Bosses at Ineos have confirmed their petrochemical site in Grangemouth will definitely close in 2017 unless significant action is taken now.
In an exclusive interview with The Falkirk Herald, Calum Maclean, Ineos chairman of Olefins and Polymers Europe, said the hard facts were the plant would shut down in the next three years if it continues losing over £100 million every year.
According to Mr Maclean, the main reasons for the massive losses are the decline in North Sea petrochemical feedstocks and the site’s pension scheme deficit of £200 million, two issues Ineos are now working to address.
Mr Maclean said: “The plant has to become more cost effective. Ineos has invested £1 billion in the Grangemouth site since 2006, but over the last three years the whole site has been losing around £150 million annually and that is forecast to continue.
“The feedstock gas coming from the North Sea is declining. We have a modern asset in our petrochemical cracker, but it is only running at 50 per cent because of the lack of feedstocks.
“Unless we get alternative feedstock to supplement the North Sea supply then the petrochemical side of the business will not continue beyond 2017.”
Ineos are looking to source shale gas from the USA to solve this problem and get the cracker operating at 100 per cent, but this would require an investment of £150 million to prepare the site for that feedstock and a further £200 million to offset the losses while the required new tanker facility is being built.
If the shale gas contract is signed and the investment is put in place then Mr Maclean believes that will secure the future of the plant for at least the next 20 years. However, this needs to be combined with a change in the pension scheme, which currently runs at 65 per cent of employees’ salary.
“It’s got to the stage it is unsustainable,” admitted Mr Maclean. “We are talking to the union about that now.”
Unite is currently balloting members for strike over the firm’s alleged mistreatment of union member Stephen Deans and issues surrounding agency workers.
Gordon Grant, Ineos Grangemouth general manager, said: “We are not victimising Stephen Deans. We are carrying out an investigation into a matter and following our procedures.”
Pat Rafferty, Unite regional secretary, stated this was not the case, however, and Mr Deans had been discriminated against.
Mr Rafferty also said Calum MacLean’s interview with The Falkirk Herald this week was another example of Ineos “carrying out negotiations through the media” instead of around the table with union representatives.
He dded: “We have been very up front and extremely reasonable with Ineos about these issues and have offered to come in and have talks with them about the feedstocks and the future of the plant.”