , an

dincrem e growt h i n th e domestic economy . Continuing poo r econ b performanc e wa

s th e larges t negative elemen

t fo r exporti l Latin America . U.S . export s to wester n Europ e suffered: * result o f competition fro

mAsia n exports . Brigh

t spots incl u China , Sout

h Korea, Vietnam , Thailand , an d Malaysi aagjj

j UnitedState s expande

dtrading opportunitie s i

n Vietnam ] th e Asia n economie s bega

n to sho w clea r sign s o f recoveryi f In the yea r 2000 , U.S . plastic s export s ar e expected t<J'| | 4. 1 percen t a s die Mexica

n econom y improve s it s perfdrrr

i an doil price s recover . Export s t o Lati n Americ aar

e expecto r continu e t o fall , althoug

h not a s muc h as i n 1999 . Incre

n growt h i s expectedi

n wester n Europ e a s competition fo

r i shar e fro mAsia n resin s i s not

anticipatedt

o b e a s fiercejjj wil l resum e it s position a s di e primar

y growt h marke t for | plastic s exports—altiioug

h growt h wil l have 1 

### aslowe

r wid i Vietna mpossibl y benefiting fro

mabilatera

l agr e wit h the UnitedStates . The sam e factors wil

l contri b expor t growt h o f 4 t o 5 percen t i n the perio d2000-2004 . J

I Impor t Trad e Pattern s an dProjections . Although' ^ wa s stron g deman

di n th e U.S . market , plasti c resin , ii f wer e negativ e fo

r mos t o f 1999 . Contributin g to thissc e wer e poor domesti c economie s in Mexic o an dmos t oft l Americ atha

t prompte dthos e countrie s to suppl y resin I domesti c market s a s oppose dt o exportin g o r importing!! ! rial. However, U.S . plasti c resi n import s di dultimately ^ positiv e performance , risin g 5. 4 percent fo r th e year;' - 

### mar y reaso n fo

r th e shif t i n fortune s was areversal , ih ^ dia n imports—fromnegativ e to positive—give n tha t th e
TABL E 11-11 : Plastic s Material s an d Resin s (SI C 2821 ) Trend s an d Forecast s (million s o f dollar s excep t as noted) 1 '

: --.-,. , t.,.-,. . ,._ . , -..-. , .,,- ;

: •'•'•• ' • : • • " '•• • 1g9 £ -

Industr y dat a - ••'••~.i • Valu e o f shipments 8 31,60 1 Valu e o f shipment s (1992$ ) 31,60 1 Tota l employmen t (thousands) . 61. 2 Productio n worker s (thousands ) 36. 5 Average ' hourl y earning s ($ ) • 18.6 1

. Capita l expenditure s 1,71 2

Produc t dat a ' Valu e o f shipments ' 33,29 9

Valu e o f shipment s (1992$ ) 33,29 9 Trad e dat a Valu e o f import s . .2,14 7 Valu e o f export s ,7,09 1 1993 ;

. , ; , 31,54 6 31,17 2 62. 2 36. 6 18.7 5 1,92 6 33,58 9 33;19 1 2,60 6 / 7,28 0 199 4

37,30 5 35,32 7 68. 9

. 40. 4 19.3 9 2,53 6 38,04 3 36,02 5

. . ; >;'3,38 0 8,52 9 199 5

. v- ; . 43,45 3 35,15 6 : 70. 0 41. 6 20.0 4 2,32 4 44,01 7 ' 35,61 2

' • 4,20 0 10,46 1 199 6

40,09 7 34,56 7 58. 6 36. 3 20.5 0 2,78 4 42,75 1 36,85 4 V - 4,31 1

. 10,70 5 . 199 7

44,57 5 37,67 8 61: 0 37. 5 21.7 0 2,92 1 45,67 0 38,62 3 4,78 8 11,88 4 . , .

1998' ' 47,16 0 39,48 6
, 60. 8 36. 7 22.6 2 2,72 7 47,86 2 40,09 1 4,91 3 11,28 2 1999 2

50,98 0 42,25 0 60. 5

. 36. 4 23.5 3 3,32 4 51,73 9 42,89 7 5,17 8 11,30 5 2000 3

52,86 6 43,517 ' 59. 3 35. 8 24.0 0 3,09 1 53,65 3 44,18 4 5,51 5 11,76 9 97-9 8

5. 8 4. 8 -0. 3 -2. 1 4. 2 -6. 6 4. 8 3. 8 2. 6 -5. 1 ' , f«| J

• : -"'# j Percen t Changt J 98-9 9 ' i 8. 1 7. 0 -0. 5 -0. 8 4. 0 21. 9 ' ' 8.1 ' ,7. 0

. , . 5.4 '

. 2 j 99^00j | '.;..:. ( D M 3 7 

## J 3. 6 i j -2.0oj 9 ^1. 6 J 2'. 0 1 -7.0' J 

### " '"'' l 3:7' 4 , . 3.0; J •". . <ti M -,6.6j J \S..hYM

' Estimat e excep t import s an d exports . .. . ~ ; . i . t . i . • -.•>;,' ' - 2 Estimate . ^ • 'Forecast . : " ' 4 Compoun d annua l rate . 'Fo r a definitio n o f industr y versu s produc t values , se e "Gettin g th e Mos t Ou t o f Outlook 2000." Source : U.S . Departmen t o f Commerce : Burea u o f th e Census ; Internationa l Trad e Administration . • >•?.' .

11-1 8 U.S
. Industr y & Trad e Outloo k 200 0 

### &\

### P.2 3

11-12 : U.S . Trad e Pattern s i n Plastics 1 i n 199 8 ^dollars ; percent

)

wrlc a Jtyrop e Mn« 8 Eco r

Countrie s omi c Are a Export * Value 3 4,72 0 1,40 0 2,13 7 1,64 5 81 3 56 8 11,28 2 Valu e 2,81 6 1,90 4 75 8 59 0 45 0 Share , % 4 2 1 2 1 9 1 5 7 5 10 0 Share , % 2 5 1 7 7 5 4 Import s

Region 2 NAFT A Lati n Americ a Wester n Europ e Japan/Chines e Economi c Are a Othe rAsi a Res t o f worl d Worl d To p Fiv e Countrie s Canad a Japa n German y Mexic o Franc e Value 3 2,34 4 8 5 1,45 0 78 2 17 5 7 8 4,91 3 Valu e 2,15 0 67 0 48 8 19 4 16 5 Share , % 4 8 2 3 0 1 6 4 2 10 0 Share , % 4 4 1 4 1 0 4 3 }n a o f regiona l groupings , se e "Gettin g th e Mos t Ou t o f Outlook 2000.' foo t su m t o tota l du e t o rounding
. I
. Departmen t o f Commerce , Burea u o f th e Census
. t-share o f

U.S . import s o f

plasti c resin . Althoug h a rtion o f th e market , double-digi t import s from omies—predominantl y Hon g Kong , Sout h Korea , isociatio n o f

Southeas t

Asia n Nation s (ASEAN ) lidifie d impor t

growth , yea r 2000 , import s ar e expecte d t o continu e apositiv e growth , risin g 6. 5 percent . Import s fromAsi awil l Io gro w a

t double-digi t

level s a s th e Asian economie s t o recover , bu t

gain s wil l no t

b e a s strong , a s Asian Ho tb e a s inexpensiv e a s i t wa s i n 1999 . Thi s shif t i n I I encourag e close r

sourcin g o f

material, wit

h th e (JOuntrie s an d western Europ e havin g th e mos t t o gain , r s wil l contribut e t o import growt h o f 4 t o 6 per io d 2000-2004 . [0 . Copperthiie, Offic e o f Metals , Materials , an d itemationa l Trad e Administration , (202 ) 482-5124 , lite@ita.doc.gov , Novembe r 1999 . Generic Pharmaceutica l Industr y Association , 1620 1 Street , NW , Suit e 800 , Washington , D C 20006 . Nonprescriptio n Dru g Manufacturer s Association , 115 0 Connecticu t Avenue , NW , Washington , D C 20036 . Pharmaceutica l Researc h an d Manufacturer s o f America , 110 0 Fif

teent h Street , NW , Washington , D C 20005 . Plasti c Material s an d Resin s America n Plastic s Council , 180 1 K Street , NW , Washington , D C 20006 . (202 ) 974-5400 , plastics.org . Facts and

Figures of

the U.S. Plastics Industry, 199 8 edition . Society o f th e Plastic s Industry , Inc. , 180 1 K Street , NW , Washington , D C 20006 . (202 ) 974-520 0 Modern Plastics, McGraw-Hill , Tw o Pen n Plaza , Ne w York , N Y 10121-2298 . (212 ) 904-6245 , modplas.com . Plastics Nws, Crai n Communication s Inc. , 74 0 Nort h Rus h Street , Chicago , I L 60611-2590 . plasticsnews.com . Society o f

th e Plastic s Industry , Inc. , 180 1 K Street , NW , Washington , D C 20006 . (202 ) 974-5200 , socplas.org . 

### WT E RE N C E S Ikitlritting Reporter, Schnel l Publishin g Company , 8 0 Broa d pork , N Y 10004 . (212 ) 248-4177 . i McGraw-Hil l Publications . 88 8 Sevent h Avenue , Ne w ['10106 . (212 ) 621-4900 . [Htfrmaceutical s 

# • Hal Reports, Manufacturers Shipments, Inventories and Ithly) , U.S . Departmen t

o f Commerce , Burea

u o f th e [Wellington , D C 20233 . • RELATE D CHAPTER S 8 : Buildin g Product s an dMaterial s 9 : Textile s 12 : Syntheti c Rubber 20 : Environmenta l Technologie s an dService s 25 : Printin g an dPublishin g 35 : Processe dFoo dan dBeverage s 45 : Medica l an dDenta l Instrument s

Chemical s an d Allie d Product s 11-1 9



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