Long-term factors and trends in the development of the Ukrainian chemical industry
Abstract
The chemical industry is an important industrial sector of the global economy and one of the main drivers of its innovative development. Today, the industry is searching for answers to modern climate, energy and technological challenges, working out the sectoral features of the digital transition, implementation of the sustainability paradigm.
The purpose of this paper is to analyze the current state of the Ukrainian chemical industry and define the prospects for its development under the influence of key long-term factors and trends.
We demonstrate that the national chemical sector is in a long-term downward trend caused by structural imbalances and a deep crisis of the long-standing model of chemical manufacturing. At the same time, several new positive trends and growth points, which can become the basis of the long-term development of Ukrainian chemical production, are evolving.
The author's conceptual approach to determining factors and trends in the development of the Ukrainian chemical industry includes: (1) highlighting of the great cross-industry importance of chemical production as a system-forming factor, (2) researching of key global megatrends and their influence as long-term national factors, (3) considering of internal and external dimensions of transformations, (4) analyzing of trend synergy and cross-industry synergy, (5 ) identifying of specific priorities by industry segments.
The driving power for long-term transformations of the chemical business is the mutually reinforcing influence of two global megatrends – the development of technologies of the fourth industrial revolution and the achievement of sustainable development goals. The long-term guidelines for the development of the Ukrainian chemical industry are related to digitalization, customization, circularity, climate neutrality, resource efficiency and cross-sectoral integration.
In this work, based on the analysis of the current state of the national chemical industry and its different segments, as well as the identification of determinants of long-term development, we outline several trends that have a long-term potential for implementation in Ukraine. These include such trends as creating of small-tonnage production of differentiated chemicals with an innovative component and import substitution potential; deepening the interaction of chemical manufacturers with consumers using digital platforms; developing of regional innovation ecosystems, boosting cluster initiatives and designing of smart specialization strategies with an emphasis on cross-industry integration; decarbonization, increasing of bio-based products, deepening of other ecological and safety components of production and consumption of chemicals; reforming the system of technical regulation of production and circulation of chemicals in accordance with the requirements of the European Union.
Keywords
References
Amosha, O. I., Shevtsova, H. Z. & Shvets, N. V. (2019). Prerequisites for smart specialization of Donetsk-Prydniprovsky macro-region based on chemical production development. Ekon. promisl., 3 (87), pp. 5-33. DOI: http://doi/10.15407/econindustry2019.03.005 [in Ukrainian].
Bulatova, O. V. (2015). Transformation of the world market in the conditions of global shifts: basic preconditions for development of the chemical industry. Naukovyi visnyk Uzhhorodskoho natsionalnoho universytetu. Seriia: Mizhnarodni ekonomichni vidnosyny ta svitove hospodarstvo, 3, pp. 46-50 [in Ukrainian].
Ishchuk, S. O. (Ed.) (2018). Challenges and prospects for the development of chemical industries in the regions of Ukraine. Lviv: Dolishniy Institute of Regional Research of NAS of Ukraine [in Ukrainian].
Vyshnevsky, V. P., Viietska, O. V., Viietskyi O. A. and etc. (2019). Smart industry: direct formation, problems and solutions. In V. P. Vyshnevsky (Ed.). Kyiv: Institute of Industrial Economics of the NAS of Ukraine [in Ukrainian].
Derkach, T. (2020). The role of the chemical industry in the economy of Ukraine. Ekonomichnyi chasopys Skhidnoievropeiskoho natsionalnoho universytetu imeni Lesi Ukrainky, 1, pp. 49-63. DOI: http://doi/10.29038/2411-4014-2020-01-49-63 [in Ukrainian].
Ishchuk, S. O. & Sozanskyy, L. I. (2019). Challenges and prospects of the Ukrainian chemical industry. Ekon. promisl., 1 (85), pp. 65-81. DOI: http://doi/10.15407/econindustry2019.01.065 [in Ukrainian].
Kaniuka, I. V. (2017). Industrial parks in Ukraine: no illusions. Khimichna promyslovist Ukrainy, 1, pp. 3-11 [in Ukrainian].
Koval, L. P. (2018). Clustering of regions of Ukraine according to the potential of chemical industry development. Sotsialno-ekonomichni problemy suchasnoho periodu Ukrainy. 5, pp. 37-43 [in Ukrainian].
Kovenia, T. V. (2022а). Chemical industry and chemical market of Ukraine in 2021: facts, state assessment, trends, forecast. SE "Cherkasy NDITEKHIM" [in Ukrainian].
Kovenia, T. V. (2022b). Analytical assessment of the situation in the chemical industry of Ukraine in 2022. Macroeconomic and sectoral dimensions. SE "Cherkasy NDITEKHIM" [in Ukrainian].
Maslosh, O. (2017). Modern issues of the strategic development of paint and varnish production in Ukraine. Ekonomichnyi visnyk Donbasu, 1 (47), рр. 101-105 [in Ukrainian].
Pokrovska, N. M. (2021). Current investment trends of chemical enterprises of Ukraine. Naukovi zapysky Lvivskoho universytetu biznesu ta prava. Seriia ekonomichna. Seriia yurydychna. 29, рр. 167-175. DOI: http://doi/10.5281/zenodo.5718394 [in Ukrainian].
Shvets, N. V. (2017). Current trends and features of innovative development of the world chemical industry. Visnyk Skhidnoukrainskoho natsionalnoho universytetu imeni Volodymyra Dalia. 10, pp. 144-149 [in Ukrainian].
Shvets, N. V. (2020). Issues of chemical cluster formation in the context of the implementation of smart specialization approach in Dnipropetrovsk region. Ekonomichnyi visnyk Donbasu, 3 (61), pp. 70-79. DOI: http://doi/10.12958/1817-3772-2020-3(61)-70-79 [in Ukrainian].
Shevtsova, H. Z. (2017). Chemicals 4.0 as a sectoral concept of implementation the foundations of the fourth industrial revolution. Ekonomichnyi visnyk Donbasu. 2 (48), pp. 35-41 [in Ukrainian].
Shevtsova, H. Z. (2020). Current trends and priorities of the European chemical industry’s development: an analytical review. Visnyk ekonomichnoi nauky Ukrainy, 2 (39), рр. 36-45. DOI: http://doi/10.37405/1729-7206.2020.2(39).36-45 [in Ukrainian].
Shevtsova, H. Z. & Shvets, N. V. (2017a). Research of the current factors influencing the development of chemical manufacturing within the neo-industrial context. Ekon. promisl., 3 (79), pp. 39-57. DOI: http://doi/10.15407/econindustry2017.03.039 [in Ukrainian].
Shevtsova, H. Z. & Shvets, N. V. (2017b). Clustering of the chemical industry: European experience and lessons for Ukraine. Visnyk ekonomichnoi nauky Ukrainy, 2, pp. 103-109 [in Ukrainian].
Shovkun, I. A. (2020). Dependence of Ukrainian economy on industrial import and prerequisites of forming effective industrial specialization. Ekon. promisl., 3 (91), pp. 5-28. DOI: http://doi/doi.org/10.15407/econindustry2020.03.005 [in Ukrainian].
Yakubovskyi, M. M. & Soldak, M. O. (2017). Choosing structural accents of Ukraine’s industry development activization. Ekon. promisl., 2, pp. 5-21 [in Russian].
ACC (2022). Guide to the Business of Chemistry. 130 p.
Arbolino, R., Boffardi, R. & Ioppolo, G. (2020). An insight into the Italian chemical sector: How to make it green and efficient. Journal of Cleaner Production. 264, 121674. DOI: http://doi/10.1016/j.jclepro.2020.121674
Axon, S. & James, D. (2018). The UN Sustainable Development Goals: How can sustainable chemistry contribute? A view from the chemical industry. Current Opinion in Green and Sustainable Chemistry. 13, pp. 140-145. DOI: http://doi/10.1016/j.cogsc.2018.04.010
Blum, C., Bunke, D., Hungsberg, M., et al. (2017). The concept of sustainable chemistry: Key drivers for the transition towards sustainable development. Sustainable Chemistry and Pharmacy. 5, pp. 94-104. DOI: http://doi/10.1016/j.scp.2017.01.001
Budde, F., Ezekoye, O., Hundertmark, T. and etc. (2017). Chemicals 2025: Will the industry be dancing to a very different tune? McKinsey&Company. Retrieved from https://www.mckinsey.com/industries/chemicals/our-insights/chemicals-2025-will-the-industry-be-dancing-to-a-very-different-tune
CEFIC (2019). Molecule Managers - A Journey into the Future of Europe with the European Chemical Industry. Welcome to 2050! 64 p.
CEFIC (2020). Landscape of the European Chemical Industry 2020. 140 p.
CEFIC (2022). The European Chemical Industry. A Vital Part of Europe’s Future. Facts & Figures 2022. 24 p.
Deloitte (2017). Chemistry 4.0 - Growth through innovation in a transforming world. Retrieved from https://www2.deloitte.com/content/dam/Deloitte/global/Documents/consumer-industrial-products/gx-chemistry%204.0-full-report.pdf
Deloitte (2020). 2021 Chemical industry outlook. Retrieved from https://www2.deloitte.com/content/dam/Deloitte/us/Documents/energy-resources/us-2021-chemical-industry-outlook.pdf
Du Plessis, F. (2020). Improving competitiveness of European chemical industry clusters. CEFIC, European Chemical Site Promotion Platform. Retrieved from http://ec.europa.eu/DocsRoom/documents/11988/attachments/1/translations/en/renditions/native
Falcone, P.M. & Hiete, M. (2019). Exploring green and sustainable chemistry in the context of sustainability transition: The role of visions and policy. Current Opinion in Green and Sustainable Chemistry. 19, pp. 66-75. DOI: http://doi/10.1016/J.COGSC.2019.08.002
Falter, W., Langer, A., Wesche, F., & Wezel, S. (2020). Decarbonization strategies in converging chemical and energy markets. Journal of Business Chemistry. 17 (1), pp. 19-40. DOI: http://doi/10.17879/22139481097
Fernandez, L. (2022). Forecast on global annual chemical industry production growth by region 2020-2025. Statista. Retrieved from: https://www.statista.com/statistics/407861/forecast-for-annual-growth-in-chemical-industry-worldwide-by-region/
ICCA (2017). Global Chemistry Industry Contributions to the Sustainable Development Goals. Retrieved from: https://chemical.report/Resources/Whitepapers/5f047582-7715-4655-a0a0-c3d4e20e0210_Global-Chemical-Industry-Contributions-to-the-UN-Sustainable-Development-Goals.pdf
ICCA (2019). Long-Range Research Initiative. Global Research Strategy. Advancing Chemical Safety Assessment for the 21st Century. Retrieved from: https://icca-chem.org/wp-content/uploads/2020/05/LRI-Global-Research-Strategy-Advancing-Chemical-Safety-Assessment.pdf
Ishchuk, S., & Koval, L. (2019). Development of chemical industry in Ukraine and the world: comparative estimation. Journal of European Economy, 18 (2), pp. 270-284. DOI: http://doi/10.35774/jee2019.02.270
Kätelhön, A., Meys, R., Deutz, S., et al. (2019). Climate change mitigation potential of carbon capture and utilization in the chemical industry. Proceedings of the National Academy of Sciences of the United States of America, 116 (23), pp. 11187-11194. DOI: http://doi/10.1073/pnas.1821029116
Keller, W. & Bette, N. (2020). Shaping digital sustainable development in chemical companies. Journal of Business Chemistry. 17 (1), pp. 9-18. DOI: http://doi/10.17879/22139568338
Ketels, C. (2007). The Role of Clusters in the Chemical Industry. Report (Prepared for the Annual Conference of the European Petrochemical Association). Retrieved from: https://irp-cdn.multiscreensite.com/bcb8bbe3/files/uploaded/doc_3770.pdf
Kircher, M. (2021). Reducing the emissions Scope 1-3 in the chemical industry. Journal of Business Chemistry. 18 (1), pp. 2-8. DOI: http://doi/10.17879/88069570495
Klei, A., Lorbeer, Ch. & Weihe, U. (2021). Adapting your operating model to the next normal: The next big move in chemicals. McKinsey&Company. Retrieved from: https://www.mckinsey.de/industries/chemicals/our-insights/adapting-your-operating-model-to-the-next-normal-the-next-big-move-in-chemicals
Knop, J. (2016). Chemistry 4.0. Challenges and Solutions for the Digital Transformation. Croatica Chemica Acta, 89 (4), pp. 397-402. DOI: http://doi/10.5562/cca3132
Martin, H. (2020). The scope of regional innovation policy to realize transformative change - a case study of the chemicals industry in western Sweden. European Planning Studies, 28 (12), pp. 2409-2427. DOI: http://doi/10.1080/09654313.2020.1722616
Matlin, S. A., Mehta, G., Hopf, H., & Krief, A. (2015). The role of chemistry in inventing a sustainable future. Nature Chemistry, 7 (12), pp. 941-943. DOI: http://doi/10.1038/nchem.2389
Meincke, H., Nickel, J.-P., & Westerheide, P. (2018). Chemistry 4.0 - growth through innovation in a transforming world. Journal of Business Chemistry, 15 (1), pp. 42-53. DOI: http://doi/10.17879/09179496834
OECD (2020). Benefits from implementing a chemical management system. Retrieved from https://www.oecd.org/chemicalsafety/benefits-from-implementing-a-chemical-management-system.pdf
Ou, H. & Zou, T. (2015). The application of digital factory in domestic chemical industry. The 27th Chinese Control and Decision Conference (2015 CCDC), Qingdao. pp. 4305-4308. DOI: http://doi/10.1109/CCDC.2015.7162686
Paulus, J. (2021). Is the EU Green Deal channelling a transition towards a sustainable chemical industry? Journal of Business Chemistry, 18 (3), pp. 96-104. DOI: http://doi/10.17879/06039560232
Peleman, S. (2019). A holistic framework and development agenda for an accelerated transition towards a sustainable chemical industry. Journal of Business Chemistry, 16 (3), pp. 165-179. DOI: http://doi/10.17879/93159804669
Pidorycheva, І. & Antoniuk, В. (2022). Modern Development Trends and Prospects for Innovation in the Technology-Intensive Sectors of Ukraine’s Industry. Science and Innovation, 18 (1), pp. 3-19. DOI: http://doi/10.15407/scine18.01.003
Richnák, P., & Čambalíková, А. (2021). Using Industry 4.0 concept in Slovak chemical industry. Industry 4.0. VI (3), pp. 106-109.
Roland Berger (2015). Chemicals 2035 - Gearing up for Growth. Roland Berger GMBX. Munich. 16 p.
Roland Berger (2017). Digital Readiness in Chemicals. Roland Berger GMBX. Munich. 16 p.
Shevtsova, H., & Maslosh, O. (2019). Chemical production modernization in the formative phase of Industry 4.0: study of trends and problems of investment support. Technology audit and production reserves, Vol. 1, No. 4 (45), pp. 30-37. DOI: http://doi/10.15587/2312-8372.2019.157152
Shevtsova, H., Shvets, N., & Kasatkina, M. (2020). How Leading Global Chemical Companies Contribute to Industry 4.0. 2020 61st International Scientific Conference on Information Technology and Management Science of Riga Technical University. Riga. Latvia. pp. 1-6. DOI: http://doi/10.1109/ITMS51158.2020.9259317
Shevtsova, H., Shvets, N., Kramchaninova, M., & Pchelynska, H. (2020). In Search of Smart Specialization to Ensure the Sustainable Development of the Post-Conflict Territory: the Case of the Luhansk Region in Ukraine. European Journal of Sustainable Development, 9 (2), 2020, pp. 512-524. DOI: http://doi/10.14207/ejsd.2020.v9n2p512
Spelman, M., Gomez, F., Weinelt, B., et al. (2017). Digital Transformation Initiative. Chemistry and Advanced Materials industry. World Economic Forum. Assenture. 40 p.
Stavenhagen, M. (2020). Combine or combust? - Circular economy, digitalization and collaboration models for the new chemical Industry 4.0. Journal of Business Chemistry, 17 (2), pp. 70-82. DOI: http://doi/10.17879/91129604615
Stork, M., de Beer, J., Lintmijer, N., den Ouden, B. (2018). Chemistry for Climate: Acting on the Need for Speed. Roadmap for the Dutch Chemical Industry towards 2050. VNCI, Berenschot, Ecofys. 52 p.
UNEP (2019). Global Chemicals Outlook II. From Legacies to Innovative Solutions: Im-plementing the 2030 Agenda for Sustainable Development. 700 p.
UNEP (2020). Green and Sustainable Chemistry: Framework Manual. 106 p.
Venkat, S. (2019). Green Chemistry and Sustainability: Grand Challenge for Chemical Industry. Our Heritage, 68 (12), pp. 154-161.
Venkata Mohan, S., & Katakojwala, R. (2021). The circular chemistry conceptual framework: A way forward to sustainability in industry 4.0. Current Opinion in Green and Sustainable Chemistry, 28, 100434. DOI: http://doi/10.1016/j.cogsc.2020.100434
Yang, J., Li, L., Liang, Y., et al. (2022). Sustainability performance of global chemical industry based on green total factor productivity. Science of the Total Environment. 830, 154787. DOI: http://doi/10.1016/j.scitotenv.2022.154787
DOI: https://doi.org/10.15407/econindustry2022.02.025
Refbacks
- There are currently no refbacks.