Chemical industry in Poland. What changes are coming? [Update 2021]

The chemical industry in Poland began to develop around 1918. It was at that time that the chemical industry was born and its intensive development occurred in the 1920s and 1930s. Another period of dynamic changes was again observed in the 1950s and 1970s.

Published: 8-01-2021
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The main factor that allowed the Polish chemical industry to expand was the start of the production of paints, varnishes and dyes as well as explosives. Another important event was the establishment of the state nitrogen industry in the 1930s. However, the largest increase was recorded in the 1960s, when the chemical industry grew 1.5 times faster than the total domestic industry. The reason for this situation was the emergence of new industries related to the development of organic and inorganic chemistry. More and more factories were built in Poland, and production began to meet the demand of consumers. This situation persisted until the early 1980s, when the pace of development of Polish chemistry decreased.

Characteristics of the chemical sector in Poland

The Polish chemical industry is the result of the work of qualified staff, working in various design offices and research laboratories. The innovative ideas of Polish scientists are very often a huge asset not only in the country, but also abroad. Those ideas are the subject of export, which allows the creation and implementation of modern technologies. For this reason, it is particularly important to establish and develop relationship between the scientific community and industry, which will have a positive impact on the development of the chemical sector.

Taking into account all the factories operating in the chemical industry, it is stated that the chemical industry in Poland currently has an insufficient range. The reason for these shortages is the insufficient budget allocated to the Polish industry annually. Consequently, low capital expenditure in this sector is the reason for outdated technologies, consuming a lot of energy, poor condition of devices for environmental protection, low efficiency and low competitiveness of production on global markets. However, the situation is beginning to improve and it is estimated that positive changes will be observed in the coming years.

Currently, the number of companies within the chemical industry investing in the construction of modern production installations is on the increase, and thus they are beginning to possess technologies at international level. In addition, Polish producers from the chemical sector implement modernization programs and introduce regulations limiting the consumption of raw materials and energy. All these changes mean that Poland is slowly catching up with its foreign competitors and is constantly strengthening its position in this sector.

Today, Poland can be called the leader of the chemical industry in the region of Central and Eastern Europe. According to the Central Statistical Office, the chemical sector in Poland employs around 300,000 people, which accounts for 11% of employment in the total industry within Poland. In 2010-2016, the growth rate of sold production of the chemical industry was 5.7%. It is over 2% more than in general manufacturing, compared to data for the same period of time. The Polish chemical industry is developing dynamically in comparison to the largest economies, not only European but also global. In recent years, the increase in sold production in Poland was much higher than in the USA, Germany or France, and only less than one percentage point lower than in China – the fastest growing country in the world.

Analysis shows that in Europe in 2016, the largest part of sales (39.9%) of chemical production was sold to producers of PVC and other plastic packaging. The following ones were: construction – 19.7%, motorization – 8.9%, electronics – 5.8%, and 3.3% – agriculture. It should be emphasized that none of these industries would work if it were not for raw materials and semi-finished products supplied by the chemical industry.

Digitization, ecology, shopping flexibility and the so-called sharing economy are becoming global trends in industry. The most important goals in the development of the chemical industry in Poland are the reduction of material consumption and energy consumption in production. An important aspect is also the environment, which is protected not only by means of innovative monitoring devices (e.g. for measuring the level of pollution), but also by increasingly restrictive legal regulations. Unfortunately, the development of the chemical industry is somewhat limited by the society, which, because of the fear of the threat posed by the production of chemicals, may hamper its development possibilities. This psychological barrier of the people forced Polish entrepreneurs to orient their development also to the eastern markets and markets of developing countries.

What changes await the chemical industry in Poland in 2019 and beyond?

Among the branches of the Polish chemical industry, for which the largest development is expected in the coming years, first of all construction is mentioned (including adhesives, paints, varnishes, plastics, asphalts), cosmetics and personal care, medicines and pharmaceuticals, and disposable medical equipment, agriculture and food industry (including fertilizers and plant protection products as well as additives and packaging). Experts predict that changes in the environmental protection industry will also contribute to the development of Polish chemistry, such as increasing efficiency in the field of water and wastewater treatment, natural waste management as well as the implementation of waste-free technologies.

The biggest breakthrough in the development of the chemical industry in Poland, which awaits us in the coming years, will be the development of refining, petrochemical and plastics processing industries. This is a very important step, as the basic raw materials for the entire chemical industry are natural gas and crude oil. The aim of this project is to intensively increase the production of fuels and petrochemical products that are to meet the needs of the entire national economy.

Another forecast for the coming years is the increase in the small-scale production of speciality products, which require exceptional methods of purification and conducting the process. These products are designed to meet the requirements of various sectors of the economy and have unique properties. Their most important advantage is high margin, in contrast to the group of products produced and sold on a large-scale (so-called commodities).

It is also obvious that the Polish industry will be computerized. Most machines and devices will operate automatically, and man will become the controller of devices. However, in order for this plan to become a reality, financial expenditures are needed, which currently do not exist. For this reason, the most likely scenario is the expansion based on ventures with foreign capital. It can be obtained in various types of development programs, as well as other forms that will attract foreign investors. The process should be supported by systemic and ownership changes – many companies will most likely be privatized or transformed into public limited companies.

Perspectives for the development of the chemical sector

The increase in energy and process efficiency is the result of positive changes that are observed in the chemical industry in recent times. This increase has resulted in a faster development of exports than imports leading to a trade surplus, which is another confirmation of the skilful use of the potential that lies in this sector. Due to the fact that the chemical industry plays a huge role in the Polish economy, it is necessary to support its development and start to perceive it as an industry that is concerned with the environment, creates new jobs and promotes innovation. Without changing the attitude, it will be difficult to use its potential, which is significant for the Polish economy.

Currently, in the world of flexible solutions, the Polish chemical industry is beginning to adapt as far as possible to the recipient. Therefore, the search for innovative solutions is necessary for the chemical sector to develop dynamically. The efficiency of production should be increased and some trends must be approached as a challenge posed by the consumer world. Nevertheless, the biggest challenge is to see such concept as a chance to improve its position, leading to a better future.

Difficult year 2020 and forthcoming revolutions in the chemical industry

2020 was a year of the COVID-19 pandemic, which caused the collapse of industrial markets. The chemical industry was confronted with challenges too. For many companies, this period meant changes in the planning, production, supply and other important business areas.

Disinfectants and components essential for the production of medical and pharmaceutical products proved one of the most sought-after product groups during the pandemic. Some companies even decided to transform their systems, adapting them to the production of disinfectants. These include PCC Exol S.A. Thanks to the adaptation of production lines to the new business, the Company could support health care by supplying disinfectants to hospitals, offices, schools and many other locations of public use. The pandemic made people aware of the important role in the economy played by chemistry, which provides essential raw materials and additives used in the production of medicines, medical products, detergents and personal hygiene products and many other necessities.

Albeit difficult, the period of pandemic has not stopped a buoyant growth of the chemical industry, which had to adapt quickly to new realities. The construction industry and plastics processing industry have been performing quite well. Among the topics important for the economy were also hydrogen technology, safety in the chemical industry, and one of the leading trends – sustainable development and the impact of the industry on climate change.

What’s ahead of us in 2021 and beyond?

As a result of the pandemic, chemistry has gained even more importance as a strategic industry for the entire economy. Businesses, producers, scientists and others in this field will continue to emphasise its value and the need for equal footing approach.

Looking ahead, we are going to face a new reality of new pro-environmental technologies, the emergence of which is determined by EU laws and internal directives of individual countries. The chemical industry has already played a strategic role in attaining climate objectives. This involves changes in energy policy or low-carbon development strategies. A discernible trend, which has been observed in the forecasts for the chemical industry, is the implementation of innovations, especially those pertinent to the assumptions of the Green Deal Programme – European Green Deal.

Sustainability constitutes a very important aspect for industry. Citizens are more and more aware of the risks of environmentally harmful activities. Respectively, it is vital to build an ecological image that has long been little associated with the chemical industry.

‘New Energy’ programme – implementation of innovative hydrogen technologies – is one of the major initiatives that are already on the table. The implementation of this initiative is scheduled to commence in 2021. This is to help the Polish chemical industry and make the sector more attractive. Companies are already planning to implement the use of hydrogen for ‘green energy’. This technology is aimed, among other things, at reducing the carbon footprint. The coming years will generally see the use of various types of renewable energy resources, which will have a positive environmental impact.

Strategic steps towards the digital transition are becoming a common household topic. The chemical industry is one of the most developed sectors that relies on modern technologies. The temporary trend has slowly turned into a stable strategy for most companies. Polish Chamber of Chemical Industry created its own project “Industry 4.0 – Chemistry 4.0”, designed to be a response to the development towards digitisation. The introduction of effective digital transformation in chemistry still requires a lot of work and activities at the stage of business processes, but also in terms of the mentality of employees and their involvement in work.

Companies are also introducing new solutions insofar as production and product safety. Human life appears the most important issue for each of us. That is why safety of chemical problems is so important. The immediate plan for many companies is to implement good practices in the field of process and transport safety.

The production of formulations and chemical additives for the modern construction industry, including ecological and passive construction will be keeping its momentum. The implementation of new, less environmentally invasive substances from the agrochemical group is also forecast. The priority for research and development work is already given to products with a high naturalness index, biodegradable, anti-allergic or vegan. No doubt, the subject of industrial development in the production and processing of plastics is still at the forefront. Once the pandemic is over, the industry will have to face up to the new reality with new experiences. Its key aspect will be human health and safety and a clean environment.

Will the chemical industry in Poland be up to these challenges? There are a lot of things going on in Poland, but there is still a lot to be done.

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