On Tuesday, the company Ineos, set up by billionaire Jim Ratcliffe, said it is idling all three of its Hull, northern England chemical sites. The company described them as Europe's last remaining world-scale acetyls units, which make building-block chemicals used across pharmaceuticals, clothing and construction.
The company is placing the facilities into care and maintenance until further notice, citing energy costs that have blown past overseas competitors. Ratcliffe put it bluntly: "With gas prices now 12 times the level in the US and eight times that of China, we just cannot compete." He added, "European regulators need to wake up to the fact that the combination of high energy costs and the additional burden of unsustainable carbon taxes are destroying our European manufacturing base."
Europe's chemical makers are in a bind as weak demand, a glut of global capacity pushing down prices, and high power costs squeeze margins. Several have gone insolvent, shut sites or shifted investment abroad. The European Union's Critical Chemicals Alliance is weighing which assets might qualify for support after about 9% of the region's production capacity was marked for closure between 2022 and 2025.
The Humber area around Hull has taken repeated hits. Once a busy manufacturing corridor, the area has lost plants that couldn't compete, including a bioethanol site situated in Saltend's chemicals park where Ineos also operates.
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Ineos employs 245 people at the Hull complex and estimates around 4,000 supply-chain jobs are touched by the move. A UK 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," pointing to £350 million ($468 million) of support for the sector. Beyond the UK, the strain is showing across Europe: After an overhaul and state support failed to sustain operations, Leuna Polyamid GmbH will shut its site in eastern Germany next month.
Earlier this year, LyondellBasell Industries NV sold three European assets to private equity firm Aequita, while BASF SE is cutting jobs. And for context, Ineos also holds a stake in Manchester United Football Club.
For your wallet, the bigger takeaway is that Europe's manufacturing mix is being reshuffled by energy and policy costs. That ripple can show up in everyday product prices and in the prospects of companies tied to Europe's industrial base, so keep an eye on who is scaling back and who is still investing.
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