The owner of the UK’s largest ammonia production facility on Teesside says it is proposing to close the operation permanently, after months of mothballing.
CF Fertilisers revealed it will not restart ammonia production at its Billingham plant, in a move that could result in up to 38 redundancies. The decision follows months of shutdown at the facility which was temporarily closed in August last year, in the face of spiralling gas prices at the time, and before that in autumn 2021.
Now CF Fertilisers UK, a subsidiary of US-based CF Industries Holdings Inc, says closure is necessary to secure its UK business in the long term, despite natural gas prices having fallen dramatically since levels seen last year. The firm, which has previously seen Government support to continue production on Teesside, will continue to import ammonia to make ammonium nitrate (AN) fertiliser and nitric acid at the Billingham site.
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An announcement from the firm said: “CF Fertilisers UK has made this proposal due to its forecast that producing ammonia at Billingham will not be cost-competitive for the long-term compared to importing ammonia due primarily to projected high natural gas prices in the United Kingdom relative to other regions and the impact of carbon costs.
“Additionally, shutdowns in recent years of industrial customers’ UK operations that had consumed significant ammonia volumes for their businesses have created a supply-demand imbalance for ammonia production at the Billingham Complex. The company believes that ample global availability of ammonia for import, including from CF Industries’ North American production network, will enable more cost-competitive and efficient production and sales of ammonium nitrate fertiliser and nitric acid for its UK agriculture and chemicals customers moving forward.”
CF said it will begin collective redundancy consultations for Billingham staff with union Unite and employee representatives. It suggested some job losses would be avoided by redeployment within the company.
The shutdown of the ammonia plant could impact the UK food and drink industry – a major user of the carbon dioxide which is a by-product in ammonia production and is used in everything from the slaughter of animals to packaging and the carbonisation of drinks. When the temporary shutdown was announced last year, the British Meat Processors Association called on the Government to step in or face animal welfare issues in which pigs and poultry would be unable to be sent for processing.
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