An engineering firm claimed its decision to end a contract with Ineos cost it £1.25 million in profits.
The Cordell Group, based in Stockton, took the decision to end its deal with the petrochemical giant following last year’s industrial action and shutdown at the Grangemouth site.
The company recently published its accounts for the 17 months from August 2012 to the end of 2013. According to the published figures, positive signs of growth in all sectors were marred by a significant loss in profits caused by the ending of the Ineos contract.
Cordell Group finance director Nigel Park said trading within the group’s Scottish subsidiary Cordell Engineering Services Ltd had been difficult due to the situation at Grangemouth near the end of 2013 and this led to directors deciding to leave the site.
He said: “The board of directors took the decision to exit the contract. A tough decision, but ultimately one that has proven to be well founded. The group recorded pre-tax profit of £281,000 – a figure reduced by £1.25 million through costs arising from the contract loss.
“Without this exceptional item profit before tax would have been £1.53 million. This is bitterly disappointing but delivered many valuable lessons that have now been implemented.”
Looking to the future the firm said it started 2014 in a good position despite “known, but manageable” problems within its Scottish operations.
Ineos had not made any comment on the Cordell Group’s announcement as The Falkirk Herald went to press.
A year ago Ineos stated the Grangemouth plant was making losses and offered a survival plan requiring employees to accept new employment terms and conditions and pensions. Employees initially rejected this offer and the company stated the site would close.
Union Unite eventually accepted the survival plan put forward by management and it was announced the plant would remain open with the union also agreeing to take no strike action for three years.
Ineos is now looking to import relatively cheap shale gas from the US and store it at Grangemouth to help secure the future of the site.