LONDON: Scotland dodged a heavy blow to its economy yesterday with a deal to rescue an oil refinery and petrochemical plant and safeguard up to 1,400 jobs.
Operator Ineos struck a deal with the Unite trade union to rescue the Grangemouth complex on the Firth of Forth, under which workers accepted a pay freeze and a cut in pension benefits and agreed not to strike for three years.
“Redundancies will be very limited. There’s a future for this site, and it’s long-term sustainable,” Calum MacLean, chairman of Grangemouth UK, said at a news conference.
Ineos had previously said losses would force it to shut the petrochemical plant and could also threaten the future of the 210,000 barrel-per-day refinery, which provides around 70 percent of Scotland’s fuel.
A Grangemouth closure would have damaged the governing Scottish National Party as it campaigns for independence from Britain ahead of a referendum in September next year. Many Scots have told pollsters that their biggest concern will be the likely impact a separation would have on the economy.
Ineos said shareholders would invest £300m ($485m) in the site to cover losses and pay for a new terminal to import gas from the United States.
Ineos owns the refinery jointly with PetroChina, which holds a 49.9 percent stake. Ineos owns 100 percent of the petrochemical plant. “We’ve given the chemicals business another 15 to 20 years on the back of new raw materials, new contracts and significant investment,” MacLean said.
Union members, among other concessions, agreed to give up a final-salary pension plan for a defined-contribution plan.
“Obviously today’s news is tinged with sadness. Decent men and women are being asked to make sacrifices to hold onto their jobs, but the clear wish of our members is that we work with the company to implement its proposals,” Pat Rafferty, Scottish secretary of Unite, said in a statement.
Ineos said it would hold a 45 to 60-day consultation period with employees, unions and independent contractors to work out terms and conditions under the new deal.
“This is a victory for common sense. Unite advised employees to reject change and (reject a) vote for closure,” Ineos Group Chairman Jim Ratcliffe said.
The Scottish government has agreed to provide a £9m grant to support Grangemouth, and the British government has given initial approval for a £125m loan guarantee, Ineos said.
Reuters
