Performance of W.A. Chemical Industry

The chemical industry in W.A. employed 6 200 persons with a gross turnover of $3.5 billion. It represents 8.4 per cent of the manufacturing sector by employment and 14.2 per cent by value added. The table below summarises manufacturing activities in W.A. including the chemical industry.

1998-99 Manufacturing in W.A. (including the chemical sector)

		Employment at end of June(b)	Wages and salaries(c)	Turnover[i]	Industry Value added[ii]	Industry Value added per employee
ANZSIC	Description	'000	$m	$m	$m	'000
21	Food, beverage and tobacco mfg	13.0	413	3137	744	57.2
22	Textile, clothing, footwear and leather mfg	3.1	77	328	114	36.8
23	Wood and paper product mfg	4.2	133	737	273	65.0
24	Printing, publishing and recorded media	7.7	252	1024	501	65.1
25	Petroleum, coal, chemical and associated product mfg[1]	6.2	291	3467	695	112.1
26	Non-metallic mineral product mfg	5.2	221	1307	460	88.5
27	Metal product mfg	16.2	628	5068	1184	73.1
28	Machinery and equipment mfg	13.0	447	2289	694	53.5
29	Other manufacturing	5.2	132	584	225	43.3
21-29	Total manufacturing	73.7	2595	17941	4891	66.4
	W.A. Division 25 as % all W.A. manufacturing.	8.4%	11.2%	19.3%	14.2%
	All Australia, Division 25 mfg[2]	96.5	4223	33602	9577
	W.A.: Division 25 % Australia Division 25	6.4%	6.9%	10.3%	7.2%

Derived from ABS: Manufacturing Industry, Preliminary 8201.0 1998-99

Table 1 The chemical industry in perspective with manufacturing in WA

W.A. Chemical sector employment, wages and turnover

25 Petroleum, coal, chemical and associated product mfg[3]	Employment (000’s)	Wages and salaries $m	Turnover $m	Turnover per employee
1997-98	6.5	279.0	3 335.3	515.1
1996-97	6.5	271.5	3081-5	472.9
1995-96	6.6	245.4	2843.6	429.4
1994-95	6.2	225.6	2813.5	457.4
1993-94	5.6	201.1	2779.7	498.5
1992-93	5.5	191.1	2786.8	511.2

Table 2 Profile of the chemical sector in WA

Source: Table 1 ABS Manufacturing Industry, WA 8221.5 1997-98 Australia

While the industry has shown strong growth in recent years, it has increased by only 2 per cent per year reflecting extensive industry rationalisation, notably in the formulating sector that offset growth in other sectors.

Manufacturing in W.A. 1993-1998

Total manufacturing	Employment	Wages & salaries	Turnover	Turnover per employee
1997-98	76.0	2513.2	17 529.2	230.8
1996-97	73.5	2424.9	16779.7	228.3
1995-96	72.3	2213.4	15749.8	217.8
1994-95	73.8	2154.6	15246.2	206.5
1993-94	69.9	2 021.9	14192.9	203.0
1992-93	68.8	1949.2	13919.0	202.4

Source: Table 1 ABS Manufacturing Industry, WA 8221.5 1997-98

Table 3 The manufacturing sector in W.A. showing growth in turnover per employee

W.A. Chemical industry by sector 1997-98

	Employed	Wages & salaries	Turnover	Industry value added	Turnover per employee	Industry value added per employee
Basic chemical mfg
Fertiliser mfg	558	29.3	330.1	111.2	592	199.4
Industrial gas mfg	n.p.	n.p.	n.p.	n.p.	n.p.	n.p.
Synthetic resin mfg	95	n.p.	n.p.	n.p.	n.p.	n.p.
Organic industrial chemical mfg n.e.c.	n.p.	n.p.	n.p.	n.p.	n.p.	n.p.
Inorganic industrial chemical mfg n.e.c.	1072	59.6	547.9	145.1	511.3	135.4
Total Basic chemical mfg	2002	104.2	963.2	291.4	481.1	145.5
Other chemical products
Explosive mfg	1,89	n.p.	n.p.	n.p.	n.p.	n.p.
Paint mfg	363	9.6	89.5	41.8	246.9	115.3
Medicinal and pharmaceutical product mfg	311	14.8	79.8	34.9	257	112.3
Pesticide mfg	n.p.	n.p.	n.p.	n.p.	n.p.	n.p.
Soap and other detergent mfg	190	4.3	22.3	7.5	117.2	39.2
Cosmetic and toiletry preparation mfg	42	n.p.	n.p.	n.p.	n.p.	n.p
Ink mfg	n.p.	n.p.	n.p.	n.p.	n.p.	n.p
Chemical product mfg n.e.c.	222	6	50.9	12.2	228.9	55
Total Other chemicals	1480	57.2	521.4	177.9	352.4	120.2
Total chemicals	3 482	161.4	1 484.6	469.3	833.5	134.7
Total Manufacturing	75 957	2 513.2	17 529.2	5 240.1	230.8	69.0

n.e.c. = not elsewhere classified.

Source: ABS Manufacturing Industry W.A. Cat 8221.5 1997-98

Table 4 Key indicators by sectors of WA chemical industry.

Employment distribution W.A. Chemical industry

Employed persons	Employment		Wages and salaries		Turnover		Industry Value added		Value added per employee
	No.	%	$m	%	$m	%	$m	%	$ ‘000
0-4	390	6	6.7	2.4	214	6.4	115.9	13.2	297
5-9	530	8.2	14.5	5.2	102.4	3.1	42.5	4.9	80
10-19	536	8.3	17.3	6.2	118.9	3.6	41	4.7	76
20-49	1079	16.7	36	12.9	389.7	11.7	115.6	13.2	107
50-99	894	13.8	33.2	11.9	306.8	9.2	99.3	11.3	111
Total less than 100	3430	53	107.8	38.7	1131.8	34,0	414.4	47.3	121
100-199	970	15	47.4	17	363.7	10.9	142.9	16.3	147
200-999	2075	32.	123.6.	44.3	1837.9.	55.1.	319.3	36.4	154
1000 or more	-	-	-
Total 1000 or more	3045	47	171	61.3	2201.6	66	462.2	52.7	152
Total	6475	100	278.8	100	3333.5	100	876.6	100	135

Source: Table 4, ABS Manufacturing Industry, WA 8221.5 1997-98

Table 5 Value added and employment profile of the chemical industry in W.A.

It shows a much higher value added per employee for the small businesses employing up to four persons that is more than double the average for this chemical industry. The second largest value adding per employee category are businesses employing between 100 and 200 persons at $147 000 per person.

The following table repeats the profile for the whole manufacturing sector in W.A. based on the number of employees in the business.

Total all manufacturing W.A. 1997-98
No. employed persons	Employment end of June		Wages and salaries		Turnover		Industry value added		Value added/employee
No. employed persons	Employment end of June		Wages and salaries		Turnover		Industry value added		Value added/employee
Employment size group	No.	%	$m	%	$m	%	$m	%
0-4	6993	9.2	121	4,8	1228.2	7	724.3	13.8	104
5-9	7213	9.5	160.6	6.4	736.3	4.2	276.6	5.3	38
10-19	9672	12.7	262.9	10.5	1262.9	7.2	438	8.4	45
20-49	12746	16.8	403.9	16.2	2554.9	14.6	823	15.7	65
50-99	10090	13.3	353.1	14.1	2208.2	12.6	739.1	14.1	73
Total less than 100	46714	61.5	1301.6	52	7990.5	45.7	3 001.0	57.3	64
100-199	9236	12.2	336.5	13.5	2348.9	13.4	707.1	13.5	77
200-499	13380	17.6	556.5	22.3	4840.5	27.7	873.4	16.7	65
500-999;	n.p.	n.p.	n.p.	n.p.	n.p.	n.p.	n.p.	n.p.	n.p
1000 or more	n.p.	n.p.	n.p.	n.p.	n.p.	n.p.	n.p.	n.p.	n.p
Total 100 or more	29243	38.5	1199.2	48	9477.1	54.3	2231.9	42.7	76
Total.	75957	100	2 500.8	100	17467.6	100.0,	5232.9	100.0.	69

Source: ABS Manufacturing Industry, WA 8221.5 1997-98 (n.p. = not for publication as confidential)

Table 6 Value added and employment profile of the manufacturing industry in W.A.

Exports from WA

The next table lists the industry groupings by ANZSIC classification, value of exports and percentage of total exports from the chemical industry in W.A.

Exports for 1999 – by ANZSIC classification

Product (by four digit SITC	Export volume	Percentage of total
Colourants etc	389,002,233	52%
Inorganic chemicals	165,706,669	22%
Medicinal & pharmaceutical	150,107,488	20%
Chemical materials and products	25,463,844	3%
Plastics in primary forms	3,857,285	1%
Plastics in non-primary forms	8,470,219	1%
Organic chemicals	885,806	0%
Essential oils, perfumes & toiletries	1,876,570	0%
Fertilisers (excl. crude)	1,466,762	0%
*Total*	*746,836,876*	*100%*

Table 7 a profile of exports by the ANZSIC industry statistical classification in order of proportion of the total.

Table 7 shows that 94 per cent of exports are accounted for by just three groups of activities, while one-half is represented by titanium dioxide pigment manufactured by Tiwest Joint Venture and Millennium Inorganic Chemicals. The other key industry sector that exports are the manufacturers of inorganic chemicals, notably aluminium hydroxide by Alcoa and silicon metal by Simcoa. The third group is the medicinal and pharmaceutical industry group principally represented by Pharmacia Upjohn.

Another useful perspective of trade is provided by detailing foreign trade in commodities as represented by the Standard International Trade Classification (SITC). By detailing components and disaggregating some groups of products, it shows a slightly different perspective of trade than based on a review of industry groups. Some 83 per cent of exports can be identified with just four groups of chemicals.

Exports by SITC classification

SITC Division	Description	Value of exports	% of Total
53311	Pigments and preparations based on titanium dioxide	385,061,781	52%
54293	Medicaments (excl. antibiotics, hormones, steroids, alkaloids, derivatives thereof), in doses or for retail sale	135,761,922	18%
52266	Aluminium hydroxide	57,873,596	8%
52223	Silicon	39,926,771	5%
52342	Sulphides, (excl. sodium); polysulphides	25,518,304	3%
52239	Inorganic oxygen compounds of non-metals, nes	17,054,151	2%
59130	Weed killers, anti-sprouting products and plant growth regulators, for retail sale or as preps or articles	17,034,387	2%
52432	Colloidal precious metals; inorganic or organic compounds of precious metals; amalgams of precious metals	15,692,276	2%
54219	Medicaments antibiotics, (excl. penicillins, streptomycins) in measured doses or for retail sale	8,009,447	1%
	Total exports	746,836,876	100%

Table 8 Details of exports by five-figure SITC division – in order of value.

W.A. Imports

The table below describes key foreign imports into Western Australia by ANZSIC industry sector for 1999. Again, like for exports, the imports are highly concentrated with the industries representing organic chemicals and fertilisers associated with 65 per cent of imports of chemicals into W.A.

Imports for 1999 by ANZSIC Classification

Product	ANZSIC	Value	Per cent of total
Organic chemicals	51	294,279,966	38%
Fertilisers (excl. crude)	56	209,748,637	27%
Inorganic chemicals	52	75,002,877	10%
Chemical materials and products	59	71,535,064	9%
Plastics in non-primary forms	58	43,459,510	6%
Medicinal & pharmaceutical	54	32,235,837	4%
Plastics in primary forms	57	32,628,449	4%
Essential oils, perfumes & toiletries	55	13,011,766	2%
Colourants etc	53	10,441,665	1%
Total		782,343,771	100%

Table 9 Three industries, organic chemicals, fertilisers and inorganic chemicals together represent three-quarters of imports.

An explanation of the nature of the imports is made clear in the following table showing the imports by SITC product groupings.

Imports by SITC classification

Total industry (by SITC)	SITC descriptions representing more than 1 per cent of total imports	Total imports $782,343,770	Per cent of total imports (ranked)
51569	Heterocyclic compounds with oxygen hetero-atom(s) only, nes	88,022,237	11%
51577	Heterocyclic compounds, with nitrogen hetero-atom(s) only, nes	70,094,146	9%
56293	Diammonium hydrogen orthophosphate (diammonium phosphate)	58,426,053	7%
56216	Urea	54,617,692	7%
56294	Ammonium dihydrogen orthophosphate (monoammonium phosphate) and mixtures thereof with diammonium phosphate	38,559,295	5%
59130	Weed killers, anti-sprouting products and plant growth regulators, for retail sale or as preps or articles	25,213,146	3%
54139	Antibiotics (excl. penicillins, streptomycins, tetracyclines, their derivatives and salts)	24,296,579	3%
51576	Heterocyclic comps with nitrogen hetero-atom(s) only, pyrimidine, piperazine, triazine ring; nucleic acids	22,626,478	3%
56231	Potassium chloride	21,313,399	3%
52261	Ammonia, anhydrous, or in aqueous solution	19,294,481	2%
52234	Diphosphorus pentoxide; phosphoric acid and polyphosphoric acids	19,129,189	2%
56222	Superphosphates	17,581,826	2%
51579	Heterocyclic compounds, nes	11,322,805	1%
51392	Carboxylic acids with al but not other oxygen funct nes, anhydrides, halides, peroxides, peroxyacids and derivatives	11,265,350	1%
51549	Organo-sulphur compounds, nes	10,736,267	1%
51489	Nitrogen function compounds, nes	10,084,146	1%

Table 10 Imports by SITC commodity

Table 10 shows the six largest categories of imports, representing 42 per cent of imports, are agricultural chemicals distributed evenly between herbicide chemicals (heterocyclic chemicals) and fertilisers (urea and two phosphate fertiliser groups).

Technological innovation in Australian manufacturing

PROPORTION OF BUSINESSES UNDERTAKING TECHNOLOGICAL INNOVATION
	Product innovation %		Process Innovation %		Total Innovation (a) %
Industry	1991-94(b)	1994-97(c)	1991-94(b) 1994-97(c)		1991-94(b) 1994-97(c)
Food, beverage and tobacco mfg	29	33	25	29	36	36
Textile, clothing, footwear and leather mfg	28	15	21	14*	30	15
Wood and paper product mfg	13	12	11	12	15	16
Printing, publishing and recorded media	22	18	30	21*	34	26
Petroleum, coal, chemical and associated product mfg[4]	46	35	30	29	46	42
Non-metallic mineral product mfg	35	33	25	21	37	36
Metal product mfg	29	20	22	13	32	21
Machinery and equipment mfg	39	33	25	20	42	35
Other manufacturing	27	19	21	15	31	21
Manufacturing	30	23	23	18	34	26
(a) Some manufacturers undertake both product and process innovation. Hence, the respective proportions will not sum to the total (b) Three years ended 30 June 1994. (c) Three years ended 30 June 1997. Source: ABS, Innovation in Manufacturing, Australia, 1996-97 (Cat no. 8116.0).

Table 11 Indicators of innovation by industry sector

[1] The chemical industry represents about 95 per cent of this ABS statistical grouping.

[2] The chemical industry represents about 95 per cent of this ABS statistical grouping.

[3] The chemical industry represents about 95 per cent of this ABS statistical grouping.

[4] The chemical industry represents about 95 per cent of this ABS statistical grouping.

Western Australia - Australia's resource State

Performance of W.A. Chemical Industry

Manufacturing in W.A. 1993-1998

Exports from WA

W.A. Imports

Technological innovation in Australian manufacturing