Is the chemical industry recovering? Is the chemical industry really in a poor state?

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This post was last edited by cflt111 on 2018-11-13 07:59. Is the chemical industry recovering? Is it really in a poor state? This article is an original piece by Ma Youcheng Biao (Gutenberg) from the chemical industry sector. A few weeks ago I wrote an article predicting how the development of computers and artificial intelligence will change our lives and careers; the computer, internet, and information technology industries are full of prospects and opportunities for profit. However, when it comes to the chemical industry, the first things that come to the mind of the general public are words like pollution, explosions, and food additives; it gives the impression of an industry on the decline, a low-status sector. Since I work in the chemical industry myself, having spent ten years at a top 500 chemical company on chemical process design and optimization, I have some understanding of research and development, design, and manufacturing in this industry. I would like to discuss, based on what I have seen, heard, done, and thought, whether the chemical industry is a low-end industry or not. There are two purposes: one is to provide an objective overview of the industry for educational purposes, and the other is to lay a foundation for writing articles related to the chemical engineering field in the future. First, let’s clarify what the chemical industry does What use is it to our lives? Outside the industry, people’s understanding of the chemical sector generally stems from their experiences in chemistry classes in middle or high school; they think that those working in the chemical industry just use flasks and test tubes. In reality, 99% of the people working in chemical companies do not need to use flasks or test tubes. Material changes can be divided into three types: physical changes, in which there is no change in the molecular structure; new functions are created through changes in shape or arrangement, such as in automobile manufacturing and computer manufacturing. A chemical change is a process in which atoms are rearranged through chemical reactions to form new molecular structures, resulting in the creation of new substances. There are many types of industries involving chemical changes, such as the chemical industry, metallurgical industry, glass industry, semiconductor industry, and pharmaceutical industry. However, some products are produced in such large quantities that they are considered as a separate industry category, listed alongside the chemical industry. Biological changes: New molecular structures are created through microbial reactions, such as in brewing and fermentation; many of the traditional delicacies featured in \"A Bite of China\" are made using biological fermentation. Biological changes are truly remarkable and profound; my knowledge is too limited to allow for in-depth discussion on them. The chemical industry certainly relies on chemical reactions; virtually every chemical plant has chemical reaction units. Baidu Baike’s definition: The chemical industry, also known as the chemical processing industry, refers to those process industries in which chemical methods play a dominant role in the production process. I think this definition does not highlight the key aspects of the chemical industry. My definition is: the chemical industry is an industrial process that involves the large-scale production of substances that are rare or nonexistent in nature through chemical reactions. There are three key points: first, chemical reactions are the core process ； Second, the product is a substance that is rare or does not exist in nature ； Third is industrialized mass production. I needn’t write about the history of the development of the chemical industry; there’s plenty of information available on Baidu. Two points deserve mention: First, humans began using chemical reactions very early on, for example in pottery making, brewing, dyeing, smelting, and **. But it can’t be called industrial production; it’s more like handicraft workshop production. Secondly, true industrial chemical processes emerged during the First Industrial Revolution, when the rapid development of industries such as textiles, glass, and soap created a high demand for alkalis and inorganic acids. The first typical chemical plant in inorganic chemistry was the lead chamber sulfuric acid plant established in Britain in the 1740s. (As an aside: It occurred to me that after the invention of the steam engine, it was first applied in the textile industry; likewise, products from the chemical industry were first used in the textile industry. Why did the Industrial Revolution start with the textile industry as its starting point?) Was clothing seriously insufficient for humans in the 18th century? ) The operation of the entire industrial system relies on two foundations: materials and energy; the functioning of the entire natural world as well as human society depends on these two as well. The role of the chemical industry within the overall industrial system is to provide basic and functional raw materials, as well as energy sources. To help with understanding, here are a few examples of how the chemical industry directly affects our lives. Daily life revolves around basic needs such as food, clothing, shelter, and transportation. As for food, it was only with the advent of pesticides and fertilizers that grain yields increased from around 300 pounds per mu to nearly 2,000 pounds per mu today, allowing people to eat to their heart’s content ； Only with an abundance of food can animal husbandry be developed, allowing humans to consume large amounts of milk and meat. Before the chemical industry existed, humans could only wear clothes made of cotton; they relied on cotton to keep themselves warm. When their clothes got torn, they would patch them up and continue wearing them ； It was only with the advent of chemical fibers that it became possible to buy cheap clothes, which could be thrown away after being worn just twice if one wasn’t satisfied and then a new one purchased. For living, buying a new house requires renovation; renovation materials and paints are all chemical products. There are also daily chemicals, such as detergents and cosmetics ； The casings of various electrical devices, such as those of smartphones, tablets, computers, and televisions, are all made of polymer materials. Cars wouldn’t function without rubber tires; riding in them would be extremely bumpy. Without gasoline or aviation fuel, cars and airplanes would also be unable to operate. It is the chemical industry that creates new substances and materials, which makes it possible to manufacture various consumer goods used in daily life; everyday life simply cannot do without them. Secondly, is the chemical industry low in terms of technology and knowledge? The entire industrial system involves processing natural resources into products that are needed by humans. To achieve this transformation, the following are required: natural resources, capital, knowledge and technology, and labor. Let’s analyze the degree of dependence of the chemical industry on each of these resources: Natural resources: Chemical processes require raw materials in order to transform substances. The chemical processes at the upstream end of the industrial chain use natural resources as raw materials, including minerals, oil, coal, natural gas, and even water and air. Apart from water and air, all other natural resources are under **control; it’s not possible to enter these upstream industries just by having money, such as oil refining and the petrochemical industry. Funding: The investment amount varies greatly depending on the scale of the facility. The investment in large-scale petrochemical projects is basically in the tens of billions. After checking several such projects, the Shenning 4 million-ton coal-to-oil project requires an investment of 55 billion yuan, while a project involving 10 million tons of oil refining along with 1 million tons of ethylene production requires a total investment of around 25 billion yuan. Putting aside these mega-projects, even ordinary chemical industry projects that are brought to fruition require hundreds of millions of dollars in investment – something that small business owners cannot afford to invest in or start. Knowledge and technology: Industrial production is different from laboratory chemical experiments; in industrial production, the primary goal is to make a profit, and to do that it is necessary to be able to produce products safely and efficiently. As we all know, some chemical reactions are toxic, flammable, and explosive; it is not easy to ensure that such reactions take place safely. Chemical production requires raw materials and energy, and the costs of these materials and energy account for over 90% of the total production costs. Only by making efficient use of raw materials and energy can profits be increased and money earned. Furthermore, in chemical production, not all raw materials are converted into products; a small portion becomes waste, wastewater, and exhaust gases. If these wastewater and exhaust gases are not handled properly and effectively, they will pollute our environment. This is also why the general public has complaints about the chemical industry ； It must be pointed out that the true image of the chemical industry is not one of emitting black smoke and black wastewater; these problems all have solutions, which are addressed during the design phase. Taking the chemical industrial park where I work as an example, wastewater and waste gas are treated separately based on their components, ensuring very thorough environmental protection. I work in the chemical industrial zone of Leverkusen in Germany; outside the fences are residential areas, and people live there in peace. I have also seen no residents gathering to demand that the industrial zone be closed. In our country, some unscrupulous enterprises shut down their environmental protection equipment in order to cut costs, and the relevant authorities fail to take action, which leads to the improper disposal of waste materials and subsequent environmental degradation. This harms the reputation of these industries, and normal business development faces resistance from the public; this is nothing but karma. To change public awareness, the industry must abide by the law, and relevant authorities must enforce the laws strictly and without exception. To ensure the safe, reliable, efficient, and environmentally sustainable operation of chemical enterprises, advanced theoretical knowledge and technical skills are required, as well as a complex management system. This entails expertise not only in chemistry but also in mechanical equipment, electrical and automation systems, environmental protection, industrial safety, and numerous other fields. Labor force: The chemical industry has achieved a high degree of continuity and automation, and production workshops basically no longer require workers. All production information and controls have been digitized and automated; operators only need to watch the computer screens in the control room to know the operating status of various devices, and can perform remote control when necessary. The scenario is essentially similar to that of the control room for Shenzhou spacecraft launches. A modern chemical plant that requires billions in investment might have only around 100 workers, which is something unimaginable in discrete industries like Foxconn’s. (All images in this article are from the Internet.) Chemical companies are the main clients of the industries related to industrial control, automation, and informatization. The chemical industry is well ahead in the field of intelligent manufacturing, having already achieved digitalization, informatization, and automation. Indeed, automation and informatization have greatly improved the production efficiency in the chemical industry, creating substantial profit margins. That’s the charm of the market: as long as there are profits and benefits, there’s no need for **promotion or push; entrepreneurs will take action right away. The chemical industry is able to achieve a high degree of automation because it adopted continuous production at an early stage. Continuous production is an advanced form of discrete industrial assembly line production; it represents true flow-based manufacturing, as materials and products flow continuously through pipes and equipment just like water. What is continuity? Taking a home water heater as an example, if it is a gas-powered heater, once you set the temperature, turning on the faucet will result in hot water flowing continuously. The water inlet, heating, delivery, and outlet processes in the water heater all occur simultaneously, and the heating element automatically adjusts the intensity of the flame to achieve the desired water temperature. This process is true streamlining, continuity, and automation. Intelligence lies in installing a sensor under the shower head that can identify the user, automatically set a temperature and water flow level that are comfortable for that user, and adjust the temperature and water flow as the shower progresses through different stages. For storage-type electric water heaters, one first needs to fill the heater with water, then start heating it; once the desired temperature is reached, the water can be used for bathing. Each step must wait for the previous one to be completed before it can proceed; this type of process is called a batch process. Cooking dishes is a typical intermittent process, carried out step by step, with products being produced batch by batch. I’ve heard, however, that there are also continuous cooking machines used in places such as canteens where a large amount of rice needs to be prepared; at one end of the machine, rice and water are continuously fed in, while at the other end, the cooked rice is continuously discharged. Of course, not all chemical production is continuous; companies that produce small quantities of various products still use batch processing, producing products one batch at a time. It’s not that continuous production is impossible; it’s just that it isn’t economical to carry out continuous production under these conditions. In summary, the technical complexity of certain chemical processes is on par with that of sending a Shenzhou spacecraft into space, which is also why some important chemical products or processes in our country cannot be produced domestically. We often say that the chemical industry is a capital- and technology-intensive industry. It seems that the chemical industry is by no means a low-level sector; its technical requirements and entry barriers are far higher than those of the popular IT industry. So, is the chemical industry a good career choice? It seems that the chemical industry requires a high level of technical expertise; it must be quite promising, right? Unfortunately, the chemical industry is an industry in decline. My answer is that chemistry (as well as other traditional engineering fields) is not a good career choice these days, although it was once as prosperous as the IT industry is today. Excess staff and average salary levels. For any product or service, the direct determinant of its price is the supply and demand relationship. If supply exceeds demand and competition is fierce, the natural price is low, and only a price that covers costs can be maintained ； Demand exceeds supply, so it naturally commands a high price. The vast majority of science and engineering universities in China have departments of chemistry and chemical engineering; I was unable to find information on the number of graduates each year. Conservatively estimated, at least 100 undergraduate institutions across the country offer these majors, resulting in around 20,000 undergraduate graduates in chemical engineering-related fields each year. What’s even more alarming is that China’s universities already had chemical engineering programs before the liberation; although the number of graduates in this field was not as high as 20,000 per year before the expansion of university enrollment, and even considering the period since exams were reinstated, it’s clear that a large number of chemical engineering professionals have been trained over the past 40 years. By the time these professionals started retiring, a substantial pool of such experts already existed in the market. On the other hand, the high level of informatization and automation in the chemical industry means that a factory only needs a small number of engineers to maintain stable production. The entire industry is already facing an oversupply of workers, so salary levels are generally low. Overcapacity and meager industry profits: After nearly 20 years of rapid development, China’s chemical industry now faces overcapacity and reduced investment. The characteristics of continuity and automation in chemical processing plants mean that the larger the capacity of a single plant, the lower the production cost per unit of product. As the facilities grow larger, overcapacity becomes inevitable. Overcapacity first leads to a decline in industry profit margins; if owners earn less, employees naturally earn less as well. Overcapacity leads to reduced investment; with no new factories being built, design firms and engineering companies lack new projects. Factories do not hire new employees, which further exacerbates the issue of overstaffing. On the contrary, in the IT industry, it is possible to start a business easily with just a computer connected to the Internet. As long as one person among a group has a good idea and creates a demo, someone will be willing to pay hundreds of millions to acquire it. What’s even more exciting is that mobile high-speed internet has fully integrated information technology into our daily lives; previously, the development of information technology had taken place primarily in the industrial sector ； Suddenly, the digitalization of life and business created a vast blue ocean with enormous commercial demand; this industry is clearly dynamic, and there is a shortage of skilled professionals. The last question: What is the future for the chemical industry? What are the career prospects for chemical engineers? First and foremost, it must be clear that although the chemical industry is a declining industry, this does not mean it will vanish just like the setting sun. Given the importance of the chemical industry as mentioned earlier, it remains extremely vital; without it, human society would cease to function immediately. A sunset phase refers to a situation where development has stabilized, with no more rapid progress, but there is still much potential for achievement in certain areas. The chemical industry can be divided into two categories, with vastly different prospects for each: basic chemicals: mature technology and overcapacity. Commercially, consolidation is achieved through mergers and reorganizations; in other words, a few giants emerge to monopolize the market, thereby avoiding fierce competition and ensuring appropriate profit margins ； Technically, profits can be increased through process optimization, the use of information technology to boost the production capacity and efficiency of individual units, and even by reducing the workforce. Functional new materials, as well as new energy materials and energy, are fundamental conditions for human development. At the heart of the Fourth Industrial Revolution lies customized production and personalized products. Society needs an increasing number of new products to meet its needs in daily life and entertainment, and new materials make it possible to manufacture these products. The rapid development of mobile electronic devices and new energy vehicles ensures huge potential for the growth of new energy batteries, and the chemical industry still has much to contribute in the field of new energy, particularly in the area of portable new energy batteries. For individuals, there are essentially two options in this industry: to leave or to stay. Young people should take the opportunity to change careers as early as possible, shifting to industries such as IT, mobile internet, and services that are directly oriented toward people, or moving towards sectors related to new materials and new energy. Older people no longer have the chance to change careers; they must wait for natural elimination or to succeed through natural processes. Those who can succeed naturally are certainly good enough; the flow of talent will bring new equilibrium to various industries, and income disparities will naturally decrease. For universities, it is truly necessary to adjust their program structures based on employment trends and market demands. Traditional engineering fields should reduce their enrollment levels, as professors are unable to produce research results and students struggle to find jobs. Finally, I would like to encourage my colleagues who are working on the front lines. If you take a look at the average salary gap between chemical engineers and IT engineers in Europe and the United States, there’s a website provided where you can check it out; it seems that their incomes are quite good. Germany: On a monthly basis, IT engineers earn 4,037 EURO, while chemical engineers earn 4,665 EURO. In the United States, on an annual basis, IT engineers earn 108,760 Dollars, and chemical engineers earn 103,960 Dollars. In fact, in any field, those who become experts can earn good incomes. There’s no way to escape it, so it’s better to work hard, study hard*, and improve one’s skills. The chemical industry is by no means an industry where it’s easy to make money.