GRANGEMOUTH, Scotland, April 21 /PRNewswire/ --

- Grangemouth Union's Strike Threatens Fuel Supplies to Scotland and North of England for at Least a Month

INEOS has warned that the Unite trade union's proposed strike at Grangemouth, Scotland's only crude oil refinery will close its plant for at least a month. The strike has been called by the Unite trade union, on the 27th and 28th April. The union action has left INEOS with no option but to begin shutting down the site immediately. Fuel shortages are likely to begin in Scotland as early as Friday, April 25th, and the whole of Scotland could be without fuel for at least a month.

The decision to start shutting down Grangemouth has been taken by INEOS on safety grounds. It is important that the plant is not only shut down safely but also remains safe through the strike period and this process can take many days. These measures are being forced on INEOS by the actions of the Unite trade union. Despite ongoing negotiations, company concessions and a commitment from INEOS that no changes will be made to existing pensions before April next year, the union has decided to rush straight to industrial action.

The union's rush to strike will also effectively close down a large proportion of the North Sea oil production and some gas production. A large proportion of North Sea Oil and Gas goes through Grangemouth, and supplies will dry up within a few days, affecting the whole of the UK.

Tom Crotty, CEO INEOS Olefins, said "The union is well aware that a 48 hour strike will cause fuel chaos in Scotland and the North of England for weeks on end. This is a huge oil refinery and they know you can't just turn it on and off like a tap. A month is our best guess but safety considerations will be at the forefront of everything we do. It is not our wish to suspend production at Grangemouth but the Unite trade union has given us no choice in the matter. They've deliberately chosen a course of action that is the minimum pain for them, but which will inflict the maximum pain on Scotland and the whole UK."

The union continues to mislead its membership with wildly inaccurate figures. They claim the refinery makes GBP3m a day. This is nonsense. The company needs to invest GBP750 million to make Grangemouth a competitive long-term business. With this level of investment, the site would not be profitable for at least 7 years. The need for change is urgent and undeniable.

The dispute centres around INEOS's determination to make Grangemouth a competitive long-term business. Addressing the pensions issue is part of this process. Currently over a quarter of the entire money that INEOS spends on employees at Grangemouth goes into the pension scheme and independent experts say that this figure could rise to almost 50% going forward. This figure is excessive and unsustainable in the longer term.

INEOS are proposing to retain a final salary scheme for all existing members, paying 1/60th salary for every year worked, making it one of the most generous private company pensions in the country. INEOS will still pay the lion's share of the costs, but for the first time the workforce will have to make a contribution to their retirement. INEOS has proposed a 6% employee contribution, phased in over the next 6 years. This will still leave employees in a better position than the majority of UK private company employees.

The company proposes a different plan for future new employees but one that will continue to allow it to attract highly skilled workers to the Grangemouth site where the typical remuneration package for a qualified technician is valued at almost GBP60,000.

Tom Crotty adds, "Unite's decision to strike threatens a GBP750 million investment package, hundreds of jobs and will damage the economy of both Scotland and the UK. It is even more frustrating when you realise that the consultation process was still running and talks had not been exhausted. We urge the union to join us at the negotiating table and turn away from this course of action that is designed to hold the country to ransom."

We are pleased that the unions will provide safety cover, and both parties see this as a very positive move to ensure the safety of the site during this dispute. Very positive conversations have taken place between the trade union and site management over the course of the last two days and continue to take place on all the safety aspects of this dispute.

INEOS wants to invest in Grangemouth, but the conditions need to be right.

WE ARE FIGHTING FOR THE FUTURE OF GRANGEMOUTH

NOTES TO EDITORS 1) INEOS is currently developing plans to invest GBP750 million in plant modernisation projects to secure Grangemouth's long-term future. a) An improvement programme on our G4 ethylene plant before 2011 b) Modernisation of the butadiene facility which supports G4 operating c) Improving economics on our polymer plants, enabling them to compete in Europe; d) Improving the performance of the Benzene plant and gasoline treatment unit. e) Optimisation of our Refinery to support the growth in the site along with ongoing development of shared service areas to meet the requirements of the new shape of the site. 2) INEOS is only part way through a broad consultation on pension reform, which started in September 2007 and is due to end on 30th June 2008. Following this 9-month period the Company has said that no major changes will be implemented for existing employees until 2009 and these will then be phased in over time. This goes well beyond the statutory 60 days consultation required by law. 3) The current Pension Benefit costs INEOS over a quarter of the salary bill at Grangemouth compared with the industry norm of 16%(1) and currently there is no sharing of this cost between Company and employee. Employees receive a final salary pension with a 1/60th accrual for no contribution. They are able to take this unreduced from age 60. (30 years service would therefore produce a pension of 50% of final salary for life at age 60, with no contribution from the employee). 4) The proposed Pension benefit will maintain a very good final salary 60th accrual pension for existing employees. It will be affordable in the longer term by phasing out over time unreduced early retirement and phasing in over time employee contributions, with employees eventually being asked to contribute around 6% for a 1/60th accrual 2014. Changes will apply only to future service. 5) The majority of company pension schemes across the UK have switched to Defined Contribution (DC) plans. It is proposed that new starters yet to bet employed by INEOS would be offered a good DC plan. DC pension plans now account for 83% of those open to new employees at FTSE 100 companies. 6) INEOS has a skilled workforce. The Company believes it is important to have a good remuneration package and pension in addition to salaries. The typical value of the remuneration package for qualified technicians at the plant is between GBP50,000 to GBP60,000 p.a. This includes salary, shift allowance, bonus and overtime. In addition to this the current non-contributory, final salary pension scheme with one 60th accrual, is worth more than GBP10,000 p.a. based on current funding and the availability of share ownership. 7) INEOS has a history of good industrial relations at 75 of its 76 facilities throughout the world. The company is committed to securing growth and a sustainable long-term future for each of its manufacturing sites. To achieve this at Grangemouth, over GBP750m of investment is necessary in the facility over the next five years. Failure to modernise and reform the pension plan arrangements will put this investment at risk and lead to a review of the site's current operations. 8) INEOS acquired Grangemouth from BP in 2005. There are 5 INEOS businesses within the assets at Grangemouth. INEOS Olefins, INEOS Polyolefins, INEOS Refining, INEOS Technologies and INEOS Enterprises. INEOS employs around 1400 people and the site occupies almost 1,700 acres of land - or around 640 football pitches. The site indirectly supports thousands of jobs in the local area.

Press contacts: Media Zoo, +44(0)207-978-7667; Mark Killick, (t) +44(0)7836634449; Sion Taylor, (t) +44(0)7768372714; Geraldine McGory (t) +44(0)7870-657531; Richard Longden, INEOS - +44(0)7710-371-998 / richard.longden@INEOScapital.com; David East, INEOS Innovene - +44(0)1324-476948 / david.east@innovene.com