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GENERAL INTRODUCTION

• Good morning/afternoon
• Welcome to Wilton International
• Introduce self
• Explain what's ahead

WHAT IS WILTON INTERNATIONAL?

• Large, very important manufacturing site
• 'Blue chip' multi-national occupants
• Includes American, Saudi, Spanish, Singaporean, British, Norwegian owned assets
• Major players in chemical, petrochemical, energy, biofuels, industrial gases markets
• Working in tough global markets
• But quite able to compete in international arena/global marketplace
• Seen massive investment in last 10-15 years
• More than 1.25 billion
• Esp. in new sectors - biofuels, renewable energy
• Seeing some real challenges at moment
• Global recession/credit crunch - difficulty in raising money for investment
• People not buying things means people not making things
• Which means we're not making the plastic and petrochemical based things that go into those goods
• Hence seen some blows this year
• However  site has long history of innovation
• Has adapted to new opportunities
• Every reason to be confident about the future - heavy oil upgrader particularly exciting. Will have massive rejuvenating effect and lead to further investment
• 40 plus projects/potential investments in Tees Valley at moment (not all process related but nevertheless)
• Great opportunities in new/emerging markets
• If work as team and get Government support for existing as well as new industries future can be positive
• More jobs created in manufacturing in region than lost in recent years

SCALE - FACTS AND FIGURES

• 2000 acres (or put another way 1,300 football pitches)
• 8 mile perimeter fence
• More than 20 miles of internal roadway (between plants)
• 400 miles of Sembcorp-managed electrical cable circling site
• 150 miles of SembCorp-managed pipelines between the various plants

IMPORTANCE TO ECONOMY

• Huge
• Local and regional economy
• Around 5,000 people work here day to day
• 10,000 vehicles a day on site (cars, lorries, tankers)
• 9 major companies - SABIC, Huntsman, Sembcorp, Ensus, Yara, Artenius, Dow, Croda, UK Wood Recycling
• Around 50-60 support contractor companies (AMEC, Hertel, Aker Kvaerner through to smaller operations)
• Multiplier effect on jobs i.e. up to ten times the number of people who work here depend to a greater or lesser extent on our existence (estimate)
• Process sector accounts for up to a quarter of region's GDP - £8 billion of £32 billion
• NEPIC companies collectively employ c 40,000 people in region
• Traditional industries - Chemicals and power - huge been success stories for this area
• New industries - Biofuels/renewable energy - have potential to be
• Chemicals and power sectors have survived when others (shipbuilding, coal mining, micro electronics) didn't
• Fragmentation has brought challenges
• But some strength in fact that site/area no longer as reliant on fortunes of 'big two' ICI and BS.

HISTORY

• Established by ICI in 1946
• Complemented ICI site at Billingham (est. 1920s)
• Empire eventually extended to N. Tees (est. late 50s on reclaimed land)
• Designed to meet massive post war demand for plastics, fibres and other man made materials
• Many products (e.g. polythene. Terylene) invented during 1930s
• Site developed rapidly throughout '50s, '60s and 70s
• Oil crisis ('73) and UK recessions in early '80s and '90s did have impact
• Things began to change
• By early-mid-1990s ICI began to 'think unthinkable'
• Hanson threat and subsequent divestment of pharmaceuticals business (Zeneca) led to eventual sell off of bulk chemical assets as '90s progressed
• Teesside saw major business sold to former rivals

INVESTMENT

• Has seen more than £1.25 billion of investment in new and improved assets in the past 10 years - money that has been critical to providing a long term future for site and employees
• Available land in demand - 'new' site is emerging
• Undoubtedly one of the UK's most important manufacturing locations 'if not the most'
• Perhaps some of the most valuable 'real estate' in the UK - typical plant costing c£200m to build these days

CHALLENGE OF CHANGE

• Lots of change in past 10/15 years
• Long term ability to adapt
• Companies working in tough international markets
• No 'divine right' to exist
• Managers/workforce willing to adapt/innovate
• Risen to the challenge of change together
• ICI 'culture' right for the time
• Changed through international ownership
• Best of ICI and new company cultures merged
• Resulted in fresh ideas, new opportunities
• Substantial new investment.
• Site has seen less reliance on traditional base 'plastics and petrochemical' although these are still important and at core of what we do
• Emerging businesses - e.g. biofuels, renewable energy, recycling - offer tremendous possibilities

NATURAL ADVANTAGES (why here?)

• Skilled and experienced workforce (most important)
• Infrastructure - superb (pipelines, electrical distribution network, communications system - roads, rail lines, deep water port (UK's second largest) etc
• Integrated set of assets (what one plant makes another uses - chain from Cracker still important)
• Shared utilities and services (Sembcorp) - results in cost savings
• Easy of access - to basic raw materials (N Sea oil and gas, coal, water, electricity)
• Solid, flat land
• Plenty of available development land in heart of site  much interest in
• Supportive political environment - MPs, councils etc
• Excellent working relationships with unions, regulators, local authorities, surrounding communities etc

COMMON BELIEFS/RESPONSES

• Especially on big issues - safety, health, environmental matters; skills training etc

SAFETY

• Top priority
• Shared safety culture
• Regular site safety meetings (individually and collectively)
• Wilton first site in world to be awarded British Safety Council Sword of Honour (2005)
• Tremendous accolade - third party, independent recognition of safety standards operating at every level
• Extremely difficult to achieve - detailed audit. Prior requirement for BSC 5 Star Award
• No room for complacency
• High hazard operations
• Duty to employees, contractors, community to operate safely

PEOPLE/RECRUITMENT

• Ageing workforce issue - needs to be addressed
• Apprenticeships/training - very important even in difficult times
• TVPT - new process apprenticeship
• Existing companies need 300 over next 10 years
• Based on developing good 'all-rounders'
• Graduate and adult apprenticeships - also important
• NEPIC driving much of this
• Training/upskilling of existing staff - equally important

COMMUNITY MATTERS

• Common response essential
• Can't all do own thing
• Liaison panel process - ensures regular dialogue and effective response to issues
• Working with more than 300 other companies in chemical, pharms and biotechnology sectors under umbrella of NEPIC.

SABIC

• Saudi-owned (Saudi Basic Industries Corp)
• In world's top 10 of petrochemical manufacturers
• Largest and most profitable public company in Middle East (based on '05 figures)
• SABIC Europe located in Sittard in Netherlands.
• Purchased petrochemicals assets previously owned by Huntsman here and at North Tees in 2006
• Main plant at Wilton - Olefins 6 Cracker
• Three plants in one - ethylene, butadiene and gasoline treatment units
• Makes ethylene, propylene and butadiene
• Hydrocarbon 'building block' chemical products used by downstream customers
• Converted into other chemical intermediate products that go into virtually every man made product you can think of
• Cracker built in 1979 at a cost of £200 million
• Would today cost more than £1 billion
• Cracker at heart of site/chemical industry on Teesside
• Ethylene capacity of c850,000 tonnes a year
• SABIC also behind the £200 million low density polyethylene (LDPE) plant (originated by Huntsman)
• Takes much of ethylene output of Cracker
• One of lowest cost operating units of its type in world
• Will begin full operation shortly
• Produces around 400,000 tonnes of product a year
• High pressure - 3,000 bar (= pressure at bottom of Atlantic)
• 120 new jobs
• Underpins/sustains more than 750 existing SABIC jobs at Wilton and N Tees
• New business for site and for UK
• Makes UK net exporter of polyethylene

SONHOE

• Proposed £2 billion development
• Heavy crude oil refinery
• Convert c200,000 barrels of heavy crude oil a day into
• Diesel (European shortage)
• Kerosene (jet fuel)
• Naphtha (chemical feedstock)
• Hydrogen (growing hydrogen economy)
• Biggest private development in North East
• Huge importance to site/region/UK
• Site - as important as ICI coming to area
• Will extend lifespan - 50 years
• 400 permanent jobs
• Area - 2,000 construction and 5,000 supply chain jobs
• Massive development dominating entire centre of site
• Spin off tank farm and ports development
• UK - less reliance on foreign oil - Saudi/Russian
• Help to meet the anticipated diesel shortfall
• Boost to hydrogen economy

ARTENIUS UK

• Spanish owned (part of La Seda de Barcelona group) since '06
• Employs c.240 (post closure of T7)
• Manufacture polyester intermediates (PTA - white powder) which go mainly into polyester resins (PET - plastic chip)

PTA

• T8 plant one of most efficient in Europe
• Uprated in 2004 to bring T8 plant capacity to 510,000 tonnes p.a.
• Major emissions reductions in recent years
• T8 profitable but starved of cash following major financial problems involving parent company
• Debts of c.£500 million
• Forced into administration in July 2009
• Plant mothballed
• 137 staff laid off

M5

• Built 1996
• 150,000 tonnes PET capacity p.a.
• World's largest single stream polyester resin plant at one time
• Applications in packaging and carbonated soft drinks - e.g. PET in Coke bottles)
• Still running following T8 administration
• 105 staff remain

HISTORY OF PLANT

• Artenius is part of Spanish company
• Plant originally bought from ICI by DuPont in 1998
• DuPont and Turkish firm Sabanci formed JV - DuPontSA - in 2000.
• Renamed ADVANSA in 2005 when Sabanci took full ownership

ENSUS

WHAT IS IT?

• UK company (strong ex-ICI background)
• Building UK's first world scale bioethanol plant
• £250m facility
• Operational Q3/Q4 2009
• Right biofuel the right way

RAW MATERIAL

• Wheat
• Uses c1.2m tonnes a year
• Equal to 1,000 acres of growth a day
• i.e. Half this site
• 30,000 tonnes in silos at any given time

END PRODUCTS and PROCESS

• Food and fuel
• Food (animal feed)
• Fuel (bioethanol)
• Process involves fermentation/drying and distillation
• Fermentation - action takes place in 8 fermentors working in pairs. Batch process taking 50 hours. Followed by 10 hrs of cleaning/drying. Can't use antibiotics
• Distillation in columns. Produces 95 per cent alcohol 5 per cent water
• Leaves stillage - like dried crushed Wheatabix
• Process uses established technology (Katzen of USA)

FOOD

• 350,000 tonnes/year high protein animal feed (DDGS)
• Raw material is 'hard' wheat  i.e. kind that normally goes into animal feed (i.e. not bread)
• Will still go into animal feed at end of this process but ends up higher in protein
• Massive surplus of all kinds of wheat - 16m tonnes in Europe 3m tonnes in UK
• Wheat supplied by Glencore - massive in grain market.
• Glencore also take away resulting animal feed
• Plenty of wheat in East of England. Cattle who use feedstock generally in west (wetter)
• Europe has massive capacity to grow more
• Not about deforestation
• Not about creating world hunger 'dumping' of wheat adds to by wrecking indigenous markets.
• Not about increasing price of milling wheat for bread etc

FUEL

• An important petrol additive - ethanol (alcohol)
• Capable of supplying 3-400m litres p.a. - a third of UK demand by 2010
• Could ultimately expand to 600 m litres
• 99 per cent alcohol. 200 per cent proof
• No storage on site
• Transferred by 7.5km pipeline to Vopak at Seal Sands
• Pay heavy duty on it (more than petrol. Enough for week's transfer c £1m)
• Every drop produced needs to be accounted for no liquid waste at all
• Major customer 'Shell' 10 year contract

DISTRIBUTION/LOGISTICS

• 220 lorry deliveries a day
• Coming in by road and ship (i.e. by road from Teesport)

JOBS

• 110 direct jobs - 67 on plant, rest at Yarm HQ
• 1,500-2,000 farming jobs sustained

ENVIRONMENT

• Overall carbon footprint of plant - equivalent of reducing harmful exhaust emissions of 300,000 cars/year

FUTURE

• Helping Teesside becoming biofuel capital of UK (Biofuels Corp, D1 Oils, Petroplus etc)
• Ensus looking at further expansion in Europe

YARA

• Norwegian company
• Massive global manufacturer of fertiliser (ammonium nitrate)
• Part owner of GrowHow business (which has plant at Billingham)
• CO2 is normally a by-product of ammonia production

• £27 million investment
• Sources CO2 from Ensus
• Turns it from gas into liquid
• Exports high quality liquid CO2 into UK and Europe

• Plant will make c.700 tonnes a day or c250,000 tonnes/yr
• Largely automated process run from Ensus control room
• Half exported by road into UK markets
• Half via Teesport to Scandinavia and Germany
• Used by food and drinks industry (puts fizzy into pop)
• Also in power industry (coolant in nuclear industry)
• Each bullet capable of holding 900 tonnes of liquid CO2

GDF SUEZ

• Teesside Power Station began commercial operation in 1993
• Originally owned (until 2008) by Teesside Power Limited (TPL)
• Now owned by Gaz de France and Suez
• Plans for major uprate over next three years
• Make it even more efficient with four less GTs (8 currently)
• Was the world's largest combined heat and power plant at time 'dash for gas'
• Former Enron operated facility
• Cost around £800 million to build
• Capable of supplying 1875 MW of electricity
• Around 4 per cent of electricity needs in England and Wales
• Can provide backup steam and electricity to Wilton International

INVISTA

• Sadly announced closure in 2009
• Due to market overcapacity and economic downturn
• Facilities closed May 2009
• Owned by US firm Koch Industries since 2004
• First venture into Europe for Koch
• World's largest integrated producer of nylon and polyester fibres
• DuPont originally acquired business from ICI in 1993 and became part of Du Pont Textiles and Interiors business in 2002
• Manufactured variety of nylon intermediate products on Teesside - nylon polymer, nylon salt, adipic acid etc
• 6 separate manufacturing plant areas made nylon 6:6 polymer and adipic acid (nylon salt)
• Around 300 employees and 100 full time contractors
• Nylon goes into everything from carpets to sports and leisure clothing - brand names Lycra, Tactel, Kevlar, plus Stainmaster etc
• 1995-2002 DuPont invested £290 million on plant improvements (upgrading/new assets)
• Substantially reduced emissions
• COGA unit - wiped out 3 per cent of UK nitrous oxide emissions at a stroke
• KA non-boric project removed a major effluent (boric acid) and uses new process

SEMBCORP - BIOMASS POWER STATION

• £64 million renewable energy investment
• One of biggest investments by Singapore worldwide
• Generates more than 30 MW of electricity
• Enough to power more than 30,000 homes
• Using sustainable forms of wood as fuel source
• Making power in a cleaner, greener, more sustainable way
• First biomass power station of its kind (i.e. using 100 per cent wood as fuel) in UK when built
• Operational autumn 2007
• Created 15 new jobs
• Create/sustained hundreds in other sectors (forestry, farming, wood recycling, distribution)
• Carbon neutral -
• Four separate sources of wood
• Recycled (80,000 tonnes)
• Forestry round wood 'tops of trees etc'(ditto)
• Sawmill offcuts (ditto)
• Specially grown energy crops (aim - 55,000 tonnes) from area 3.5 times size of Wilton (=7,500 acres)
• Saving 200,000 tonnes of carbon dioxide emissions per year compared with a conventional power station
• That's the equivalent of the emissions of 67,000 vehicles on UK roads.
• SembCorp has invested c £233m in its assets (including £83m paid for the business) since 2003

HUNTSMAN

• An American company created by the entrepreneur Jon Huntsman.
• Huntsman originally acquired all of ICI Petrochemicals, titanium dioxide and polyurethanes assets for £1.7 billion in 1999
• Huntsman spent more than £500 million across Teesside in 7 years.
• Now own only the aniline and nitrobenzene plants at Wilton
• Nitrobenzene plant built by ICI in 1997
• Cost c.£70 million
• Products are intermediates in manufacture of polyurethane
• Polyurethane converted into everything from building insulation materials to soles of sports shoes to car seat foam cushioning
• Together with Tioxide Pigments business (Greatham and Billingham) these are the only assets now owned by Huntsman on Teesside
• 2008 £7m investment in new reactor technology (first of kind in world) to convert NB and H2 into aniline will uprate plant and make it more efficient (uses less raw materials)
• Major environmental impact - save c120,000 tonnes of CO2 a year (= emissions from 4,000 cars)

DOW

• Downstream customer of SABIC
• Announced closure in July 2009
• Will close end January 2010
• The US company owns and operates the ethylene oxide/ethylene glycol facilities
• Union Carbide of US originally bought these from ICI in a £70 million deal in 1995
• Dow then acquired them following a merger with Union Carbide in 2001
• Ethylene oxide goes into a range of surfactants (soaps, shampoos, washing liquids etc)
• Ethylene glycol in its raw form is antifreeze
• The main upgrade of EO took place in 1996 and a new EG plant was also built
• The combined cost was around £80 million
• Capacity c 300,000 tonnes EO and 240,000 tonnes EG

CRODA

• A UK business (Hull)
• Downstream customer of Dow and SABIC
• Announced closure of business immediately following Dow closure announcement (July 09)
• Purchased the ICI Uniqema business in 2006
• The plants make a wide variety of surfactant products
• Active ingredients in soaps, shampoos, washing up liquids etc (i.e. make them effective)

GREENSTAR WASTE EXCHANGE SERVICES

• Employs c 70 people
• Won 2009 Queens Award for Innovation
• Recycles/reuses plastic - c8k tpa
• Supplies M&S with plastic chip for milk containers
• Believes it is first to convert discarded plastic bottles into food grade plastic
• Also supplies cosmetic companies

ECCO NEWSPRINT

• UK company
• Announced an intention to build a paper mill
• Will convert recycled newspapers and magazines from NE and Scotland into 400,000 tonnes per year of high quality newsprint
• Energy intensive site attracted them
• Will employ c175
• Will support c 2,000 construction jobs
• Create/sustain 1,000 to 1,500 supply chain spin off jobs (collection, distribution etc)
• C £450-500 million investment
• Will be the biggest investment at Wilton since TPL (1993)
• Capacity of 420,000 tonnes a year
• Will add to amount of recycled paper on news stands in UK
• Will prevent more than half a million tonnes of waste paper a year going to landfill
• Prevent imports of newsprint from N America and Europe (currently 60 per cent comes in from abroad)
• Latest technology - reduced water consumption, energy use
• 66 acres of land leased from One Northeast for 125 years
• Planning permission achieved
• Financing being secured - bank and equity funding

UK WOOD RECYCLING

• Major wood recycling operation
• Began operations in 2007
• £4m investment - shredding, separating, storing, distributing facilities.
• Supplying Sembcorp with biomass fuel (c80,000 tonnes of our 300,000 tonne p.a.total)
• Created 40 new jobs
• One of largest wood recyclers in UK
• Of 10m tonnes available for recycling each year, currently only 1.5m tonnes actually recycled
• Around 6m tonnes goes to landfill - increasing greenhouse gases
• Other uses - Cattle, poultry bedding; chipboard
• Heavily contaminated wood rejected

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