Member Article

Downturn closes chemical plant

Chemical giant SABIC is shutting down part of its plant on Teesside following a drop in demand. The Olefins 6 plant - which underwent a £35m overhaul last year - is expected to be switched off for around six to eight weeks.

Olefins, a type of basic chemical known as hydrocarbons, are used in everyday products such as toothbrushes, television and video components and films for packaging.

SABIC has blamed the global economic downturn for the decision and said “it was too early to say” whether the shutdown period would be extended.

A spokesperson said: “It’s partly due to the global economic situation. Demand has been fairly weak across the board.”

He also said SABIC would use the opportunity to carry out further maintenance work on the site.

“We aim to emerge with a plant that’s in better shape to cope with the economic upturn when it does come,” he said.

The shutdown is not expected to lead to redundancies or major reductions in staff working hours.

Stan Higgins, chief executive of the North East Process Industry Cluster (NEPIC), said lower demand for everyday goods was putting particular pressure on the plastics industry - a key user of hydrocarbons.

He said a global downturn in the motor trade was also impacting on companies in the process sector.

“The surroundings of a car are around 90% plastic; plastic foams can be found inside cavity walls in the home,” he said. “This is about the global economy. “People are not buying big-ticket items and we just have to hope that demand improves by the middle of the year.”

But he also said other parts of the process chain, such as speciality and fine chemicals firms, were holding up well in difficult economic conditions.

This was posted in Bdaily's Members' News section by Ruth Mitchell .