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Past and future development of the chemical industry in the Basque province of Bizkaia

Contributed by: Elhuyar Foundation

Lecturer at University of the Basque Country Luis Ángel García studied the foundation of the Bizkaian chemical industry and its evolution into the 20th century. According to PhD thesis, location, infrastructure and middle classes were keys to development of chemical industry in the Basque province of Bizkaia.
The foundation of the La Dinamita factory (Galdakao, 1872) was a defining moment in the chemical industry in Bizkaia (the Basque province centered on Bilbao).

Basing itself on the patent obtained by Alfred Nobel five years before, it became the fifth most important dynamite factory in the world. It was the beginning of one of the most fruitful sector of the 20th century in the region.
With this as a starting point, Mr Luis Ángel García studied how and why the chemical industry developed in Bizkaia, including the reasons for its declinature.
His PhD, defended at the University of the Basque Country (UPV/EHU), is entitled History of the introduction and development of the Chemical Industry in Bizkaia.

The thesis takes on the history of the chemical industry from a technological and business perspective. Mr García individualised his research by focusing on 13 Bizkaian chemical companies. He based his PhD mainly on interviews with their workers.

<b>An industry that arrived later </b>

The arrival of the Bizkaian chemical sector came later than other industries mainly due to the high investment required. Financing was difficult to obtain, mainly due to the lack of demand for chemical products. At the early stages of industrialization, it can be concluded that most of the chemical factories were founded at a later date, comparatively to the already established, productive sectors.
It was the strategic location of Bizkaia with its logistics and transport infrastructure that were a decisive factor for the installation of the chemical industry in the province. Together with business activities of the Bilbao bourgeoisie actively sent delegates to Paris to convince Alfred Nobel to cede his patent in order to create the La Dinamita factory. This was reinforced by the interest of French investors, who were attracted by the commercial possibilities of the port of Bilbao and its railway network which communicated with the rest of Spain.

In fact, as with other enterprises a posteriori (Maderas & Alquitranes, Metalquímica del Nervión, and so on), La Dinamita benefited from its location, being close to the iron ore and coal mines for its production, from the infrastructure that enable it to cover the demand outside the province of Bizkaia.

<b>Rise in the 60s, drop in the 70s </b>

As far as the Bizkaian chemical sector in the 20th century, the 60’s was an important phase of expansion, with the growth of plastics, synthetic fibres and fertiliser sectors and, at a state-wide level, the cosmetics and detergents sector.
The crisis of the 70s, particularly affected the Bizkaian chemical sector (with factory closures and takeovers by multinationals), initiating a decline which, aggravated by the social response to environmental contamination and industrial relocation, has continued until today.

According to the thesis, in 1959 there were 11 Bizkaian chemical companies amongst the top 50 in Spain, five in 1973 and just one in 1997 (UEE, with head office in Madrid). It also points to the current crisis affecting the Bizkaian chemical industry, is also due to the downturn in the automobile and construction sectors and the falling out of the car sales market.

<b>Recycling companies - the future </b>

As a positive point, the thesis holds that this industry has a high degree of atomisation in Bizkaia; they are small enterprises but highly diversified in respect to specialisation, facilitating the search for their own market quota. It should also be remembered that the Bizkaian chemical industry has cut greenhouse effect gas emissions by 20 % and energy consumption over the past two decades.

With the future in mind, Mr García points to recycling companies (plastics, tyres, and so on) as heirs to that leadership of the Bizkaian chemical industry in the 21st century.

He makes special mention of the mechanical biological treatment plant that is expected to be inaugurated in 2012, as well as a future composting plant.

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