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