600 jobs lost as BP shuts ethylene refinery

BRITISH PETROLEUM is closing its loss-making ethylene refinery at Baglan Bay, West Glamorgan, with the loss of 600 jobs.

It is the first European petrochemicals producer to announce a total closure of an ethylene plant. Ethylene is the industry's most important basic product used in plastics and fibres.

The move, which has been expected for months, stems from recession and serious overcapacity in Europe's petrochemicals sector. BP said at least five plants need to be closed by Europe's producers to improve prospects.

Costs of the closure will be included in a pounds 200m exceptional charge in BP's 1993 results. Although the exact sum is not disclosed, a large part of the write-off relates to Baglan Bay.

The plant, which has lost 'tens of millions' in the past two years, has been operating at half its 330,000-tonne annual production capacity. It is considered uncompetitive by global standards because of its size and lack of infrastructure and flexible technology.

'We saw no signs of an end of the recession. With no action by the industry to cut overcapacity we had to get control over our own destiny,' BP said.

However, the site will continue to produce other types of chemicals including propylene and gasoline, in which the company believes it is more competitive.

The EU is to investigate the proposed merger between Shell and Montedison of Italy affecting their worldwide polyolefins business.

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