Sir Jim Ratcliffe’s chemical conglomerate Ineos announced on Tuesday that it would temporarily halt operations at three manufacturing facilities located in Hull due to escalating gas costs. The company stated that production had already been suspended at two of the Humberside plants, with a third expected to cease operations within days.
The mothballing affects approximately 240 workers directly employed across the three sites. However, Ineos indicated that a potential permanent closure could impact up to 4,000 jobs when accounting for employees in related supply chain operations throughout the region. Ratcliffe characterized the decision as unavoidable, asserting that the company operates some of Europe’s most efficient plants but cannot maintain competitive production under current cost conditions.
Ratcliffe highlighted the significant cost differential in energy pricing, noting that UK gas prices are approximately 12 times higher than those in the United States and eight times more expensive than the coal increasingly utilized by chemical manufacturers in China. Gas serves as a critical feedstock in the chemicals industry for producing the building blocks necessary to manufacture diverse products including textiles, pharmaceuticals, and detergents. The executive further criticized government energy policy, stating it amounts to “economic vandalism on an industrial scale” that transfers manufacturing to other nations while simultaneously increasing global carbon emissions.
The UK government responded by emphasizing support measures for the chemicals sector, including a £350m co-investment scheme and import trade measures. Officials also outlined forthcoming initiatives to address electricity costs, with one program targeting up to 25% bill reductions for more than 10,000 manufacturing businesses and another “supercharger” scheme designed to reduce costs for highly electricity-intensive operations by over £400m annually. A government spokesperson acknowledged the concerns for affected workers and their families.
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