Friday, 23 October 2009

Yet another Wilton, Teesside rescue plan?

Former Synetix (bought by Johnson Matthey in 2001) boss Bob Coxon, who heads up the North-east Science and Industry Council, is to conduct a review of the options for the Wilton, Teesside chemical complex.

The blog wonders if there are simply too many well-meaning public, semi-public and private groups vying to find a solution for the site, where Dow's ethylene oxide and ethylene glycol facilities are due to be closed in January.

Only a few weeks ago I reported on ICIS news a government spokeswoman saying there was currently a review being undertaken by regional development agency One North East “to see what investment would be needed for that plant to continue to be commercially active and what investment would be needed to change the end products it is producing. That’s going on at the moment. There isn’t anything else going on”.

The spokeswoman said money could be available for capital investment at the site if “a demonstrable, viable business case” was put forward.

Does the left hand know what the right hand is doing? Are there simply too many initiatives, causing confusion to everyone concerned? Who are North-east Science and Industry Council and how do they differ from North East Process Industry Cluster (NEPIC), One North East, and all the other agencies involved?

Here is part of the most recent report:

"This month’s announcement that former Synetix boss Bob Coxon, who heads up the North-east Science and Industry Council, would lead an urgent review of what the Teesside cluster of companies immediately needs from both private sector networks and regional and national government is not the first time that local agencies have addressed the problem - although it’s the first time they have talked publicly about it.

Mr Clarke revealed that ONE had been working for up to a year on a rescue plan for Dow before it pulled the plug on its ethylene glycol plant in June. Dow’s customer Croda followed suit a few days later. Artenius, for completely different reasons, was next. The big question is what happens now.

“We don’t yet have a proposition,” admitted Mr Clarke. But he’s working on it.

For Mr Clarke, an economist not a scientist, Wilton has been a sharp lesson in financial catalysis - the collision of micro and macro economics that’s sparked a sequence of events that are threatening to be both politically and economically destabilising for the region.

They are now being addressed with a series of initiatives at local, national and even European level.

It all began with the closure of nylon maker Invista and the loss of 300 direct jobs in February. A sprawling plant that had benefited from consistent investment, but whose miles of eerily silent pipes now shadow the Wilton site, Invista was among utility provider Sembcorp’s biggest customers. The speed at which Invista withdrew sent shockwaves through the industry, but while the impact locally was profound, the real wake-up call came with Dow.

Mr Clarke said he understood why many process employees on Teesside, who have seen a succession of high profile visits to struggling car manufacturers in the Midlands, felt Government treated theirs as the Cinderella industry. And it’s true that up until the new green generation of process plants began to populate Wilton and sister sites in the Tees Valley, London seemed remarkably reluctant to dirty its hands with Wilton, despite the sector’s huge economic impact.

Even energy and climate change minister Ed Miliband, whose portfolio would naturally bring him into contact with the process sector, was said to be surprised at the scope of the Wilton complex on a recent visit.

Mr Clarke defends the government’s record, but admits the agency had to be “creative” in securing what was then SFI (now GBI) funding for Sabic’s low density polyethylene plant, opening later this year, because the “scale of investment was out of sync with the job creation” - the crude Whitehall calculation used to justify writing a cheque from the Exchequer.

He insists that if the private sector comes forward with a sustainable investment proposal for Wilton, cash would be found to support it. Unfortunately, nobody has. And while national government has a role to play in addressing Teesside’s current problems, it’s not responsible for sorting them out, said Mr Clarke. “We are not going to have a nationalised chemical industry or another ICI. We have to come up with a private sector solution.”

And that is proving difficult. “Coming up to the recession we had lots and lots of independent companies, integrated through Sembcorp. While things were going well, Wilton was spiraling upwards. But the very advantage in an upturn becomes a potential disadvantage in the downturn because if one or two companies within that supply chain have difficulties, that upsets the products and by-products going back and forth. Then all of a sudden the advantages become a problem.”

He conceded, though, that there has been a marked reluctance to admit it. “We all need to move from a position of saying ‘does anyone care about the process industry’ and ‘can we be a bit more open about communicating what the issues are’, to coming up with a proposition that industry, central government and local authorities can support to make happen.”

Wilton was made great by one big bold experiment. Maybe now is the time for another.

1 comment:

  1. Has anyone asked Charles Koch why he did not want to sell the Nylon plant there was no talk of a sale at all , Or was it because he did not want any more competition when recovery improves, Or as i heard because the wrong president was elected in the USA,


Blog Widget by LinkWithin