12:29pm Thursday 9th July 2009
By Deborah Johnson
With the future of steelmaking on Teesside shrouded in uncertainty, questions over the future of the £10bn chemical industry were raised last night after the closure of two key plants. Deborah Johnson reports.
THINK of Teesside and chances are you’ll think of its proud industrial heritage. For decades, the area has had a reputation the world over for its traditions in steel and in chemicals – two fields in which it continues to excel.
Over the years, two major companies – ICI and British Steel – dominated the economy, employing thousands of people. During its Sixties heydey, ICI employed at least 80,000 people, many of whom were at its Wilton plant.
Both companies were known far and wide for the quality of their products and skill of their workforce. And while those names have now disappeared – replaced by Corus, which bought British Steel – and ICI has been broken up into numerous branches, many of which are based on the Wilton site, the reputation persists.
Wilton continues to be a proud legacy of the operation started by ICI. Opened in 1949 and hailed at that time as a trailblazer for the UK chemical industry, it continues to be home to some of the most innovative process companies in the UK and indeed the world, and is collectively one of the biggest chemical producers.
World-leading names in the chemical sector have bases there – names such as Sabic, Sembcorp and Huntsman have become synonymous with the site.
But with the economic downturn wreaking havoc with successful industries across the globe, Teesside has been no exception. Its thriving sectors are now falling victim to circumstances beyond its control, and thousands of jobs are on the line.
Steelmaking has been rocked with the uncertainty surrounding the Corus Teesside Cast Products (TCP) plant, which employs 3,000 people.
A ten-year agreement with an international steel-buying consortium, due to last to 2014, has been terminated, leaving the plant’s future in jeopardy beyond August, when its orders run out.
A further 428 jobs are to be lost at four other Corus sites, as the company’s key customers withhold orders as they battle the downturn.
Now, Teesside’s other lynchpin industry is also being affected. As a £10bn annual contributor to the regional economy, and an industry which employs over 34,000 people, its fortunes are key to the area.
But over the past six months, three chemical plants have fallen victim to the economic turbulence – Invista and Elementis have closed plants, and Petroplus last week began consultations with its workforce over their future, after a buyer for the site could not be found.
But yesterday, with the announcements from Dow and Croda, concerns were raised over the future of chemicals on Teesside. There is no doubting the quality of its output or reputation on a UK and even global scale, but in an industry where so much of its operation is linked, a “house of cards” effect is feared.
Only hours after Dow, as the only supplier of the EO chemical in the UK and a key supplier of the product to other plants on Wilton, confirmed its closure, Croda said it was unable to continue without its reliance on Dow. Others may even follow.
Vera Baird, Redcar MP said last night: “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.”
As well as that likely impact on other companies, Dr Stan Higgins, chief executive of the North-East Process Industries Cluster, forecasts that nationally, 500 direct jobs, and 2,000 indirectly, could be lost as a result of the loss of EO production.
Wilton, naturally shocked by the blow, said it remained confident for its future, and that the site remained an attractive prospect for investment.
Of course, for the site, it is far from all doom and gloom – the construction of the £250m Ensus biofuels plant continues, and a new £200m polythene plant has been recently unveiled.
However, concerns were raised at how quickly one plant fell victim to another’s demise.
Bob Bolam, regional organiser for the Unite union, said it is a worrying development, and called for Government assistance.
‘OF course there is a worry another company might follow Dow and Croda, and then another. There is a massive risk to jobs here, and we do need some assistance. We need the Government to look at this urgently. This is an industry that has always been vibrant and we need to ensure that this tide is stemmed,” he said.
The same is true of Corus, said Mr Bolam.
“Steelmaking is a strong industry with thousands of skilled workers working on Teesside.
We will fight as hard and as long as it takes to save it.
“These industries are traditions, which have involved people’s families for years. We cannot let this happen without a fight.”
And while some of the plants which formed part of the British Steel and ICI empires are now being forced to close, the fighting spirit to keep the remaining sites open and to ensure they have a strong and viable future remains.
As George Dunning, leader of Redcar and Cleveland Borough Council, said: “For now, there appears to be no escape from this crippling recession. But the upturn will come.”
For those thousands of people employed in the embattled steel and chemical industries, tonight they will be hoping that comes sooner rather than later – before more worthy sites fall victim to the climate.
IN OPERATION
■ ENSUS: £250m biofuels plant under construction, recently hit by six consecutive walkouts in support of the Lindsey refinery dispute
■ YARA: will take carbon dioxide from the Ensus plant and process it for the food and drinks industry
■ SEMBCORP UTILITIES UK: industrial utilities and services, has made significant advances in green energy through investments in a biomass plant and gas turbine
■ SABIC UK PETROCHEMICALS: formerly Huntsman, has opened a cutting-edge Low Density Polyethylene (LDPE) plant. Also operates the Wilton Cracker plant
■ ARTENIUS UK: closed one of its Wilton sites in 2007, but has invested heavily in its remaining presence
CLOSING
■ DOW: the only supplier of chemical EO in the UK, and key in supplying fellow companies on the Wilton site
■ CRODA: makes chemicals used in products like lipstick and sunscreen, formerly owned by Uniqema
■ INVISTA: nylon-making factory closing, although its chemical works remains open
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