UpdateSABIC's Geleen crackers at reduced rates due to strike

31 January 2013 14:04  [Source: ICIS news]

(updates with company comment)

LONDON (ICIS)--SABIC’s two crackers and some of its derivative units at Geleen in the Netherlands are running at reduced rates because of a strike, market sources and the company said on Thursday.

One polypropylene (PP) unit might be down completely, sources said, adding that the strike began on Thursday after the workers’ union and SABIC management failed to agree on new labour contracts.

The general view from the market was that capacity could be shut down if the strike goes on into next week.

SABIC’s crackers have the combined capacity to produce 1.25m tonnes/year of ethylene  and 725,000 tonnes/year of PP. Derivative units also include polyethylene (PE).

A company spokesperson confirmed that strike action is currently ongoing.

“We are bringing capacities down at this moment, and the unions are doing that in close consultation with our site management team,” she said.

According to SABIC, the dispute centres on a collective labour agreement (CLA), which
 was originally instituted in 1999 when the Geleen site was still owned by Dutch specialty chemicals firm DSM.

The agreement is now being renegotiated, which is what led to the strike action. Union representatives are pushing for the agreement to remain in its current form.  

“[The previous CLA]  was designed in 1999 and it’s just not valid anymore, because the world has changed, and legislations in the Netherlands with regard to social plans have changed. That is why SABIC wants to modernise it,” the spokesperson said.

“We are engaged in negotiations with the unions about the collective labour agreement, but have not agreed on any contract yet,” she added.

SABIC acquired the facility from DSM in June 2002.

($1 = €0.74)

Linda Naylor and Tom Brown contributed to this article
Nel on Twitter

By: Nel Weddle
+44 20 8652 3214

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