Melbourne's chemical industry began, like that of so many other cities, with the processing of animal products. Bones were cleaned, dried and crushed to make bone dust fertiliser, and tallow derived from this cleansing, or from boiling down, was used to make soap and candles. The production of sulfuric acid, which began in the 1860s and continues to be a staple product of the chemical industry, enabled bone dust (later superseded by phosphate rock) to be converted to the artificial manure known as superphosphate. Sulfuric acid was also used in the production of stearine candles, in the soft drink industry (producing carbon dioxide for fizzy drinks), and in the production of other acids. One of these, nitric acid, could be used together with sulfuric acid and glycerine to produce the explosive nitroglycerine, a process commenced at Deer Park in the 1870s.
Because of the interconnections which characterised the industry, and because housing preferences were directed to Melbourne's east, most chemical industry grew up in the western suburbs, first at South Kensington, then at Yarraville, West Footscray, Deer Park and latterly at Altona. Adjoining the Cuming Smith acid-fertiliser factory on the west bank of the Yarra River were the sugar refinery of Colonial Sugar (CSR) and a second acid-fertiliser plant established by the Mount Lyell company to make use of iron pyrites separated from copper ores in their Tasmanian operations. Some remnants of the industry remained closer to the city, including J. Kitchen & Sons' soap factory in Port Melbourne, but its successor, Cussens, now operates in South Dandenong, having moved out from its original Collingwood location.
Rationalisation of the acid and fertiliser industry proceeded in stages until, in 1927, the forces acting on the world's chemical industries were felt in Australia, leading to the formation of a local subsidiary of Imperial Chemical Industries (ICI). The formation of ICI, and its subsequent cartel arrangements with IG Farbenindustrie AG (Germany) and Du Pont (USA), locked Australia into the British sphere of influence until the 1960s. Leading up to World War II, however, ICIANZ responded to government pressure for home-based production, installing a synthetic ammonia plant operating at high pressures at Deer Park. Some ammonia was converted by catalytic oxidation to nitric acid, providing an alternative route to this substance for the explosives industry at Deer Park. Ammonia and nitric acid were also combined to make ammonium nitrate, which found application as a fertiliser, and when mixed with fuel oil as the safe explosive ANFO. As far back as 1918, Mt Lyell had installed electrolytic cells for production of caustic soda and chlorine at Yarraville, and this operation became part of ICIANZ before it moved to Laverton under the banner of the company's successor, Orica.
The next major development followed the decision of the Australian government to foster petroleum refining from imported crude. In 1949 a refinery was established at Altona, and while its major product was gasoline for motor cars, there was a substantial by-product stream of gases like ethylene which were taken up in a strip of petrochemical plants (subsidiaries of international companies) extending to the west of the refinery. Although changes in ownership and product lines have occurred, this area is still the heart of Victoria's polymer and plastics industry. Some gases are piped to West Footscray for Huntsman Chemicals, successors to Monsanto who first established the plant to manufacture aspirin and synthetic resins. Local production of many products is augmented by importation of finished and raw materials, the latter being held upon arrival at Geelong or Coode Island, from where they are distributed by road tankers.
Victoria's chemical storage regulations were revised after a number of fires involving stored chemicals, and stress is now placed on segregation of incompatible chemicals and on provision of on-site retention of water which may result from emergency procedures. Storage and transport of chemicals in Melbourne are subject to the Dangerous Goods Act 1985 and the Environment Protection Act 1970, but there are a number of other Acts covering Agricultural and Veterinary Chemicals (1992, 1994), Drugs Poisons and Controlled Substances (1981), Road Transport (Dangerous Goods) (1995) and the Health Act (1958). Also relevant is the Australian Code for the Transport of Dangerous Goods by Road and Rail, and the obligations incurred by companies under the National Industrial Chemicals Notification and Assessment Scheme (NICNAS). Victoria requires colour- and letter-coded HAZCHEM signs to be displayed where chemical materials are stored, to facilitate emergency procedures. The Victorian Acts are administered by the Victorian WorkCover Authority under the Dangerous Goods (Storage and Handling) Regulations 1989 Statutory Rule No 323/1989. This extensive document is interpreted in kits and brochures which are available from WorkCover. In addition, manufacturers and suppliers are required to ensure adequate product labelling and to provide Material Safety Data Sheets. Chemical wastes come under the works approval and licensing provisions of the Environment Protection Act 1970, which has also been applied to the phase-out of ozone-depleting substances and to management of scheduled wastes such as polychlorobiphenyls.