A petrochemical site at the centre of an industrial dispute could close without major investment and a reduction to its “high” cost base, its owners have warned.
INEOS Petrochemicals said its site in Grangemouth, Scotland, is at a “crossroads” and faces closure unless investment into new sources of raw materials is secured.
The company said North Sea gases, used as raw materials by the petrochemical site, have declined by 60% in the last 10 years and the current site agreements with North Sea operators expires in 2017.
With no additional raw materials available locally, Grangemouth needs major investment to land gases from the US, it was stated.
INEOS said it has invested more than £1 billion since taking over Grangemouth in 2006 but the company added that it has lost more than £150 million each year for the last four years, with losses continuing at more than £10 million a month.
Chairman Calum MacLean said: “The petrochemical business at Grangemouth has reached a crossroads. Unless we reform our cost base and secure a new source of raw materials, the site will close in 2017, when our gas contract expires.”
The Unite union is balloting its members at the site for industrial action in a row over allegations that a union official has been victimised.