Ineos pauses production at its three Hull plants, blaming UK gas prices

Ineos is pausing production at its three plants in Hull, with billionaire owner Sir Jim Ratcliffe blaming higher UK gas prices for “destroying” its manufacturing base.Ineos is one of the world’s largest chemical companies, producing 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 Humberside, taking in the supply chain.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.Sir Jim Ratcliffe blamed ‘ridiculously high’ prices (PA)PA ArchiveSir Jim, its founder and chairman, said Ineos 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”.He blamed “ridiculously high” prices for “destroying our manufacturing base and the jobs of hard-working people on Humberside”.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.Read MoreUK 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 war in Iran and disruption to oil and gas supplies through the Strait of Hormuz.Sir Jim has been highly critical of the challenges facing the chemical industry which he says are being worsened by Government energy and tax policy, including a tax on carbon emissions.The scheme was designed to reduce emissions across the economy by making it more expensive to burn fossil fuels and other waste.Sir Jim has said it has made the UK a less competitive place for manufacturers to operate compared with nations such as China and the US.Last year, he warned that Europe’s chemical industry was at a “tipping point” and only urgent action could save it.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 told the Press Association.“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.”A spokesperson for the Department for Business and Trade 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 £350 million 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.”