Basic Industries



Essentially, according to Cambridge dictionary, Basic industry is a type of industry that produces materials that are supplied to other industries, and which is important in a country's economy. Basic Industries includes a range of sectors, including:

Building products and construction materialsCapital goods, equipment and machineryChemicalsMetals and mining, industrial materials and other natural resourcesOther manufacturing, distribution and service industriesPaper, packaging and forest products

Basic industries are which supply their products or raw materials to manufacture other goods. Examples: Iron and steel, copper smelting and aluminium smelting industries.

Basic Industries




What are Basic Industries?

Basic or key industries supply their products to other industries as raw materials for those industries so that other goods can be made. Some examples of basic industries are iron and steel industry, copper smelting, aluminum smelting, etc. The iron and steel industry provides steel as a raw material for other industries such as the automotive industry. Basic industries are the industries that provide other industries with raw materials so that they can operate and manufacture other products.


The primary industry, also called the base, is the industry responsible for the extraction and processing of raw materials from their primary phase, thus creating semi-finished products that will later be used by other industries to produce end products intended for consumption.


In general, these are heavy industries as they consume very large amounts of raw materials. In addition, given the amount of resources responsible for transformation, this type of industry typically requires very large capital investments.


Properties
In relation to this type of industry, there are a few issues to consider. Despite the wide variety of products and services that come from the primary industry, there are a few things in common:

Raw material
The vast majority of these industries are characterized by working with different raw materials in the initial phase.

Semi-finished products
Basic industries are responsible for the manufacture of semi-finished products so that other industries can use them to make the final products.

Big investments, less competition
These industries specialize in the manufacture of heavy machinery and therefore the initial investment is very high. Very few companies are interested (or cannot afford) to enter this industry, with which there is little competition.

Highly qualified staff
While other simpler industries can survive and function with personnel of all levels, workers in these industries must be highly trained to work efficiently.

Ecological damage
Due to the amount of waste they generate, be it gases released into the air or waste that ends up in rivers, these industries are the ones that can pose the greatest environmental hazard.

Types of basic industries
The basic industries are very numerous; However, we can divide them into extractive, steel, metallurgical and chemical products.

Raw materials industry
As the name suggests, the raw materials industry is responsible for extracting raw materials directly from nature. Industries such as mining, oil, and timber fall into this group.




Mining basic industry

Mining is the industry dedicated to the extraction of minerals that are found directly in the ground or underground.

It can be divided into metallic and non-metallic or quarry mining. Metal mining is generally used for the production and manufacture of industrial products, while quarrying is often used for building materials, decoration, etc.

Examples of minerals (metal mining):

Gold.Silver.copper.Lead.

Examples of minerals (non-metallic mining):

granitemarbleClay.Esmeralda.Sapphire.



Oil basic industry

This large industry is dedicated to the extraction and extraction of oil, a non-renewable raw material that is widely used in the manufacture of various goods such as plastics or fuels such as gasoline. This industry divides its activities into three phases:

Upstream, dedicated to oil exploration and extraction.Midstream, the party responsible for the transportation, processing and storage of oil.Downstream, the final part that refines, sells and distributes the oil.

Despite its great utility and economic benefit for certain countries, this industry also has its risks. Since it is an insoluble liquid, cleaning it requires a lot of work and, when burned, it releases some gases that are harmful to the environment, such as carbon dioxide (CO2).

Basic Industries




Wood and paper basic industry

This industry is dedicated to the processing of wood: from its extraction (by planting and felling trees) to its subsequent transformation into products that are used in the manufacture of goods such as furniture or paper.

Product examples

celluloseconstruction material (wood)

The iron and steel industry is responsible for extracting iron ore for further treatment. In this way, they produce a wide variety of alloys from this material for later use in various industries.

One of the most common alloys manufactured by these industries is steel (ferrous alloy and carbon). The production of this material is very complex and takes place in the so-called integral steel mills and steel mills, which are exclusively dedicated to its production.

Product examples:

IronSteel tubesPubTrain tracksPipelines
Basic Industries




Metals basic industry

This industry is responsible for the extraction of metals from metallic ores. Unlike steel, metallurgy also applies to other minerals, not just iron (including copper, aluminum, titanium, bronze).

The production process is similar to that of steelmaking, but a wider range of minerals are processed, so we can say that the steel industry is a metallurgical company that specializes in iron and steel.

Product examples

metal sheet.zinc alloys.copper parts.TO





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2
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Rosenbaum and Pearl PDF Publisher: Wiley

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Fundamentals of Corporate Finance PDF
Fundamentals of Corporate Finance Publisher: Collins Business Essentials



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