Business Secretary Peter Kyle has declared he is "convinced" a pathway to sustainability exists for the crucial ethylene plant at Grangemouth, following the announcement of a major £150 million investment package.
A Crucial Investment for Jobs and Industry
The deal involves a £120 million commitment from the UK Government, which will be supplemented by a further £30 million from the site's owner, Ineos. This funding is directed at the Olefins & Polymers (O&P) facility, the largest of its kind in the country. The primary goal is to safeguard approximately 500 jobs at the site.
This intervention comes as a significant relief to the local community, following the loss of a similar number of positions earlier this year when the adjoining Grangemouth oil refinery ceased operations.
Government and Industry Partnership
Speaking at a press conference on Wednesday alongside Chancellor Rachel Reeves and Scottish Secretary Douglas Alexander, Mr Kyle explained his confidence. He stated that discussions with the plant's ownership, including Ineos chairman Sir Jim Ratcliffe, had persuaded him of the site's long-term viability.
"I have been convinced there is a pathway to sustainability, but they needed to get through this period in time to transition to profitability," Mr Kyle said. "I think this is good value for money, for the public purse... The sustainability that is going to be produced from here will have a huge impact on the workers here, on the broader community, but also the thousands who work in the supply chain locally."
Mr Alexander described the funding as effective "bridging finance", with the expectation that the plant will return to profitability within five years. This follows around £100 million spent in the last year simply to keep operations running.
Reactions and the Road Ahead
Chancellor Rachel Reeves framed the investment as a direct result of the political "change" demanded by voters in the 2024 general election. "They elected a Labour Government with more Scottish Labour MPs, and that change means more good jobs paying decent wages and that’s exactly why we’ve stepped in," she stated.
In a statement, Sir Jim Ratcliffe of Ineos welcomed the partnership, noting the agreement includes safeguards to protect taxpayers' money and gives the government a right to share in future profits.
The announcement was welcomed by Scottish Government Energy Secretary Gillian Martin, who highlighted a separate £8.5 million Scottish Government investment in the Grangemouth industrial cluster announced last week, aimed at creating up to 460 jobs in green technology firms.
Unite union general secretary Sharon Graham called the move a "welcome step in the right direction" but urged the government to ensure it is not a one-off. She called for a comprehensive, joined-up industrial strategy with continued investment to secure a long-term future for core UK industries and their workforce.
