Chemical industry Poland: Good prospects versus barriers to growth

The chemical industry plays a big role not only in everyday life but also in the majority of production processes of various industries. It has blossomed over the last few years which is confirmed by the growing statistics of the production volume. However, there are also barriers to the development of the chemical industry.

There are a number of statistics which confirm the chemical industry’s importance on the Polish market. Last year, its share of the global processing industry’s marketed production amounted to 13.9%, its share in the added value created in the industry reached 14.7% and the share of enterprises operating in the sector amounted to 12.7% in December 2017.

Within Europe, the position of the Polish chemical industry is also getting stronger and stronger, especially in terms of bulk chemicals. The problem is that Europe is gradually losing its significance as one of the main centres of global chemical production. According to the data of the European Chemical Industry Council, despite the growth of chemical production in the European Union from EUR 334 billion in 2000 to EUR 507 billion in 2016, the EU’s share of the global market shrank from 32.5% to 15.1%. This is a consequence of the dynamic growth reported by the chemical industry in Asia from which 62% of the global production originated in 2016.

The countries within Europe with the largest input into the chemical industry are Germany with production of EUR 145 billion as well as France (EUR 71 billion) and Italy (EUR 50 billion). Poland is also included in the group of the countries which have developed chemical industries at their disposal – in 2017, the industry’s marketed production amounted to the total of approx. EUR 39 billion, of which EUR 14.6 billion constituted the sales of chemicals and chemical products, EUR 3.4 billion – sales of pharmaceutical products and EUR 21.0 billion – sales of products made from rubber and plastics.

The industry’s structure

As part of the chemical industry operating in Poland – except for the fuel industry – three segments can be distinguished: bulk chemical production encompassing high-tonnage products and those used in bulk; chemical processing which manufactures end products on the basis of high-tonnage products and low-tonnage products, including pharmaceuticals, household chemical products and pesticides.

According to GUS (Central Statistical Office), between 2012 and 2017, the marketed produc-tion of the Polish chemical industry increased by a quarter – from approx. PLN 131 billion to PLN 164 billion. The main contributor to this was the 40% growth in the manufacturing of products made from rubber and plastics as well as the production of pharmaceuticals increased by over 34%, with the growth in the production of chemicals and chemical products being as little as 6%.

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Polish chemical industry is dominated by large entities which mainly manufacture high-tonnage chemicals in basic forms and tyres. The eight biggest enterprises which constitute the industry’s core manufacture approx. 1/3 of the total production of the chemical industry in Poland. The remaining 2/3 of the market consists of over 10 thousand smaller entities.

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