UK manufacturing to be hit hard by Dow EO/EG closure - EO user

09 July 2009 17:33  [Source: ICIS news]

LONDON (ICIS news)--Dow Chemical’s decision to close ethylene oxide (EO) and ethylene glycol (EG) production facilities at Wilton on Teesside will have a significant impact through production chains in the UK, a source at EO user Cognis said on Thursday.

“This is a huge nail in the coffin of UK manufacturing industry”, the source said.

The UK’s largest trade union Unite suggested on Wednesday that the Dow closure would destabilise the country’s chemical industry and lead to further job losses. The runaway reaction could put thousands of jobs at risk, it said.

Cognis uses EO to make base-fluids and formulated polyalkylene glycols (PAGs) at Hythe in Hampshire for speciality lubrication and foam control with Dow as a principal supplier.

Ethylene Oxide is not easy to transport but the Dow closure, scheduled for January 2010 will mean that Cognis will have to import 100% of its raw material requirement adding costs and logistics problems. EO is currently transported to the Hythe site by road.

UK chemical industry sources suggested that the knock on effect of the closure might be limited, however, with producers of downstream products seeking alternative sources of intermediates.

UN trade statistics showed that the UK had exported more EO than it had produced over the past two years although the volume of that trade was small.

Some firms will be immediately hard hit by the Dow decision nevertheless.

Croda said on Wednesday that it would be forced to close its production site at Wilton which relies on Dow EO to help make personal care products and industrial specialties. The site closure would result in the loss of 125 jobs, or 18% of the company’s UK workforce.

Nel Weddle contributed to this article

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By: Nigel Davis
+44 20 8652 3214

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