For most of the 20th century, the chemical and petrochemical industry was one of the success stories of British manufacturing. It is still one of the country's largest export industries, even though it is now in recession. There is a lot of pressure for change. Several exciting technological advances in recent years have opened up completely different prospects for future responsive processing plants. Roger Benson outlines how these plants will grow and how the distributed manufacturing environment will change the face of the industry.
Britain's chemical and petrochemical industry was one of the successes of the 20th century. The early success was the result of the expansion of the domestic market for new products such as plastics. Later, with the discovery of Beihai oil, it achieved further success. This has led to substantial capital investment and many employment opportunities in direct and support industries.
In recent years, things have changed. New capital investment is very small, and many supporting manufacturers have closed down. Britain's chemical industry is in decline. Although it remains one of the UK's most important and successful export industries, it faces the risk that any further decline will have a significant impact on the UK's trade balance.
Pressure change
If nothing changes, there are at least four major pressures that could lead to a recession. Some of them have been reported in the 1998 DTI study processing the future
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The British chemical industry is often seen in the media as an unattractive large multi factory base, such as Wilton, stanlow and shellhaven. Columns and chimneys that project into the air and emit steam or flames from time to time are considered potential hazards (see Figure 1).
The fact is quite different
The data confirm that these places are one of the safest workplaces in the UK
Across the UK, most of the manufacturing plants are run by small specialized chemical manufacturers.
However, marketing tells us that the view is realistic, and one of the challenges facing the industry is to change that view.
finance
The industry is no longer considered an attractive investment. In August 2002, the average price earnings ratio of the chemical and oil sectors in the UK stock market was 11 times, which shows this point. This is in sharp contrast to the pharmaceutical industry, which has an average p / E ratio of 20, driven by an intensive research portfolio and future prospects.
Supply chain
Chemical and petrochemical processes are usually the first step in a supply chain, with consumers as the final destination. Industries that have direct contact with consumers, such as supermarkets, electronics and automobiles, are trying to improve their responsiveness and reduce their supply chain costs as a percentage of sales. As a result, working capital is driven out of their supply chain and transferred to their suppliers, who in turn transfer to their suppliers. As the chemical and petrochemical industries are still in the early stage of the industrial chain, they are at the end of the whole working capital shortage. Therefore, they either need to improve the “responsiveness” of the production process or maintain uneconomic working capital. Two recent publications 2 and 3 confirm that working capital is increasing.
global economy
Electronic trading, swap and other arrangements put all the price pressures on the chemical and petrochemical industries to buy from the cheapest place, no matter in which country. Choice becomes a trade-off between manufacturing price and distribution cost from manufacturing to consumers.
Recognizing these pressures, the UK manufacturing foresight group 4 identified the need for “production as a unit” in the future. This means that if the customer orders only one barrel of product, the factory produces only one barrel. “Responsive” or “agile” is often used to describe this manufacturing process.
Unfortunately, this completely goes against the normal design philosophy and history of most chemical and petrochemical processes today. These are designed for constant rate steady-state continuous operation. As a result, most factories are large and sustainable, either high-speed continuous production or mass production. Therefore, it is difficult for existing operators to cope with these new market challenges. For a factory which has been devalued completely and its operating profit margin is very low, it is difficult to prove its rationality to invest in different manufacturing processes.
As the pressure intensifies, some things will have to change, or such operations will eventually have to close.
