Grangemouth to remain down as INEOS ramps up pressure for site reform

LONDON (ICIS)–The Grangemouth, UK, oil refinery and petrochemicals complex is to remain shut down at least into next week while employees consider reform proposals submitted by owner INEOS, the Switzerland-based chemicals producer said on Wednesday.

The entire site will remain closed until Tuesday 22 October at the earliest while employees review proposals submitted by INEOS on Thursday 16 October regarding the future of the complex.

Conversations with trade union Unite finished on the morning of Wednesday 16 October after negotiations broke down. Unite said it has called off a strike planned for 20 October, but the chemicals and refining units at the site had already been taken offline, and will remain down, INEOS said.

The company’s conversations about Grangemouth will now take place with the site workforce and with INEOS shareholders, with both groups to be contacted tomorrow, INEOS said.

According to a source familiar with the situation, the proposals to be submitted to the workforce relate to the survival plan launched by the company in late September.

The proposals include pension reforms and the need to secure investment to develop a new gas terminal to bring in cheaper shale-derived feedstock from the US. The September survival plan also includes plant closures and job losses.

The Grangemouth workforce will have the weekend to consider the proposals, INEOS said, and an answer will be expected on Monday 21 October.

“A decision is going to be made on Tuesday on whether the plant is going to re-open or remain shut,” the source said.

Even in the event of a full accord being reached by the deadline, it would still likely take several weeks for all plant units to be brought back fully online, according to an INEOS spokesperson, who said that it had taken three weeks to bring the plant back online after a strike in 2008.

Unite said on Wednesday that it had proposed working towards a solution to the plant’s issues under the auspices of the Advisory, Conciliation and Arbitration Service, with the immediate cancellation of the strike and the guarantee of no strikes during the negotiations on the table.

However talks fell apart when INEOS walked away from the talks, which Unite claimed was due to CEO Jim Ratcliffe instructing his management representatives to demand an apology in his behalf, Unite said.

“At 5:00 [GMT] ACAS representatives informed us that we could not conclude an agreement to take to our members because a list of fresh demands were placed upon us and because ‘Jim wants an apology’ and that this was ‘a deal-breaker’. I have never came across anything like this in over thirty years of employment relations and it is utterly reprehensible,” Unite Scottish secretary Pat Rafferty said on Wednesday.

INEOS retorted that the industrial action had further weakened a loss-making site, and has said in recent months that the site would close by 2017 regardless of the current issues if it cannot be made more competitive with cheaper feedstocks and a reduction of the pension burden.

“Grangemouth is financially distressed. The industrial action called by Unite the Union has inflicted significant further damage on the company,” the company said in a statement.