The restructure will see CF Fertilisers close its Ince facilities and concentrate its manufacturing operations exclusively at Billingham in Teesside. Billingham is the UK’s largest plant for producing ammonia, ammonium nitrate (AN) and carbon dioxide (CO₂).

The Ince plant has been idled since September 2001, when high gas prices made operations unprofitable. The permanent closure could result in the loss of up to 283 jobs.

In addition, the company will transfer some corporate functions to its headquarters at Deerfield, Illinois, in the US, with the potential loss of another 55 positions. There are also plans to optimize Billingham’s manufacturing by closing the site’s operations center, which could see up to another 33 redundancies.

“As a high-cost producer in an intensely competitive global industry, we see considerable challenges to long-term sustainability from our current operational approach. Following a strategic review of our business, we believe that the best way to continue our legacy of serving customers in the UK is to operate only the Billingham manufacturing facility moving forward while addressing cost pressures throughout our business,” managing director Brett Nightingale said.

CF Fertilisers said Billingham has sufficient capacity to meet all forecast domestic demand for AN and is also about 10-20% more efficient than the Ince facility, as well as having the ability to import and store ammonia at the site’s 40,000 t tank. In addition, the site has a meaningful volume of ammonia and nitric acid contracts that pass through the natural gas costs to customers, providing a foundation for profitable operations.

For many producers globally, more than 70% of the total cost to produce ammonia is from natural gas. CF Industries said forward curves for the gas suggest that nitrogen facilities in both the UK and Europe will be the world’s high-cost marginal producers for the foreseeable future.

Author: Elaine Burridge, Freelance Journalist