Energy costs too high – Versalis closing UK plant

Italy’s Versalis has decided to permanently close its Grangemouth chemicals plant in Scotland due to a significant downturn in demand for elastomers. This announcement came a month after Petroineos, owner of the Grangemouth oil refinery, confirmed it would cease operations in 2025.

The Eni subsidiary says the decision to shutter the plant came after extensive deliberation and a thorough analysis of various options. While Versalis reported that its total sales volumes for elastomers declined 18.7 per cent year-on-year in 2022, local operation Versalis UK Limited stated that its pre-tax profit plummeted from £17,029,000 in 2021 to just £841,000 last year. “Energy costs are a significant contributor towards the overall product cost, and that impact led to a fall in demand from customers,” stated Versalis UK in its 2022 Annual Report.

On 14 December, the company announced that “due to worsening conditions of the elastomers market, declining sales, increasing costs and negative outlook, the company has arrived at the final decision to close the Grangemouth plant.” Job cuts are expected to begin in April 2024, with trade union GMB stating that approximately 135 workers are affected.

According to Versalis, the Grangemouth site has capacities to produce 80,000 tonnes of polybutadiene and 60,000 tonnes of styrene butadiene rubber a year for use in tyre and industrial rubber applications.