The Mitsubishi Chemical Group has started talks with its workers on Teesside on a proposal to close part of the Cassel Site in Billingham.

The move, which could result in the ending of all methacrylates associated manufacturing operations at the Cassel Site, follows a comprehensive review aimed at identifying opportunities for restoring long term economic sustainability.

The production of methacrylates requires the consumption of significant quantities of natural gas both as energy and as feedstock for the manufacturing process. The methacrylates facility has been offline since January 2022, initially to undertake a planned overhaul event, and since September due to the impact of rapidly escalating natural gas prices caused by the ongoing situation in Ukraine.

Read more: SUEZ pushes ahead with plan to build Billingham carbon capture plant

There has also been a significant downturn in the European economy as a result of high inflation, resulting in weaker demand in the methacrylates market.

Stockton Labour MP Alex Cunningham said: “We’re hearing the same story of rising gas and energy prices clobbering industry again and again and I have lost count of the number of times I've warned the Government that rising energy prices and a failure by the Government to tackle it are crippling firms like Mitsubishi.

"All of these warnings have fallen on deaf ears with Ministers abandoning all pretence of them having an industrial strategy and insisting the problem is dealt with by industry alone.

“Now hundreds of jobs in my constituency hang in the balance alongside many others that are part of the Mitsubishi supply and customer chain. This announcement is a result of the Government’s continued failure to act despite ample opportunities. It’s time they do so now.”

A comprehensive business review has been undertaken, which explored options including the temporary mothballing of the plants and a complete reinvestment at Cassel as well as a closure option.

The review has concluded that in an increasingly competitive global market, continued production of methacrylates at the Cassel Site does not appear to be economically sustainable.

A final decision on the proposal for methacrylate operations at Cassel is expected to be made in January following the consultation period with 238 staff.

Malcolm Kidd, EMEA VP for the methacrylates business, said: “This is a very sad day for everyone associated with our business on Teesside. Our employees and various partners have worked tirelessly and creatively to support the business in delivering high quality products safely and sustainably over decades but our position now and looking ahead appears simply unsustainable.

“Every effort will now go into supporting our skilled and talented production technicians, and engineering, technical and business support staff during this difficult period.”

The Mitsubishi Chemical Group said that in the event of production ending at the Cassel Site, it would continue to provide a supply of methacrylate products to customers from other sites across its global asset base.

 

Read more: