INEOS slashes jobs, shuts plants amid Europe’s chemical sector downturn

GERMANY – INEOS has announced plans to shut down two critical production units at its Rheinberg site in Germany, leading to the loss of 175 jobs. 

The decision stems from escalating energy and carbon expenses, compounded by the absence of protective tariffs against low-cost imports. 

The move targets the Allylics unit, responsible for producing a vital ingredient in epoxy resins used across various sectors.

According to the company, these sectors include defence, aerospace, automotive, and renewable energy, as well as an electrochemical facility that manufactures chlorine essential for water purification, pharmaceuticals, and sanitation processes.

In a statement, Stephen Dossett, CEO of INEOS Inovyn, highlighted the broader implications for European manufacturing. 

He described the situation as unsustainable, noting that producers in the US and China operate with access to affordable energy sources. 

Dossett pointed out that US tariffs have effectively curbed the influx of inexpensive chemicals from Asia, including those derived from discounted Russian oil and gas. 

Europe, by contrast, maintains open markets that allow high-emission imports to undercut local operations.

Since 2019, Germany’s chemical output has declined by 18%, resulting in widespread job reductions and scaled-back investments. 

INEOS itself has shuttered facilities in Grangemouth, UK, and Geel, Belgium, while preparing to close operations in Gladbeck, Germany. 

The company has also placed assets on hold in Tavaux, France, and Martorell, Spain, as economic pressures intensify.

Dossett warned that without swift policy changes, more sites could follow suit, heightening Europe’s reliance on foreign suppliers for basic materials. 

He called for government intervention to offset transition expenses in Rheinberg, where INEOS aims to safeguard approximately 300 remaining positions tied to PVC production. 

“We are doing everything possible to sustain viable operations, but this requires collaborative support from authorities to handle local impacts and rebuild market strength,” Dossett added in the statement.

The announcement arrives at a tense moment for the sector, as recent data from the European Chemical Industry Council indicates a 5% drop in overall production volumes during the first half of 2025, 

INEOS expressed regret over the Rheinberg decision and pledged to partner with workers and suppliers to ease the fallout. 

The company emphasized its commitment to minimizing disruptions while advocating for measures that could stabilize the region’s industrial base. 

This follows BASF’s earlier move to cut 2,600 jobs globally, including in Europe, as part of a €2.1 billion (US$2.3 billion) savings drive.

In the Middle East, where oil-derived plastics dominate, companies like Saudi Basic Industries Corp. (SABIC) are ramping up investments in bio-based materials. 

A SABIC executive mentioned during a Dubai industry forum that the firm allocated US$500 million this year to develop plant-derived polyethylene for food containers, aiming to cut reliance on fossil fuels by 20% by 2030

Subscribe to our email newsletters that provide busy executives like you with the latest news insights and trends from Africa and the World. SUBSCRIBE HERE