Closures may lead to a jobs ‘disaster’ (From The Northern Echo)

Closures may lead to a jobs ‘disaster’

10:17am Thursday 9th July 2009 in

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FEARS were raised about the future of Teesside’s multi-billion pound chemical industry last night after two more key plants closed in what was described as a “monumental disaster” for the sector.

The impending closures of the Dow and Croda plants, which together employ about 200 people, sparked fears for the ongoing viability of the Teesside chemical sector, which is worth more than £10bn-a-year to the regional economy and sustains 34,000 jobs.

However, it has been hit by hundreds of job losses and three plant closures in the past few months.

The future of the Wilton International site, near Redcar, was also said to be “under immense pressure” with fears being raised that the two new plant closures, but particularly that of Dow, could have a “house of cards” effect on neighbouring companies.

The site, once part of ICI but now home to several major international chemical companies, employs thousands of people and has seen more than £2bn of investment in recent years, but is suffering significantly at the hands of the recession.

And the closure of Dow – the UK’s only supplier of the ethylene oxide (EO) chemical found in products such as detergents and soap, and also widely used industrially on the Wilton site – was said to be so significant it could threaten the future of other companies at the site, as well as costing at least a further 500 direct and 2,000 indirect jobs across the country.

A buyer for Dow has been sought for some time, but yesterday the company announced its future in the North-East was untenable.

Hours later, Croda – which relies on Dow’s EO supply to operate – announced its closure, which will be phased until January.

Last night, regional development agency One North East, the North-East Process Industry Cluster (Nepic) and Tees Valley Regeneration vowed to redouble efforts to find inward investors for Wilton and other key sites on Teesside.

A spokesman for Wilton, which is owned by Sembcorp Utilities, accepted the closures of Dow and Croda were a “serious blow” to the site, but insisted its strengths remained and confidence was high for future investment.

However, unions said they were fearful of the implications of Dow’s demise.

Bob Bolam, regional organiser for the Unite union, said an emergency meeting between representatives from the chemical industry across the area would be held this morning.

“This is a monumental disaster for Teesside and its chemical industry. There are sure to be more jobs at risk – and the future of the Wilton site is now under immense pressure,” he said.

Yesterday’s developments came as a new blow to the area’s chemical sector, which has been hit in recent months by the closures of Elementis, Wilton-based Invista and the potential shutdown of Petroplus.

And it comes as a further setback to Teesside and its economy, which is suffering through the imminent loss of 428 jobs at four Corus plants, and the potential loss of 3,000 more if its Teesside Cast Products site is mothballed.

Last night, staff and union officials held an open meeting on Teesside to discuss the future of the steel industry.

Nepic chief executive Dr Stan Higgins said it was a tough time for the area, but Ian Williams, director of business and industry at regional development agency One North East, was more optimistic.

“One North East is working closely with Nepic and organisations across Tees Valley to bring new investments to the area, which continues to have a worldwide reputation for excellence in the process industries sector,” he said.

“Despite the tough economic conditions facing the sector and wider industry, the process industries remain a very significant contributor not just to the regional economy, but to the UK as a whole.”