Two Teeside chemical plants to close

Thousands of jobs are at risk after two chemical companies announced plans to close plants on Teesside.

The Dow Chemical Company (Dow) blamed the recession for its decision to close its ethylene oxide and glycol (EO/EG) plant at Wilton.

Croda International Plc (Croda), which relies upon EO manufactured by its neighbour as a core raw material, said it too would be forced to close its Wilton facility. Dow's Wilton plant is the only chemical site in the UK that produces EO.

Both facilities are due to shut by the end of January 2010, with the immediate loss of up to 260 jobs. A Dow spokesman blamed rising costs and a drop in demand due to the recession for the closure.

The Unite union warned that "the closure of such a strategically vital plant could trigger a crisis across the chemical industry, with job losses snowballing to over 3,000 in total throughout the sector". 

Croda International said it could not afford to import the materials necessary to continue operations after Dow's closure, and said production would be moved to other sites where EO was more readily available.

Croda International spokesman Steve Foots said: "It is with huge regret that we are announcing the closure of the Wilton facility today. Dow's decision makes our operation no longer economically viable.

"During the coming weeks and months we will work closely with our employees, all of whom have worked hard for our business over many years, to help them prepare for the transition ahead."

The closures could have a knock-on effect for other companies at Wilton, added local MP Vera Baird.

She said: "This is capable of being a very serious blow to the cluster at Wilton where firms use each other's by-products and Dow offered a significant feedstock.

"Much effort by senior management at Wilton, and in which I have been concerned, has not found a solution so far to prevent this closure.

"The closure of Dow, which is causing the closure of Croda, with other potential knock-on effects is a real retrograde step too in a number of ways for British industry and for our balance of payments.

"I refuse to give up hope. It is well to note that Wilton remains a powerhouse of industry and has a great future despite this. Ensus the biofuels manufacturer and their off-taker Yara are providing modern new investments right now and stand as an encouragement to other businesses for the future."

Unite's national officer for the chemical sector, Phil McNulty, warned that Dow's actions could devastate an entire UK business sector and argued for government assistance to maintain EO production. 

"This plant doesn't just provide skilled work for hundreds of people in Teesside where decent jobs are becoming scarce, but the product it produces is also vital to the enduring success of the UK chemical sector. Its closure would cause a runaway reaction across the industry and put thousands of jobs at risk," he explained. 

He said that the roots of today's problem lay in the sell-off 10 years ago of the plant by ICI, which saw the plant broken down into a number of smaller sites. This means that even though a company may be solvent, it cannot continue if the EO production capacity is lost at the site, he added.

"This site is at the beginning of a production process which ultimately results in so many of the goods on the shelves in our shops," he continued. "We simply cannot lose it. We need urgent assistance from government to ensure we can find an alternative owner so that we can safeguard these skilled jobs and defend this sector."

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