Chemical jobs 'will be replaced'

Teesside's chemical sector has suffered a series of high profile closures

Despite hundreds of job losses in the North East's chemical industry in 2009, the sector is predicting it will expand, not contract, in coming years.

High profile closures and cut backs this year include 400 job losses at Invista and 180 at Dow and Croda.

The North East Process Industry Cluster (NEPIC) represents around 300 chemical companies in the region.

It says coming investment in renewables and biotechnology will more than offset those jobs lost.

Jobs are also under threat at Artenius and Petroplus on Teesside, but NEPIC is continuing to predict the chemical sector in the North East will need to recruit a further 5,000 to 8,000 workers between 2009 and 2015.

The 'house of cards' effect

Some of those investments are delayed, yes, but most of them are still ongoing Stan Higgins, NEPIC

Unions and local MPs have raised concerns that the closures of a number of key plants on Teesside will make neighbouring companies, who rely on the chemicals they produced, unviable.

Bob Bolam from the union, Unite, said: "Without some of these chemicals being produced on Teesside, a lot of your shampoos, your washing powders, your detergents, your plastics that go into cars, the material that goes into airbags, will all be lost to the British economy."

But Stan Higgins, Chief Executive of NEPIC, said the theory had been overplayed. "With the closure we had with Dow, there was a bit of connectivity, unlike anything else we have in the region, I have to say, because the use of ethylene oxide meant that those two companies (Dow and Croda) were linked by an umbilical cord."

He dismissed claims that the potential closure of the Petroplus oil refinery on Teesside could have a similar effect. "Its loss shouldn't affect the other companies in the region. However, it's still a worthwhile facility and everyone in the region is fighting to make sure that it gets purchased by someone."

Hockeysticks

Dow's Wilton plant has been idle for almost 20 weeks

The part of the industry worst hit by the recession is the commodity chemicals sector, those producing large quantities of 'ingredient chemicals'.

These chemicals are typically produced in their millions of tonnes and used in a wide variety of products. Producers on Teesside are expected to shed further jobs during the recession.

The North East process industry refers to the 'hockey stick' graph, showing how the industry's early days as a mass producer of base and petrochemicals in the early 20th Century allowed it to develop new specialist substances and pharmaceuticals by the middle of the century.

Recent decades have seen the industry use its high-end pharmaceuticals base to move into biotechnology and renewable energy technology.

It is this sector that NEPIC predicts will see major growth between 2009 and 2015.

New investment

NEPIC admits that the commodity chemical sector is suffering as mass production shifts away from Western Europe, but says the industry is moving quickly into high-end, complex chemicals and biotechnology.

In late 2009 Ensus will open a new £250m biofuels plant on Teesside, creating 100 permanent jobs, with expansion plans already under discussion, Yara International is preparing to open a £27m plant on the same site, that will process CO2 into products for the food and drink industry.

Sembcorp Utilities, which owns Teesside's Wilton chemical complex, has invested £36m in a new combined heat and power station on the site, while SABIC is completing construction of a low density polyethylene plant on Teesside, which it says has created 120 new jobs and secured 750 others.

On July 15, 2009, planning permission was granted to build a new £500m biomass power station on Teesside, expected to be operational by 2012.

Days later, the government announced it was to invest £12m in new facilities on Teesside for testing emerging biotechnology processes.

Stan Higgins said: "We need more and more engineers and scientists to make sure that we can keep winning these fantastic investments that we've had recently."