Grangemouth petrochemicals business is at the crossroads warns chairman
Grangemouth site has lost over £150 million per year over the last four years making financial position unsustainable
The petrochemicals business at Grangemouth will close as early as 2017, without significant investment
INEOS petrochemicals UK chairman says, The petrochemical business at Grangemouth has reached a crossroads. Unless we reform our cost base and secure new gas raw materials the site will close.
Calum MacLean, the Chairman of INEOS Petrochemicals UK has today warned that its petrochemical business based at Grangemouth is at a crossroads, and faces closure unless investment into new source of raw materials are secured and the site addresses its high cost base.
North Sea gases, used as raw materials by the petrochemical site have declined by 60% in the last 10 years and the current site agreements with North Sea operators expires in 2017. With no additional raw materials, available locally, Grangemouth needs major investment to land gases from the US.
INEOS has successfully invested in new infrastructure at its Rafnes site in Norway allowing it to bring in gas from the US from 2015. The company would like to do the same thing at Grangemouth but the site’s lack of competitiveness makes the necessary investment impossible, without change.
INEOS has invested over £1 billion since taking over at Grangemouth in 2006 but – despite this investment – the company has lost over £150 million each year for the last four years, losses continue today at over £10 million per month. The site pension scheme is now around £200 million in deficit and pension costs are at an unsustainable 65% of salary.
Calum MacLean says: The petrochemical business at Grangemouth has reached a crossroads. Unless we reform our cost base and secure a new source of raw materials the site will close in 2017, when our gas contract expires.
ENDS
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