The discovery of petroleum deposits, and the development of processes for separating petroleum into its chemical components, however, provided the greatest impetus for the development of the chemical industry.
Early chemical industry development was strongest in Western Europe; however, strong growth also soon developed in North America. Even in the early#1990s, the greatest strength in the global chemical industry is in Western Europe, where seven of the world's top 10 chemical manufacturers are located (BASF, number one, Germany; Hoechst, number 2, Germany; Bayer, number 3, Germany; Imperial Chemical, number 5, Britain; Montedison, number eight, Italy; Rhone#Poulenc, number nine, France; and Royal Dutch Shell, number 10, The Netherlands and Britain). The remaining three firms in the top 10 are located in North America (Du Pont, number four, United States; Dow Chemical, number six, United States; and Union Carbide, number seven, United States).
Sophisticated and capital intensive production processes are required for the manufacture of chemical products. These processes are costly in the consumption of energy and water, and they pose significant risks for the physical environment. Economies of scale are significant in the basic chemical industry. For that reason, most firms which survive in the basic chemical industry become very large firms.
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