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The EOEG manufacturing plant located at Wilton and owned by Dow Chemicals is slated to close in late January 2010 and is available for purchase. The following information is given without prejudice and interested parties requiring further information should contact NEPIC.

The plant originally owned by ICI was purchased by Union Carbide in 1995 and entered into Dow ownership following the merger with Union Carbide in 2001. The EO facilities underwent a major upgrade in 1998 and a new EG plant was constructed for a combined cost reported at £80 million. The Wilton unit is the only EO production facility located in the UK with a rated capacity of 318ktpa EO and 240ktpa EG. Despite recent studies by NEPIC confirming that Wilton has above average operating performance in European terms and also was considered favourable to strong in terms of overall competitiveness, Dow announced intended closure in 2010.

Capacities and Start-Up/Upgrade Dates of Major EO Plants in Europe

* Rebuilt/upgrade

EO remains a key raw material with forecast long-term growth for EO derivatives (EOD's) of ~5% per year. However, the Wilton unit suffered a softening of demand as a result of the recent global slowdown. In addition, as MEG prices and margins have come under pressure from recent capacity additions in the Middle East, the Wilton unit has also been affected from the relatively low proportionate production for EOD's (approx 40%), hence high production of MEG.

Located adjacent to the unit is EOD facility currently operated by Croda, including a unit owned by Shell. Immediately following Dow's EO announcement, Croda also announced closure plans. The world class EOD facility located adjacent to the plant is also available for sale to underpin the EO project and/or use for general speciality chemical production.

Future opportunities

The key to implementing a successful business plan would be to give confidence to customers, re-establish demand from those customers with closure plans and/or develop new customers; prospective purchasers should have the market expertise and resource to undertake this critical activity. In addition those purchasers able to bring directly or indirectly other significant EOD projects would have a distinct economic advantage in a large European market with a wide variety of EO end uses.

European Breakdown of EO Usage

Independent consultants consider that a profitable and viable EO business is still possible; with capital investment the EO/MEG split could be optimised and directed toward higher added value DEG and TEG. The capital costs for these improvements have been estimated at ~£50 million and are being currently independently reviewed. In addition improvements in input costs and operating efficiency have been scoped in order to further improve the costs of production. There are considered 3 viable operating scenarios: maximised EO production (200-300ktpa EO), maximised DEG/TEG production, mixed EO and DEG/TEG production (<200ktpa EO and ~100ktpa DEG/TEG).

The major raw materials are all available locally; the Wilton cracker, owned by SABIC, supplying ethylene and oxygen supplied by BOC. Utilities are supplied by Sembcorp through the Wilton Site infrastructure. Additionally certain activities as security, fire/emergency response etc are available centrally from the Wilton Site.

Prospective purchasers may receive financial support for the continued business operation including the direct employment of 55 personnel together with future capital investment plans. Similar business acquisition proposals have received substantial support. In addition interested parties have indicated a willingness to give support to a prospective purchaser in order to secure continued EO & EG production.

Interested parties should contact Dr Stan Higgins at NEPIC further information which is available subject to a non-disclosure agreement.

stan.higgins@nepic.co.uk
NEPIC, The Wilton Centre, Room H224, Wilton, Redcar, Cleveland TS10 4RF
Tel: +44 (0)1642 442560

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