Dow closure threatens UK chemicals industry.(Ethylene oxide production)(Dow Chemical Co.)

US chemical major Dow has announced that it will close its UK ethylene oxide (EO) plant in Teesside at the end of January 2010. The closure is already having a knock-on effect on chemical plants in the area, with UK natural-based speciality chemicals producer Croda closing its Wilton facility, which is dependent on EO.

The Unite trade union believes that further plants at the site could now be under threat. The North East Process Industry Cluster (NEPIC) states that a recent report found that 2500 jobs could be at risk. The news comes as UK unemployment hits a 14-year high of 2.38m.

'Dow's decision makes our operation no longer economically viable,' says Steve Foots, president consumer care Europe for Croda. The closure of Dow's plant will result in the loss of 55 jobs and another 125 people will be made redundant when Croda closes its facility at the start of 2010. Dow attributes the plant closure to a number of factors including reduced demand and profit margins, particularly for monoethylene glycol. According to Phil McNulty, national officer for the chemical sector at Unite, this is not the whole story and EO pricing disagreements with Shell, a downstream processor of the chemical, have contributed to the plant's closure.

McNulty says that it appears that other chemical concerns at the Teesside site, including Artenius and Petroplus, are gearing up to announce job cuts, with more closures a real possibility. The Teesside site is said to contribute 560m [pounds sterling]/year to the UK economy.

'EO is a strategic material for a modern industrial society ... we will now have to import the raw materials for products, like detergents and shampoo, soap and softeners,' Stan Higgins, ceo of NEPIC says.

Dow's Teesside facility in north east England, which it bought from ICI over 10 years ago, is the only ethylene oxide plant in the UK. There are other ethylene oxide facilities on the continent, but import is costly and difficult due to legislation controlling the transport of the potentially hazardous chemicals.

'There has to be some intervention to ensure ethylene oxide production continues at the site and I fear for the future of the whole site if nothing happens,' McNulty says. 'I fear for the downstream businesses too and the economy of the UK.'

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