THE Chemical Industry in the UK employs more than 250,000 highly-skilled people nationwide, and accounts for 2.5 per cent of the Gross Domestic Product.

It invests nearly £3bn annually, plus a further £3.3bn in research and development projects.

Products of the chemical industry form the basis of every manufacturing activity.

They are vital to transport, healthcare, food and drink, construction, IT and textiles, and all other sectors of the economy.

In particular, the industry can claim a major role in increasing human longevity and quality of life.

Life expectancy doubled in the last century, attributed to chemically-derived products such as antibiotics, but also improved water treatment, detergents and pesticides.

Despite its part in this achievement, the chemical industry cannot afford to rest on its laurels. Nothing stands still in today's world.

The increasing globalisation of the world chemical market continues apace.

Developing countries are increasingly grabbing their share of that market, with such countries expected to be responsible for about half the global growth in the chemical industry by 2010.

Multi-national chemical companies are continuing to develop their resources and products to serve global markets, rather than just their domestic ones.

In future, the most successful chemical companies are likely to be those that get involved in strategic alliances with other companies to form global giants.

They will also be the ones that invest the most in research and development, including training and developing their staff.

Successful chemical companies' willingness to continue to locate themselves in the UK is not automatic. Already on Teesside, ICI has been restructuring, selling off numerous operations to the likes of the US-based Huntsman Corporation.

For international companies to choose areas like Teesside for investment in the future, key issues will have to be addressed.

The Chemical Industries Association has outlined these issues as including:

* A secure supply of raw materials and utilities, such as energy resources, at competitive prices.

* Credible energy taxation. The Climate Change Levy as originally conceived, would have posed a major threat to the industry. But the changes made in 1999 have been welcomed by the industry.

* A helpful trading environment. Global markets operate best when freed from barriers.

* A competitive tax regime. The levels of tax experienced by chemical companies in the UK needs to be less than in competing countries.

* A stable currency. The CIA believes the industry will be helped by a stable currency, and to help trade, that currency should be the euro.

* A helpful labour market which supports the industries' need for continuous change. The way UK chemical industries manage their labour force is one way they stay ahead of the competition