A PETROCHEMICALS company has announced plans to axe 110 jobs at its Teesside operations.

Sabic UK, which employs about 700 staff on Teesside, anticipates further reductions will also see about 50 contractor and agency jobs being lost.

Sabic explained that the restructuring was necessary as the Teesside operations, which include a world-scale Olefins ‘cracker’ and a Low Density Polyethylene plant that is the world’s largest of its type, need to respond to changes in the economy and world market. 

Teesside manufacturing director Mike Ducker said: “As with other areas of the company’s European operations, it is not a sustainable business model for Sabic UK Petrochemicals to remain as it is.”

“The European recession has ultimately resulted in a significant downturn in the demand for the sort of everyday items our products go into, while competition has intensified and we are having to face up to suppliers elsewhere in the world, particularly in the United States and Asia, being able to make the same products that we do at a significantly lower cost.

“Clearly we must do everything we can to transform our performance to a winning position in order to secure the long-term viability of SABIC on Teesside. Decisions have therefore been made designed to reduce costs and drive the performance and reliability of our assets. 

“We do not make proposals about job reductions lightly and fully understand the impact this will have on our people. However, a number of our competitors have already announced reductions to their European workforce. 

“We will consult and communicate extensively with our staff and employee representatives, and we will look to provide support for those affected in terms of helping them to find alternatives within Sabic globally or with other employers.”

Mr Ducker said Sabic remained committed to its UK operations on Teesside, adding: “We remain absolutely committed to finding a solution that will make Sabic a sustainable, profitable and long-term employer in this region.

“These changes are necessary as we strive to get back to being a competitive and sustainable business as part of Sabic’s stated aim of being the world’s preferred chemicals supplier.”

Sabic purchased existing petrochemical assets on Teesside in 2006. At Wilton, the company operates a world-scale Olefins ‘Cracker’, producing Ethylene, Propylene, Butadiene and gasoline products. End uses for these products include plastic drinks bottles, CDs, car interiors and tyres.

Sabic’s plant at Wilton, producing Low Density Polyethylene, is the world’s biggest of its type. The LDPE is supplied to customers throughout Europe, where it is turned into the plastic packaging used to wrap everything from food to electrical goods.

The company’s production complex at North Tees features a large-scale Aromatics and ethylene liquefaction facility. Aromatics are the building blocks for products such as medicines, food packaging, sports equipment and computers.

The Europe-wide restructuring is expected to affect 1,050 SABIC employees and contractor positions. 

Koos van Haasteren, Vice President Sabic in Europe, added: “Our strategy in Europe is to be the preferred leader in chemicals by delivering chemistry that matters demonstrating excellent performance in environment, health safety and security, cost competitiveness, customer value and sustainable profit levels.”

“I am confident that Sabic will be in an even stronger position to meet customer needs, support its employees and contribute to the communities and environments within which we operate, once the restructuring process has been completed.”