BP Amoco shuts UK, French plants in major styrenics restructuring

04 August 1999 12:39  [Source: ICIS news]

LONDON (CNI)--BP Amoco announced plans on Wednesday to close its Baglan Bay, South Wales styrene plant and shut three expandable polystyrene (EPS) units at Wingles in northern France as part of a major restructuring of its European styrenics operations.

The 285 000 tonne/year capacity Baglan Bay site will close next month (September) when BP Amoco is scheduled to begin sourcing styrene monomer (SM) from the SM/propylene oxide plant at Moerdijk in The Netherlands under a supply deal with Shell.

BP Amoco's styrenics restructuring will also involved the mothballing of an older, 60 000 tonne/year PS train at Wingles when a new 85 000 tonne line is commissioned this month. The three EPS units being closed at Wingles have a total annual capacity of about 35 000 tonne.

Together with existing and further productivity improvements at sites in Marl, Germany and Trelleborg, Sweden - acquired when BP bought Styrenix Kunstoffe from Huls in 1998 - the restructuring is aimed at reducing unit costs in styrenics by 30-40% over the three years to the end of 2000. It is also aimed at doubling manpower productivity over the same period while delivering planned sales growth.

Some of the productivity improvements will be achieved by staff cuts. Some 60 jobs will go at Baglan Bay and over the three-year period BP Amoco's total styrenics workforce will have been reduced from about 900 to around 450. Some 150 job cuts have already been implemented and the remaining 300 are planned to be completed by mid 2000.

BP Amoco, which is Europe's second largest styrene polymers producer, declined to quantify the job losses at Wingles or the overall cost of its restructuring programme.

Mike Buzzacott, BP Amoco's group vice president for polymers, told CNI the exact figure would depend on negotiations in France with works' councils and the cost of the social plan.

However, he stressed that BP Amoco was committed to its styrenics business and dismissed analysts' speculation that it could be included in the company's planned $2.5bn (Euro2.3bn) worth of chemicals disposals.

Despite a current market "as bloody as it's ever been," Buzzacott said the long term growth potential for styrene polymers was very good.

"The latest steps will radically improve the competitiveness of our operations at a time of historically low margins and will allow the business to at least earn its cost capital in all foreseeable market conditions whilst we position the business for future growth in Europe and globally."

By: Neil Sinclair
+44 20 8652 3214

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