Dow closure sparks chemical crisis
14 July 2009
The national officer for the chemical sector at Britain's largest trade union has expressed deep concern over the state of the UK's chemicals industry following news that The Dow Chemical Company (Dow) intends to 'walk away' from its Teesside operation. The union fears that a chain reaction of closures across the UK's chemicals sector following last week's news that Dow – one of the world's biggest chemical companies – is to close its Wilton Plant in Teesside next January.
Storm clouds forming over Wilton
Unite, the UK’s biggest trade union, fears the Dow closure could trigger a crisis across the chemical industry with thousands of job losses throughout the sector.
Phil McNulty of Unite has written what he terms 'a strongly worded' letter to the Secretary of State for Business, Innovation and Skills, The Lord Mandelson. McNulty warned the minister of the dire situation facing the UK chemical industry and urged him to intervene immediately to avert a crisis in the sector. There is concern that other chemical companies, including Artenius, Croda and Petroplus, are all set to announce similar job cuts with a risk of closures of many more sites across the UK.
Dow's official line is that rising costs and a drop in demand due to the recession is to blame for the closure of its ethylene oxide and glycol plant. Wilton is the only UK site making ethylene oxide, which is a strategic raw material used by the chemical sector and is central to the production of everyday goods from antifreeze to soaps, paints and cosmetics. Ethylene oxide is hazardous to transport and its movement is regulated, which means that businesses purchasing the material cluster near the source plant. The impending closure of the Wilton plant therefore also puts those businesses dependent on it at serious risk of closure too.
Croda International, which uses the ethylene oxide manufactured by its neighbour as a core raw material, said it would be forced to close its Wilton facility. Both facilities are due to shut by the end of January 2010, with the immediate loss of up to 260 jobs. A Croda statement said the company could not afford to import the materials necessary to continue operations after the Dow closure. Production will have to move to other sites where ethylene oxide is more readily available.
The Unite union warned that the closure of such a strategically vital plant could trigger a crisis across the chemical industry, with job losses snowballing to over 3,000 in total throughout the sector. Unite's McNulty warns that the Wilton plant simply cannot be lost: “It cannot be stressed enough that this plant stands at the heart of a strategic business for the UK. Unite is working day and night to find a solution to this threatened closure because its loss would be devastating.
“This plant doesn't just provide skilled work for hundreds of people in Teesside where decent jobs are becoming scarce, but the product it produces is also vital to the enduring success of the UK chemical sector. Its closure would cause a runaway reaction across the industry and put thousands of jobs at risk,” he added.
The union has pledged to do all in its power to resist the closure, urging the government to take a leading role to save jobs and preserve the estimated £560 million Wilton contributes to the UK balance of payments every year. Unite says that the roots of today's problem lie in the sell-off 10 years ago of the plant by ICI which saw the plant broken down into a number of smaller sites. This means that even though a company may be solvent it cannot continue if ethylene oxide production capacity is lost at the site.
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