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Although chemicals were made and used throughout history, the birth of the heavy chemical industry (production of chemicals in large quantities for a variety of uses) coincided with the beginnings of the Industrial Revolution in general. From the perspective of chemical engineers, the chemical industry involves the use of chemical processes such as chemical reactions and refining methods to produce a wide variety of solid, liquid, and gaseous materials. Most of these products serve to manufacture other items, although a smaller number go directly to consumers.
The chemical industry comprises the companies that produce industrial chemicals. Central to the modern world economy, it converts raw materials (oil, natural gas, air, water, metals, and minerals) into more than 70,000 different products.
The plastics industry contains some overlap, as most chemical companies produce plastic as well as other chemicals.
Life sciences (about 30 percent of the dollar output of the chemistry business) include differentiated chemical and biological substances, pharmaceuticals, diagnostics, animal health products, vitamins, and pesticides. While much smaller in volume than other chemical sectors, their products tend to have very high prices—over ten dollars per pound—growth rates of 1.5 to 6 times GDP, and research and development spending at 15 to 25 percent of sales.
Life science products are usually produced with very high specifications and are closely scrutinized by government agencies such as the Food and Drug Administration. Pesticides, also called "crop protection chemicals", are about 10 percent of this category and include herbicides, insecticides, and fungicides.
Specialty chemicals are a category of relatively high valued, rapidly growing chemicals with diverse end product markets. Typical growth rates are one to three times GDP with prices over a dollar per pound. They are generally characterized by their innovative aspects. Products are sold for what they can do rather than for what chemicals they contain. Products include electronic chemicals, industrial gases, adhesives and sealants as well as coatings, industrial and institutional cleaning chemicals, and catalysts.
In 2012, excluding fine chemicals, the $546 billion global speciality chemical market was 33% Paints, Coating and Surface Treatments, 27% Advanced Polymer, 14% Adhesives and Sealants, 13% additives and 13% pigments and inks. Speciality chemicals are sold as effect or performance chemicals. Sometimes they are mixtures of formulations, unlike "fine chemicals," which are almost always single-molecule products.
Consumer products include direct product sale of chemicals such as soaps, detergents, and cosmetics. Typical growth rates are 0.8 to 1.0 times GDP. Consumers rarely if ever come into contact with basic chemicals but polymers and speciality chemicals are the materials that they will encounter everywhere in their everyday lives, such as in plastics, cleaning materials, cosmetics, paints & coatings, electronic gadgets, automobiles and the materials used to construct their homes.
These speciality products are marketed by chemical companies to the downstream manufacturing industries as pesticides, speciality polymers, electronic chemicals, surfactants, construction chemicals, Industrial Cleaners, flavours and fragrances, speciality coatings, printing inks, water-soluble polymers, food additives, paper chemicals, oil field chemicals, plastic adhesives, adhesives and sealants, cosmetic chemicals, water management chemicals, catalysts, textile chemicals. Chemical companies rarely supply these products directly to the consumer.