Lotte Chemical UK, in Wilton, is staying in region

The Advertiser Series: Lotte Chemical UK's new PET plant under construction Lotte Chemical UK's new PET plant under construction

A CHEMICAL firm is cutting 70 North-East jobs after falling victim to international market pressures.

Lotte Chemical UK, in Wilton, near Redcar, is closing its pure terephthalic acid (PTA) factory after 32 years.

Bosses have blamed the move on increased competition from China and falling market prices.

The company, which employs about 200 workers, says its remaining two North-East plants will continue to operate.

The news comes just weeks after Teesside power station operator Sembcorp revealed proposals to close a coal-fired boiler in Wilton Power Station and sell its asset protection and security business.

Lotte's PTA plant, known as T8, has made about 11 million tonnes of the substance, which is a white powder used across Europe to make polyethylene terephthalate (PET).

PET is a plastic intrinsic to the production of soft drinks bottles and food packaging.

Last night, Mark Kenrick, Lotte Chemical UK chief executive, said the plant, which makes about 500,000 tonnes of PTA every year, was struggling to compete against market rivals, particularly from China, who can make up to eight million tonnes a year.

Mr Kendrick said production costs were also rising, but confirmed the Korean company's PET production plants, including its new £60m LC1 factory, which was supported by £6.7m of Government Regional Growth Fund cash to create about 55 jobs, were not affected.

He said: “PTA is a global product being traded on, and shipped between, all major continents.

“The market has seen rapid changes in 2012 and 2013, resulting in market prices being too low for us to compete with more modern world-class assets operating at lower manufacturing and energy costs.

“The global supply and demand balance is unlikely to improve as huge additional PTA capacity grows stronger in China.

“The tremendous efforts by our teams to reduce costs and operate differently have ultimately not been sufficient to overcome the lack of competitiveness of T8.”

Dr Stan Higgins, chief executive of the North-East Process Industry Cluster, said the news was extremely disappointing, but reflected the nature of the evolving global industry.

He said: “Every year there is new capacity coming online around the world, from the Americas to the Far-East, and if you don't keep up you become vulnerable.

“When we opened the world's largest polyethylene plant in the world at Sabic, that meant a smaller plant in Lancashire closing and that is the nature of the industry.

“However, it is still very disappointing to see North-East jobs going, though I expect the workers will find new positions.

“We have developments such as Air Products' energy-from-waste power station and SNF's chemical plant coming to Billingham, which are creating posts.

“Lotte are a first-class company, their training is some of the best in the industry, and I know they will be giving as much assistance to their staff as they can.”


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