Chemical industry

Chemical industry manufacturers more than 20 th different products at the total amount of UAH 40.0 – 45.0 mlrd per annum and holds 6.5% in the structure of manufacturing output (5th place) and 4.3% in GDP structure. The enterprises of chemical industry supply products for all main branches of commercial production, transport, agriculture, defence, public services, etc.

The basis of the chemical complex of Ukraine is the manufacture of mineral fertilizers (more than 60% from the total output of chemical industry). In 2008, the manufacture of mineral fertilizers reached 2,689.0 th tons. In 2009, the agrarian sector need in mineral fertilizers was 775.0 th tons.

The enterprises of chemical industry of Ukraine are low-margin; at that, the major losses are incurred by the state enterprises, which have the share of 20%, while their production output reaches 30 – 35% from the total output of chemical industry.

The export of chemical industry production holds the second place in the overall structure of Ukrainian export with 8%. In spite of this, during 2005 – 2008, Ukraine imported more production of chemical industry than exported.

At present, Ukrainian chemical enterprises supply 30% of chemical production of consumer and industrial purpose, which is consumed by the domestic commodities market. The industry capabilities for increase of competitive commodity production volumes are rather material. The operating chemical enterprises are capable to supply up to 75% of production, consumed on the domestic market. Ukraine has potential raw material base in order to achieve it.

In order to increase the chemical industry efficiency, the Strategy for the Development of Chemical Complex of Ukraine was elaborated. According to this Strategy, the annual amount of finance, required for production assets renewal, should be increased from UAH 2.4 mlrd to UAH 3.3 – 4.5 mlrd. In the nearest six – seven years, the Ukrainian chemical enterprises are planning to invest into production not less than UAH 13.0 mlrd in total. Thus, in order to attract capital investments for renewal of fixed assets and introduction of modern energy-saving technologies, the Cabinet of Ministers of Ukraine will develop special investment programs.

One of industry development priorities is transfer to energy-saving technologies. This problem is urgent in Ukraine, as chemical industry consumes 11% from the total gas volume (i.e. more than 8.3 mlrd cubic metres in quantitative terms) per year.

The main trend of the world chemical industry is restriction of environmental requirements and standards. Thus, on June 1, 2007, the President of the European Union and the President of the European Parliament signed the final draft law - REACH (Registration, Evaluation and Authorization of Chemicals). REACH is the system of registration, evaluation and authorization of different chemicals. The introduction of such regulation in the EU will help, first of all, to reveal substances, which pose hazards to human health and environment and restrict their further access to the EU territory. The adoption of new integral system in the EU will greatly influence over the export possibilities of the Ukrainian manufacturers, namely, it may lead to decrease of supplies to the foreign markets.

Along with production of fertilizers, the petroleum chemistry is very important in overall chemical industry structure. The petroleum chemistry, excluding fertilizers, holds 30 – 40% of chemical industry output. The petroleum chemistry of Ukraine also includes processing of oil and gas by chemical and oil and gas enterprises; production of different types of fuel and combustibles, raw materials for further manufacture of more complicated chemical industry output (plastic materials, vulcanized rubbers, other polymers).

About 10% of oil and gas serves as raw materials for petroleum chemistry, while the manufactured production is used in many industries.

The main directions of petroleum chemistry are as follows:

 

• re-equipment of enterprises;
• development of energy-saving technologies;
• introduction of quality system, recognized by the majority of the countries;
• substitution of raw materials for cheaper analogues.

The important direction of petroleum chemistry structural transformation and overcoming external trade deficit in chemical segment will be the increase of import-substituting products and further expansion of manufacture and export of traditional Ukrainian production, as well as enlargement of product line in order to satisfy the needs of domestic market.

The developed countries find the way out from the situation in new markets conquering and transfer of production capacities to less developed countries. Ukraine is among the top-priority countries for this direction. Many European companies have already planned to locate their enterprises in the territory of Ukraine.