Chemical industry in Poland. What changes are coming? [Update 2023]

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 Consequently, low capital expenditure in this sector is the reason for outdated technologies, consuming a lot of energy, poor condition of devices for environmental protection, low efficiency and low competitiveness of production on global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.

The chemical industry is not slowing down! So what happened in 2021?

Every year, the chemical industry records growing interest as a key branch for development of the entire economy. Over the past two years, the COVID-19 pandemic has made it even more important in terms of supplies necessary for the medical and pharmaceutical industries. The increased production of disinfectants and industrial washing and cleaning products was also of key importance, as these products were used to support companies in their return to functioning as before this tough period.

However, as with others, the pandemic has also left its negative mark on the chemical industry in the form of the economic crisis. The struggle against its effects continues to this day, and according to forecasts, there is still a long way ahead before those effects are overcome.

It should be highlighted, however, that 2021 was not only about fighting the pandemic and its consequences, but it also witnessed further development of new technologies. The chemical industry focussed particularly on activities related to pro-environmental measures and solutions supporting digital transformation. This is associated with modern trends, but also a response to many legal regulations to which the industry has to adapt. In particular, industries such as construction, plastics processing, but also many others, have developed their portfolios in the context of these changes.

Our predictions concerning the past year have come true. So let’s think about what 2022 can bring us?

The future in green and other changes in the chemical industry

Ecology in chemistry

The chemical sector is one of the most developed industries in terms of introducing pro-environmental activities and technologies. Chemistry is an important pillar for the functioning of many industries, processes, and production of necessary devices and tools. This is why the chemical industry is seen as a key player in the worldwide environmental transformation.

Currently, it is important to adapt to the regulations of the European Green Deal. The process will be supported by various tools, including the “Fit for 55” package by the European Union. It includes a number of directives and proposed changes that are primarily related to the idea of sustainable development and decarbonisation plans. An important part of these changes also involves goals related to emission reductions, and therefore to increased use of renewable energy sources. The key role of the chemical industry in this area is emphasised, too, as it is responsible for production of basic raw materials and elements for the construction of solar panels or wind turbines.

We can observe the green revolution of the chemical industry through the example of companies such as the PCC Group, which is implementing more and more pro-environmental measures, and expanding the offer of ecological products. In its catalogue, we will find a number of ready-made formulations based on natural raw materials, but also products such as silicon tetrachloride or microsilica, which are an indispensable raw material for the photovoltaic industry.

Digital transformation

One of the key trends nowadays is innovation, which is followed by the introduction of modern technologies. The introduction of these solutions in the chemical industry shall be founded on digital transformation. In the long term, digitalisation-based innovations are aimed at increasing security, maximising profits and many other benefits.

Currently, we are dealing with the phenomenon of the fourth industrial revolution – Industry 4.0. At its roots, it involves the extensive use of networks, the Internet and data exchange to improve functioning. Therefore, the chemical sector, which is considered a precursor of modern trends, is also adjusting its activities to these changes.

The year 2022 heralds many changes in the chemical industry, which will bring new trends of development. Green transformation and digitalisation are some of the most important points of attention, but that’s not all. These activities are to ensure that the chemical industry, first of all, strengthens its competitiveness on the global chemicals market through modern solutions, unique products and other proposals that meet the expectations of consumers.

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.

2022: A Challenging Time for the Chemical Industry

The past year has been both an interesting and challenging time for the Polish chemical industry. For many companies, it was critical even, primarily due to high gas and energy prices, inflation, currency exchange volatility and fluctuating prices of raw materials for production. What were the underlying reasons? First of all, the uncertain macroeconomic and geopolitical situation related to the war in Ukraine and significant changes in regulations and legal requirements. These are only some of the challenges that the chemical industry faced in 2022.

Many companies were most affected by rising gas and energy prices as well as the impaired availability of certain raw materials. Decisions to temporarily restrict production of such substances as polyamide 6, caprolactam, ammonia or nitrogen fertilisers have had a significant impact on other sectors of the industry. It should also be noted that energy-related problems also affected Europe and other regions of the world. This resulted in soaring prices of raw materials and consumer products made from them.

The aforementioned regulations, mainly related to green transformation and digitisation, brought significant changes to which the chemical industry had to adapt. One of such regulations is the EU “Fit for 55” package that imposes a range of directives, related to introducing sustainable changes and achieving low-carbon emission targets, to companies. These changes also affected chemical companies and require them to adjust their manufacturing systems to sustainable chemistry principles and to make greater use of energy from renewable sources. The chemical industry is considered a key sector for the operation of the entire economy. This is why it is so important to make changes to the implementation of technologies and the manufacture of products with reduced impact on the environment as well as human health and life.  It is expected that safe, sustainable chemistry becomes the driving force for the “green transformation” of the industry.

It is worth to mention that this revolution is a good step towards the independence of the chemical industry and its energy security. The war across our eastern border has clearly demonstrated the importance of making industry independent of the world’s energy tycoons in terms of energy supplies, as well as the availability of raw materials. Investing in access to renewable energy sources and own power plants is a long-term strategy that can bring numerous benefits and is becoming a requirement for Polish companies as well.

Despite the said difficulties, the chemical industry continues to grow. Global economic growth means an increasing demand for chemicals that are the basis for manufacturing many end products. Rapid adaptation to current regulations, started by some companies such as the PCC Group, ensures a competitive edge on the market and enables to maintain stable operations even in the face of social, economic and political crises.

Digitisation and the energy revolution: the chemical industry’s development trends

Digital chemistry

The developments related to the ongoing industrial revolution – Industry 4.0 – have been present ever since 2021. The use of innovative online solutions and automation is aimed, among others, at making data exchange faster and more effective, and at accelerating processes and making them more efficient through digitisation and automation.  These innovative trends are expected to bring forth more affordable and efficient workflows that will translate into the maximisation of profits. However, companies still report gaps in their competences connected to the implementation of digital solutions, and also concerns about digitisation and robotisation. The concerns are mainly related to people being replaced by robots and the challenges of this costly change.

However, it is important for the digital revolution to consider not only its costs but also its potential benefits. It is also worth to think about security and ways to use human capital and find opportunities for its development, as well as efficient ways to use it in the business.

Green energy

The energy crisis has affected virtually every area of the European industry, including the chemical sector. This has resulted in economic instability and turbulence in the raw materials market. This is a major problem that makes it difficult for many companies to maintain production, let alone meet obligations related to the green transformation or other regulations.

Therefore, aiming for energy independence, for example by using renewable sources, having an in-house energy infrastructure or investing in transmission networks, is considered a major goal in the strategy for the chemical sector. Also, the importance of regulators listening to the arguments of entrepreneurs and adapting the existing directives to the current situation is emphasised.

It should also be remembered that chemical companies are major producers of basic raw materials and components necessary for the construction of wind turbines or solar panels, among others.This means that the availability of structures enabling to obtain renewable energy depends on the development of the chemical sector. All the more important is listening to the needs of the Polish chemical industry and to find a middle ground for the existing requirements and regulations.

It may therefore be said that 2023 is a year for making major changes in terms of understanding and implementing processes of digitisation and automation, and for focusing on solving energy consumption issues.

Equally important are further steps towards sustainability of the chemical industry. Consumers are increasingly aware of climate risks and the related dangers. In line with it grow their expectations towards manufacturers that must now compete not only in terms of quality or prices of their products but also their environmental features, including low emissions in particular.

These activities are aimed at ensuring that the Polish chemical industry maintains its high position in the global market, but above all at providing security in the context of the economic crisis and ensuring the continued supply of high-quality products that are essential for the operation of other industries and the supply of basic products necessary for our everyday life.

It is a difficult time for the chemical industry in Poland. Will it be able to face these challenges? What else does 2023 have in stock for us? We will find out very soon.