Grangemouth site losses confirmed by auditors: INEOS

14 October 2013 18:07  [Source: ICIS news]

LONDON (ICIS)--Switzerland-based chemicals producer INEOS said on Monday that financial data released by its auditors relating to the performance of the controversy-mired Grangemouth, UK, refinery complex confirms its claims that the site has lost £579m (€681m, $919m) in the last four years.

The company said that it had asked PricewaterhouseCoopers (PwC), its auditor, to confirm the claim after the figure was questioned by politicians and union figures.

According to the PwC figures, released in a statement by INEOS, cumulative total earnings before interest, taxes, depreciation and amortisation (EBITDA) at the site for the period from 2010 to 2013 amounted to a £110m loss, compounded by £468m of total capital expenditure.

The 2013 figure is totalled to the latest value for the year so far, according to a spokesperson for the company.

According to the PwC figures, the site recorded EBITDA losses of £41m in 2010, £53m in 2011, £5m in 2012 and £11m in 2013 to date. However, the four-year statistic does not take Grangemouth’s performance in 2008 and 2009 into account, when the complex generated full-year EBITDAs of £180m and £116m respectively.

INEOS has stated that the site will be closed by 2017 unless investment can be secured to upgrade site infrastructure to import cheaper feedstock materials from the US. A survival plan put forward by the company includes a £300m investment by INEOS and the ending of the existing final salary pension scheme, which the company claims costs 65% of salary at present.

Grangemouth Petrochemicals UK head Calum MacLean said, “Those who have been disputing the company’s figures are not helping anyone. The only way for this site to prosper is for everyone to back the company’s survival plan.”

The company said on Monday that it has agreed to begin talks this afternoon with Unite and industrial dispute mediator the Advisory, Conciliation and Arbitration Service (ACAS) in a bid to avert a 48-hour strike planned from 07:00 GMT on 20 October.

The strike, which was voted for on the back of an INEOS investigation into site union representative Stephen Deans, “could effectively shut much of Scotland”, MacLean said in an earlier statement.

On his way to the meeting, INEOS olefins and polymers UK CEO Gary Haywood said, “We are here for two reasons: to discuss the union’s grievances over our investigation into Stephen Deans and to agree how we manage the ongoing shutdown on the site, which is already well-advanced.

“[We want] in particular to understand the union’s willingness or otherwise to ensure they will allow us to keep the North Sea pipeline system running, and support us in maintaining full supplies to the people of Scotland,” he added.

Trade union Unite has called for INEOS to allow it to fund an independent financial review of the site.

($1 = €0.74, €1= £0.85, $1 =£0.63)

By: Tom Brown
+44 208 652 3214

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