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Performance of W.A. Chemical Industry

 

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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

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.


[i] Turnover.

Sales (exclusive of excise and sales tax) of goods whether or not produced by the establishment and transfers out of goods to other establishments of the same business, plus service income (such as income from work done or sales made on a commission basis, income from repair, maintenance or servicing, installation and delivery charges separately invoiced to customers, advertising income, management fees/charges received from related or unrelated businesses, income from intellectual property royalties, and rent, leasing and hiring income (except from finance leases)), funding by Federal, State and/or Local Governments for operational costs, and capitalised work done by the employees or proprietors of an establishment for use by the business unit or for rental or lease to other businesses. Excluded from turnover are interest income, income from natural resource royalties, funding by Federal, State and/or Local Governments for specific capital items, dividends, and receipts from the sale of fixed tangible assets.

[ii] Industry value added (IVA).

IVA represents the value added by an industry to the intermediate inputs used by the industry. Commencing with estimates for 1997‑98, under new international standards, IVA has replaced industry gross product (IGP) as the measure of the contribution by manufacturing industries to gross domestic product. The derivation of IVA is as follows:

Turnover

plus Closing inventories

less Opening inventories

less Intermediate input expenses

equals IVA

However, it should be noted that IVA is not a measure of operating profits before tax. Wages, salaries and most other labour costs are not taken into account in its calculation and nor are most insurance premiums, interest expenses or depreciation and a number of lesser expenses.

Industry gross product (IGP).

The relationship between IVA estimates and IGP estimates is:

 IVA

plus Intellectual property royalty expenses

less Intellectual property royalty income

less Computer software expenses not capitalised by the business

less  Selected indirect taxes (For manufacturing industries, the main are fringe benefits tax, payroll tax, land rates and land taxes.)

equals IGP

 

 


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