Mitsubishi Chemical Group could cease methacrylates production in Billingham - 238 jobs at risk

Mitsubishi Chemical Group says it may cease production on Teesside, blaming high energy costs and reduced demand. Credit: Mitsubishi Chemical Group

More than 200 jobs are at risk because a chemical firm has warned it could cease production on Teesside due to the cost of gas.

The Mitsubishi Chemical Group has started consulting employees about its proposal to stop methacrylates production at its Billingham Cassel site, affecting 238 workers.

Malcolm Kidd, vice president for the methacrylates business in Europe, the Middle East and Africa, said: “This is a very sad day for everyone associated with our business on Teesside.

"Our employees and various partners have worked tirelessly and creatively to support the business in delivering high quality products safely and sustainably over decades but our position now and looking ahead appears simply unsustainable. “Every effort will now go into supporting our skilled and talented production technicians, and engineering, technical and business support staff during this difficult period.”

The company is the world's largest producer of methacrylates, the building block of acrylics.

It is used for things like protective screens, signage, paints and coatings, fittings and furniture, baths and automotive parts.

The Cassel site has the capacity to make about 200,000 tonnes a year of methacrylates but the process requires "significant quantities" of natural gas.

The methacrylates facility in Billingham has not been running since January 2022 - initially to undertake a planned overhaul event. Since September there has been no production due to the impact of rapidly escalating natural gas prices caused by the ongoing situation in Ukraine.

There has also been a significant downturn in the European economy as a result of high inflation, resulting in weaker demand for methacrylate end product acrylics, the company said.

Mitsubishi's separate electrolyte business, which makes battery acid for electric vehicles - also at the Cassel site - is not part of this announcement.

A final decision on the proposal for methacrylate operations at Cassel is expected to be made in January following the consultation period.

Acrylics manufacturing operations at the Cassel site began under ICI in 1930and continued until 1999 when the business was bought by Ineos.

It was sold to Lucite International in 2002 and was acquired by Mitsubishi Rayon, now Mitsubishi Chemical, in 2009.

Alex Cunningham, MP for Stockton North, said: “Today’s announcement from Mitsubishi Chemical Group is blow to both the local area and the 238 people and their families who will be directly affected by Mitsubishi’s decision to explore the cessation of methacrylate’s production in Billingham.

“We’re hearing the same story of rising gas and energy prices clobbering industry again and again and I have lost count of the number of times I've warned the Government that rising energy prices and a failure by the Government to tackle it are crippling firms like Mitsubishi. 

He added: "All of these warnings have fallen on deaf ears, with Ministers abandoning all pretence of them having an industrial strategy and insisting the problem is dealt with by industry alone.

“Now hundreds of jobs in my constituency hang in the balance alongside many others that are part of the Mitsubishi supply and customer chain. 

"This announcement is a result of the Government’s continued failure to act despite ample opportunities. It’s time they do so now.”

Want a quick and expert briefing on the biggest news stories? Listen to our latest podcasts to find out What You Need To know...