17th Dec 2025 14:20
(Alliance News) - UK Business Secretary Peter Kyle was "convinced" there is a path to sustainability for the ethylene plant in Grangemouth ahead of a GBP120 million Government investment, he has said.
The deal will provide funding for the Olefins & Polymers, O&P, plant – the biggest in the UK – on the site and is hoped to secure 500 jobs, along with a GBP30 million investment from the plant's owners, Ineos.
It comes after roughly the same number of jobs at Grangemouth were lost when the oil refinery there closed earlier this year.
Speaking at a press conference alongside Chancellor Rachel Reeves and Scottish Secretary Douglas Alexander, Kyle said he had been persuaded of the plant's viability by ownership, including the firm's Chair Jim Ratcliffe.
"I have been convinced there is a pathway to sustainability, but they needed to get through this period in time to transition to profitability," he said.
"My officials and myself came to that conclusion.
"I think this is good value for money, for the public purse and is very good value, particularly for people who work here.
"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.
"That supply chain would have collapsed had the government not stepped in and worked with Ineos to get the situation we have today."
Alexander said the funding was effectively "bridging finance", in the hopes that the plant would be profitable in five years after GBP100 million was spent to keep it open in the past year.
The investment, the chancellor said, was as a result of the "change" voters wanted at last year's 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 to provide this support alongside business, because there has to be a viable path to profitability," she said.
In a statement, Ineos owner Ratcliffe said: "Through the partnership, Ineos and the UK government have demonstrated their commitment to operating the site and maintaining jobs.
"The agreement includes safeguards to protect taxpayers' money, such as strict assurances that the funding can only be used to improve the site, and also gives the UK government the right to share in future profits."
Scottish Government Cabinet Secretary for Climate Action & Energy, Gillian Martin, said: "This is a very welcome announcement.
"The Scottish government has been calling upon the UK government for months now to intervene to protect jobs at Grangemouth and Mossmorran at a scale seen in other parts of the UK. This news will give a much-needed boost to the Grangemouth community and the workers at Ineos O&P.
"The Scottish government announced an GBP8.5 million investment last week at the Grangemouth industrial cluster including in MiAlgae and Celtic Renewables which will create up to 460 jobs, demonstrating that a long-term industrial future at the site is achievable. We will continue to do all we can, within our limited powers, to achieve that."
Unite General Secretary Sharon Graham said: "Unite has long been pushing government to take bolder and more strategic investments in core British industries like Grangemouth to protect jobs and drive growth.
"This intervention for the future of the ethylene plant is a welcome step in the right direction – a sign it might be beginning to listen – but it must not be a one-off."
She said it needs to be the start of a "new direction of travel" and called for a "joined-up strategy for a workers' transition, backed by investment".
By Craig Paton and Henry Saker-Clark, Press Association
Press Association: Finance
source: PA
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