Sir Jim Ratcliffe mothballs three Ineos chemical plants in Hull over gas prices
Sir Jim Ratcliffe’s Ineos is mothballing its three chemical plants in Hull, with the billionaire blaming higher UK gas prices for “destroying” its manufacturing base.
Ineos is one of the world’s largest chemical companies, and the plants produce raw materials used in products including pharmaceuticals, clothing and cosmetics, construction and military explosives.
It is understood that around 1,000 employees who are based at the Saltend Chemicals Park will be affected by the move, of which about 240 are directly employed by Ineos.
Ineos said there could be a knock-on impact to a further 3,000 skilled jobs in the Humber.
A spokesman said that, because of the operational demands of the site, all Ineos employees will remain working even through the process of making the plants idle, and confirmed there were no redundancies planned.
It is the latest blow to the Saltend Chemicals Park, which saw the Vivergo Fuels bioethanol plant close after the UK’s trade deal with the US last year.
Sir Jim, Ineos’ founder and chairman, said it was “being forced to mothball some of the most efficient plants in Europe but with gas prices now 12 times the level in the US and eight times that of China, we just cannot compete”.
“Not only is the ridiculously high gas price in the UK destroying our manufacturing base and the jobs of hard-working people on Humberside, it is also massively increasing the environmental burden with replacement products supplied from the USA at double the carbon emissions and from China at eight times the emission level,” he added.
“The UK government’s energy policy is leading to economic vandalism on an industrial scale, exporting jobs to China and the United States and driving up global CO2 emissions at a stroke.”
Gas is used as energy and to power the production processes at the Hull plants, which produce three key types of chemicals – acetic acid, acetic anhydride and ethyl acetate.
These are used in a range of everyday products including household cleaning products, packaging and plastics, aspirin and paracetamol, textiles and paints, and in the production of food preservation.
Ineos said two plants had already ceased production and the third would be paused in the next few days.
UK natural gas prices have roughly doubled between July and September, recently reaching the highest level since December 2022.
This has largely been driven by the US-Israel’s war in Iran and disruption to oil and gas supplies through the Strait of Hormuz.
Energy Minister Michael Shanks said he was calling on Sir Jim “to be part of the solution” and work with the Government on its reindustrialisation plans.
“We’re doing a lot of work across government on the chemicals industry at the moment, but I would call for Jim Ratcliffe to be part of the solution to building the reindustrialisation of Britain,” he said.
“He has an important role to play in that, and I think he should work with us to make sure we’re protecting as many jobs as possible.”
Sir Jim, the Manchester United owner, has courted controversy in recent years, saying that the UK had been “colonised” by immigrants.
The Ineos boss is worth around £15bn, according to the Sunday Times Rich List, but has been a tax resident in Monaco since 2020.
Since he took over at Old Trafford, he has made some 250 members of staff redundant in a cost cutting drive.
Last year, Vivergo Fuels closed its bioethanol plant in Saltend after the UK cut ethanol tariffs on imports from the US. Some 160 staff lost their jobs.
The Prax Lindsey oil refinery on the other bank of the Humber closed last year as well, and Phillips 66 bought the firm and moved its operations to its site in Immingham.
Beverley and Holderness MP Graham Stuart, who represents the chemicals park, has called for a meeting with ministers to try and secure Ineos’ long-term future at Saltend.
He said: “This is a sad day for Saltend and another serious blow for industry in our area after the closure of Vivergo.
“I’ve worked with Ineos for years and have been meeting them regularly over recent months as the pressures on these plants have grown.
“My thoughts today are first with the people who work there and their families. I’m pleased Ineos is keeping its workforce in place while it tries to secure cheaper gas and get these plants producing again.
“But this goes far beyond the plant gates. Saltend supports skilled jobs, apprenticeships and businesses across the Humber. If we lose major industries like this, we don’t just lose jobs. We lose skills and experience that have taken generations to build.
“What happens in Westminster can sometimes feel a long way from East Yorkshire, but decisions about energy and trade have consequences here. They affect whether plants stay open, whether businesses invest and whether people have good jobs to go to.
“British industry is struggling with high energy costs. I want to see these plants producing again, which is why I am seeking an urgent meeting with ministers to discuss what can be done to secure their future.”
A Government spokesperson said: “While this is a commercial decision from Ineos, we know this will be a concerning time for workers in Saltend and their families.
“We’ve taken bold action to support our chemicals industry including £350m for strategically important chemicals producers, which will be available on a co-investment basis.
“We’ve also put trade measures in place on foreign chemicals imports and are tackling high electricity costs via our Supercharger and British Industrial Competitiveness Scheme to keep our chemicals sector competitive.”