Beating heart of Tees Valley

Jul 24 2007 by Karen McLauchlan, Evening Gazette

THE facts speak for themselves. The chemical industry is the beating heart of the Tees Valley’s business community.

It is a major part of the region’s process industry - which makes up a quarter of the region’s economy, employs tens of thousands of staff and has secured more than £1.5bn of investment in the past few years.

Which is why in 2007 the Evening Gazette’s campaign - Pride In Our Process Industry - is throwing the spotlight on this essential sector.

The industry is a formidable blend of both old and new skills.

Our traditional engineering and chemical production still exists, but we are also moving the sector forward with hi-tech research and development of new industries.

NEPIC - the North East Process Industry Cluster - believes the region’s process industry could grow by a massive £4.5bn in the next decade.

Which means these are boom times for Tees Valley’s process industry.

The sector has been through something of a roller-coaster ride in recent years.

Once dominated by ICI, the chemical giant’s demise in the region has opened the door to other global players.

And with that has come new opportunities and new investment.

Recently a £12m centre officially opened its doors which will put Teesside on the worldwide map.

The National Industrial Biotechnology Facility, at the Centre for Process Innovation at Wilton, will transform the way vital chemicals used to make millions of everyday products are manufactured.

The NIBF will help firms replace outmoded traditional chemical processing techniques with cleaner, greener, less wasteful methods - ensuring the region is a place at the forefront of the green revolution.

It provides an open access trial and development centre so that businesses can test their ideas to ensure they work and are viable before investing heavily. And once satisfied with the results they will have the evidence to prove a business case to potential backers.

And the development of the sector continues.

Hexion Specialty Chemicals recently announced it is buying chemical company Huntsman in a $10.6bn deal.

The sales includes local Tees Valley operations including Pigments (formerly Tioxide) division at Greatham, near Hartlepool, Haverton Hill and Billingham, and the polyurethanes operations and a service centre at Wilton - employing about 650 people in total.

Last month the Huntsman Corporation announced it was going to sell its remaining businesses to Dutch company Basell for $9.6bn.

But Hexion, which is owned by private equity group Apollo Management, stepped in with a higher bid.

It had tabled $27.25 per share in cash but then upped that to $28.

The latest deal is subject to regulatory approval in the United States and Europe as well as Huntsman shareholders.

Jon Huntsman, chairman and founder of Huntsman, said: “I have invested much of my life in Huntsman Corporation and consider it the highest honour to be associated with such exceptional customers and associates.

“However, the time has come when it is in the best interests of our shareholders to sell the company.”

Once the deal has gone through this will sever the family’s links with Teesside, which began in 1999 when they took over a big chunk of ICI.

Last September Huntsman sold off its Teesside-based European Base Chemicals and Polymers business, employing 840 people, to the Saudi Basic Industries Corporation. This involved petrochemicals assets at Wilton - the cracker and paraxylene plants and the £200m polyethylene plant, which is currently under construction, and the aromatics complex at North Tees.