The UK's chemical industry, a foundational sector for manufacturing a wide range of essential products, has experienced a substantial decline, impacting the country's ability to produce everything from medicines to defense materials. This sector, which registered a turnover of $65.5 billion and a gross value added (GVA) of $21.8 billion, comparable to aerospace and automotive industries, has seen its output fall by around 40% since 2000. This decline has transformed the industry from a trade surplus in the late 1990s to a trade deficit of approximately $10 billion annually.
Key indicators of this decline include the closure of at least 25 chemical sites in recent years, leading to a significant reduction in CO2 emissions primarily due to deindustrialization rather than efficiency improvements. The industry's current state relies on a shrinking number of aging assets and increasingly depends on overseas supply chains. For example, the country that once built ICI no longer produces basic chemicals like ammonia for fertilizer, and other critical plants have either closed or are facing closure, such as ExxonMobil’s Mossmorran ethylene plant.
This weakening of the chemical sector has severe implications for national security and economic self-sufficiency. The UK's share in the global market for crucial pharmaceutical ingredients, like oxygen-function acids and heterocyclic compounds, has collapsed by two-thirds and over 60% respectively. While the global market for medicaments grew by 41%, UK exports remained flat at around $13 billion, indicating a missed opportunity of $5.6 billion if it had maintained its 2019 market share. This situation underscores a broader vulnerability, as the chemicals are fundamental to various downstream industries, including food, healthcare, and defense.
