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Chemistry for a better life

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Australia is the lucky country<br />

but needs to do more with<br />

its unique mineral resources.<br />

Australian governments can<br />

incentivise more value-add<br />

to our mineral products and<br />

drive new jobs in chemical<br />

manufacturing. CREDIT: GRAEME<br />

CHURCHARD VIA FLICKR CC BY 2.0<br />

Combined revenues <strong>for</strong> the top 50 global chemical firms<br />

increased 1.7% to US$980.5 billion in 2013. 5 The top 10<br />

chemical companies in the world had a turnover of<br />

US$429 billion in 2014.<br />

Innovation in the global chemical industry is mostly driven<br />

by the innovation plans of the largest companies and by the<br />

innovation policies of the major production regions and<br />

countries, such as the EU, the USA, and some of the major<br />

Asian countries. Countries with the highest innovation intensity<br />

are the USA, China, the EU, Japan and Switzerland. China and<br />

India are emerging as large investors in chemistry R&D.<br />

Many of the large chemical companies re-invest a substantial<br />

proportion of their sales revenue in their R&D projects and<br />

facilities. Some of these are increasingly diversified and<br />

have relocated closer to their major customer markets or<br />

manufacturing bases. As a result, many international chemical<br />

companies have been moving their R&D capabilities out of<br />

Australia, leaving only customer service and some minor<br />

manufacturing capacity in Australia.<br />

Australia as a developed country should be reducing its<br />

exports of raw mineral products. The easy option of exporting<br />

raw minerals has led to a decline in innovation. As a result,<br />

the Australian chemical industry requires resourcing and<br />

incentives to drive more downstream value-add to the<br />

mining of the country’s natural ores and mineral deposits.<br />

For example, lowering the tax rates on minerals and other<br />

raw inputs sold internally within Australia can help make<br />

the establishment of local chemical manufacturing<br />

more economic. Full taxes would be imposed only on<br />

internationally exported products. Furthermore, domestic<br />

reservation of key inputs such as natural gas can help to<br />

stimulate innovation across the sector. The US has done this<br />

with its shale gas deposits and, as a result of corralling some<br />

of its gas supply <strong>for</strong> domestic use at competitive prices, there<br />

has been a rapid resurgence of the US chemical industry.<br />

The lower cost of energy has made its manufacturing costs<br />

competitive with Asia.<br />

5 http://cen.acs.org/articles/92/i30/CENs-Global-Top-50-Chemical.html<br />

Chapter II Why chemistry matters<br />

THE DECADAL PLAN FOR AUSTRALIAN CHEMISTRY 2016–25 11

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