ARTENIUS UK, the chemical company that went down with the loss of more than 250 Teesside jobs in July, was bought out of administration this morning.
The rescue by Korean giant Lotte’s KP Chemicals division will see more than half the workforce restored as both PTA and PET production is brought back on line over the next two months.
Mark Kenrick, the former business director who stayed on to beat out a deal with administrators Deloitte, said last night he was “relieved but knackered”.
He said: “I feel extremely pleased that we have the opportunity to start these assets up again and create a new business that will sustain up to 180 families. It’s good news that Wilton needs.”
The only UK producer of PTA - the starting point for the ubiquitous PET food packaging material, which is manufactured at just one other plant in Britain - Artenius’ fate was sealed in 2009 when Spanish parent La Seda de Barcelona hit financial problems. Overwhelmed by debt, it starved the Wilton operation of finance.
The final straw came when supplier Sabic put it into court for non-payment of bills. Several creditors by that point were owed millions. Today both Sabic and downstream customers were thanked by Mr Soo Young Huh, CEO and president of KP, for their support in getting the plant back into production.
Mr Kenrick said the plant’s credibility was still “superb in the market place” and, as most of the 150,000t of PET previously supplied had been replaced by imports, former customers were keen to place orders. The first should leave the site in early April.
Mr Kenrick said rebooting the plant in time for the peak trading period would be a challenge.
“The only way to make money is running at full capacity. That will clearly be difficult in the first few months, but the market has not shrunk significantly,” he said.
Around 120 of the original staff will be personally invited to join the new company, which is to be known as Lotte Chemicals UK (LCUK).
Stan Higgins, chief executive of the North East Process Industry Cluster said it was “good news for Teesside”.
He added: “I just hope that some of the other facilities might have some good news going forward.
“We are still looking across the world to see if there is a solution for the others,” referring to the Dow, Croda and Invista plants that have been or will soon be abandoned.
Mr Higgins said that Asia and South America were most active in the foreign investment market and it was likely that this was where most future investment would come from. “These industries have to reach a certain size to be able to compete. They have to grow their markets just like we had to.”
Simon Marsh, spokesperson for the Chemical Industries Association, said: “We think this is good news for the North-east and good news for the UK. We welcome the investment. KP has a strong record of acquisition internationally - it’s a big concern.”
Much of the anger that was directed at La Seda in the summer of last year is still raw on Teesside. The majority of workers left with only statutory redundancy pay after, in some cases, decades of service to the plant which was previously owned by ICI and Dupont. Whether or not they accept the offer to take up work again at Wilton, their claims against their former employer will still stand.
Who is Lotte?
Lotte is one of the biggest and best known groups in Asia with interests across a diverse range of industries.
With a US $49bn turnover it comes in fourth behind heavyweight Samsung in Korea’s corporate stakes and has ambitions to become as well known in the West.
It already owns or operates the licence for major brands including Krispy Kreme Doughnuts, TGI Friday’s and ToysRUs.
But among the UK process sector it is recognised through its KP Chemicals division as a major producer of PTA and PET.
Founded as a confectionery company in 1967, Lotte moved into hotel, retail, construction and finally the petrochemical sector, which it sees as a major driver of growth.
Turnover in that division alone is predicted to reach $40bn over the next eight years.