The owner of a Scottish petrochemical facility has warned that the plant could be closed by 2017, it the present decline continues.
Currently, the Ineos plant at Grangemouth is losing more than £100 million annually, leaving the firm’s chairman to say that continued failures at reforming the site could lead to serious consequences.
Describing the plant’s future as being at a crossroads, Calum MacLean said:
“Ineos has invested over £1 billion since taking over at Grangemouth in 2006 but – despite this investment – the company has lost over £150 million each year for the last four years. Losses continue today at over £10 million per month.”
A statement from the company reported that volumes of the plant’s raw material, North Sea gas, have fallen by 60 per cent in a decade.
MacLean said that finding new resources was fundamental for the site’s survival. He also explained that reforming the cost base was essential.
It is a story familiar to a number of companies in Scotland. Many firms have successfully restructured their finances though, often with the help of Glasgow or Edinburgh invoice discounting facilities.
The constant failure to succeed in reforming the set up will be a major frustration for the firm. It has already transformed the fortunes of a similar site in Norway. There, new investment in infrastructure has allowed it to process US-sourced gas.
However, Grangemouth is significantly less competitive than the Norwegian plant, making investment impossible at the moment according to Ineos.
The company also confirmed that the site’s pension scheme is currently about £200 million in deficit.