Ineos began temporarily shuttering production at its mammoth petrochemicals site in Grangemouth, Scotland on October 15 after walking out of the ongoing mediation process with the Scottish trade union Unite. The now Swiss-based group said it was taking down the units ahead of a union-threatened 48-hour strike scheduled to begin on October 20.

Unite has meanwhile called off the strike, in the words of its secretary, Pat Rafferty, "to protect this national asset from the scandalous behaviour of its owner. The plant should now start the return to full production and there is no excuse for this not to happen," Rafferty said.

Ineos said facilities at Grangemouth, its largest site, would be brought to a cold standby, as a hot standby would be too dangerous. The action affects the company's two crackers and two polyolefins plants as well as the site's refinery, owned to 50% by Chinese petrochemical giant PetroChina.

In a knock-on effect, the shutdown could endanger supply to customers at Grangemouth, such as BP and narrow deliveries of products such as naphtha to regional consumers in Scotland, Northern Ireland and the northern part of England. Some of these, observers said, might not have access to alternative suppliers, despite the generally glutted European naphtha markets. The arbitrage window to Asia is said to be closed.

Ineos, which said it had been "disappointed" by the lack of progress in negotiations with the union, declined to speculate on how long the plants could be offline, noting that industrial action in 2008 triggered a shutdown of around three weeks. The group told UK news media that "Grangemouth is financially distressed," adding that "the industrial action called by Unite has inflicted significant further damage on the company."

Management planned to put a proposal to the workforce on October 17, with a response expected by October 21. Ineos said it would review its position with its shareholders on October 22.

In early October, Ineos announced it had been forced to write down the value of its Grangemouth petrochemical assets to zero, due to repeated losses. Previously, it had said the site could be closed in 2017 barring lower costs and an alternative source of raw material. "After four years of heavy losses, the petrochemicals business is effectively worthless," said Calum MacLean, chairman of the Ineos Grangemouth Petrochemical business.

Earlier, the group had said an audit by Pricewaterhouse Coopers showed the site had lost £579 million since 2010, based on EBITDA and capital expenditure, explaining that this was due to an expensive cost base and excessive pension obligations.

Ratcliffe has repeatedly stressed that Ineos needs shale gas to play in the same league as rivals in North America. Plans for an ethane terminal at Grangemouth, similar to the one being planned at Rafnes, Norway, would be considered under the right conditions, the group chair said in Septemeber. These would include a loan from the UK government and concessions by the workforce.