The challenges for chemical-intensive industries, including the producers of personal care products, in the 21st century are as great as those faced by almost any industry. The chemical industry, which has been effective in supplying a diverse range of intermediates and formulation components largely based on low-cost petroleum feedstock, is now under pressure to change the way it operates. The drivers for change affect all aspects of production, notably feedstock, manufacturing processes and the choice and key design features of products.
While the impact of increasing oil prices on the cost of transportation and heating fuels is frequently and often dramatically publicized, the effects on other oil-dependent industries and their downstream users receive less attention. Some 20% of the petroleum used in the European Union (EU) goes into chemical manufacturing such as feedstock and energy, and more than 90% of the organic chemicals used today are oil-derived.
To add to the problem of increasing costs, the industry also faces concerns over reliability of supply due to the demand from rapidly growing chemical industries in areas such as China. When the price of phenol, a major building block petrochemical, tripled in 2005, the price hike could be attributed to both oil price increases and demand from the growing industries of the East.