Two plant closures put 180 jobs in jeopardy

Jul 17 2008 by Andrew Mernin, The Journal

CHEMICAL group Sabic has announced plans to close two sites on Teesside which employ about 180 staff.

The Saudi Arabian company confirmed a restructure of its Teesside aromatics operations following a wide-ranging review of the long-term viability of the business.

The plans involve closure of the Aromatics 2 unit at the Sabic UK Petrochemicals’ North Tees Site near Seal Sands and the paraxylene plant at Wilton.

But the company confirmed its intention to maintain a strong presence on Teesside with the announcement of proposals to improve the remaining Aromatics 1 plant at North Tees. Sabic UK Petrochemicals president Paul Booth said the aromatics business – which produces polyethylenes and polypropylenes for use in products such as carrier bags – had suffered from worsening economic conditions for a long time.

“We have worked incredibly hard for a number of years to make the aromatics and paraxylene assets viable in a fiercely competitive environment,” he said.

The closures are expected by the end of the year and will affect about 180 Teesside jobs and 20 in the Netherlands. Sabic says it will seek to minimise the effects through redeployment and voluntary means.

Mr Booth said: “Our plans include seeking sanction for new capital investments to improve the total Teesside site performance, including Aromatics 1 and associated infrastructure to ensure a sustainable long-term future for Sabic on Teesside.”

A spokesman said the investment would be significant.

Mr Booth said: “On Teesside, Sabic UK Petrochemicals remains fully committed to its olefins cracker operations at Wilton, cyclohexane production at North Tees and to continuing its investment in the major low density polyethylene project at Wilton. We will also continue to process pyrolysis gasoline feedstock from our Wilton cracker on the Aromatics 1 unit to optimise our cracker operations across Teesside.”

Sabic’s Olefins 6 cracker has recently had a two-month £35m overhaul.

One NorthEast chief executive Alan Clarke said: “One NorthEast has spoken with the company to learn more about its decision regarding the Aromatics 2 unit and its overall strategy for the Tees Valley business moving forward.

“The announcement is a concern for the workers at the Aromatics 2 unit and we will work with our regional partners to ensure any worker affected by redundancy is given the best possible support to find suitable new work in the region.

“There is a strong demand for skilled process industry workers in the North East which in general remains strong and vibrant and we are confident that the skills of any redundant workers will be in high demand from other employers in the sector.

“I am encouraged that Sabic remains fully committed to its other Tees Valley facilities, with new investments planned to consolidate its important role in the regional economy and One NorthEast will continue to work closely with the company.”