Calachem: 100 jobs at risk as Grangemouth company enters into consultation with staff

Contract chemical manufacturer, CalaChem, has entered a six-week consultation period with its employees which could see the current workforce of 156 cut to around 50 by next summer.

It comes as the company moves out of contract chemical manufacturing – which is says is no longer sustainable - and into managing estates for tenants on its site.

Calachem said it would do everything it could to minimise compulsory redundancies.

Roles in the new organisation, additional training and voluntary redundancy packages would all be taken into account when reducing the head count.

The Earls Road based company blamed the loss of a major European contract, COVID disruption and overseas competition for its decision to cull the jobs.

It said it was “a difficult decision” to move away from chemical manufacturing.

Instead, the business will focus on estate management for current and future tenants on its site; the provision of energy, utilities, and waste management services; and health, safety, environmental and risk management services.

Colin Loudon, managing director, said: “Over the past few months, the board has been working tirelessly to develop a sustainable strategy for the business, and in the current climate we are forced to focus on the areas that are profitable.

“Unfortunately, this is not contract chemical manufacturing – through no fault of our talented workforce, some of whom have been with us for many years.

“An unfortunate sequence of external factors beyond CalaChem’s control, including loss of a major European contract, Covid-19 disruption, competition from overseas and required equipment investment have all had an adverse impact on our business.”He added: “CalaChem has a robust future, but this does not lessen the blow for the business and for affected employees. “

Over the past five years, chemical contract manufacturing sales at CalaChem have reduced, while the services business has grown.

The most significant loss of business came just as lockdown began – making replacement business development activity all but impossible.

The company said its future as a service business “far more robust future.”

It is the owner-occupier at Earls Gate Business Park in Grangemouth, delivering key services to other site occupiers including Syngenta, Fujifilm, Piramal Pharma Solutions, Celtic Renewables, and several off-site customers that send effluent for treatment on site.

Services provided include estate management, provision of utilities, effluent treatment, security and risk management.

CalaChem also provides environmental, health and safety and emergency services to on site customers.

The transformation to become a specialist services business creates “a solid platform for a revitalised business with growth and development opportunities” - and supporting the long-term viability of other businesses based at Earls Gate.

Once the business is stabilised in its new form, the leadership team said it will seek to harness new opportunities for sustainable growth that could come from the future rehabilitation of the decommissioned CalaChem site.

At 90,000 sq m, and with a state-of-the-art, highly efficient energy-from-waste plant already under construction on site, there exists a prime opportunity for the land to be used to create a green energy park for the increasing number of sustainable businesses that contribute to Scotland’s net zero targets.

Mr Loudon added: “There are significant opportunities in the making, but unfortunately just not in contract chemical manufacturing.

“Our actions now will secure a new foundation for a business built for the future, with sustainable business at its heart.

“That said, we are a tight-knit company, with a long history, many intertwined friendships and family ties. The actions we take now cannot be avoided but are not taken lightly. We will do everything in our power to live up to our responsibilities.”

CalaChem will retain staff up to and beyond next summer to complete current manufacturing contracts and to decommission the site.

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