SABIC UK will convert its massive plant to take US shale gas, in a “very significant” investment that will make it one of the most competitive facilities of its kind in Europe. Bosses say the work, due to be finished in 2016, will secure the long-term future of the Teesside plant - which is the ‘cornerstone’ of industry on Teesside.
SABIC UK employs 1,000 staff and contractors on Teesside and supports around 4,000 in the supply chain.
A series of ‘future-proofing’ measures was announced last year by the company, after it suffered a global drop in demand for products. The 223-acre Cracker - or Olefins 6 - was built in 1979. It makes the essential chemical building blocks for everyday items from toothbrushes to TV and car parts, but sales have been hit by cheaper foreign manufacturers.
A ‘shale revolution’ in the States has made large supplies of competitively priced gas available.
Mike Ducker, site director for SABIC on Teesside, said the project will “secure a sustainable, competitive future for SABIC on Teesside for many, many years. It is great news for Teesside because it provides SABIC with the basis for a competitive, long-term operation of our Teesside assets. We had been fighting against the tide for some years, during which we’ve undergone a series of restructurings. There does come a time when you need to do something big and transformational. This is it. Clearly we have been through a difficult environment for many years but this transforms that situation and without it we would have faced an uncertain future. The cracker is the cornerstone for the industry on Teesside – so we believe it is of wider significance for the region’s chemical industry.”
Work is already underway to build cryogenic tank at the company’s North Tees site, between Port Clarence and Seaton Carew. as part of an import terminal for the project. Darlington firm Whessoe has been contracted for the work.
SABIC has also won the backing of Government, with more than € 11m secured from its Regional Growth Fund (RGF).
Universities, Science and Cities Minister Greg Clark said the investment shows “real confidence” in Teesside and the UK economy and is great news for local employment. He said: “It is a significant example of how we can use the RGF to support businesses to deliver their plans for growth. “It also gives me particular pleasure as someone who grew up a stone’s throw away from Wilton. Through RGF we have invested over £320m (€ 400m) in the region to help companies expand and create long-term, highly skilled employment.”
Ian Swales, Redcar Lib Dem MP, said: “This major investment will make the Wilton Cracker one of the most effective in Europe. I’m pleased that the government has been able to support this project, which will help to transform the economy of the Tees Valley and attract further investment.”
A restructure with the loss of 110 jobs across SABIC’s Teesside sites, which was announced last year, is almost complete.
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