Since the 1970s, the chemical industry had been one of Spain's largest, and it continued to grow in the 1980s. By the mid-1980s, it accounted for about 7 percent of the Spanish work force and 8 percent of the country's total industrial production. With its share of exports at about 10 percent of the nationaÍÍÍÍl total, it was the third-largest export industry. In 1985 chemical exports stood at US$1.8 billion, increasing by a further 16 percent in 1986. The Spanish chemical industry had received a substantial amount of foreign investment capital and new technology, and in 1987 about 30 percent of its output came from foreign-owned companies. Although many of it's raw materials, including those for petrochemical production, had to be imported, the industry benefited from Spain's deposits of pyrites, potash, and mercury. The largest components of the chemical industry were those producing plastics, petrochemicals, pharmaceuticals, rubber manufactures, fertilizers, paints, and dyes. All of these areas registered substantial gains in the 1980s.

As part of its policy of merging Spanish firms into larger entities better able to compete with foreign companies, the government prodded the country's largest chemical firm, Rio Tinto Explosives, to merge with the second-largest such enterprise, Cros, in 1988. By the time the merger occurred, sizable portions of both companies were controlled by the Kuwait Investment Office (KIO), which managed both public and private Kuwaiti funds. The fertilizer interests of the two companies were combined to form a new company, Fosforico Espanol, and Rio Tinto ceded its considerable defense interests.

Data as of December 1988