On the day Artenius announced that it had been put on the market as its Spanish parent concentrated on keeping its mainland European operations afloat, SUE SCOTT considers if Wilton is mortally wounded by recent failures or if the “sons of ICI” can learn lessons from the past.

THE Germans have a word for it and, in the UK, it used to roughly translate as ICI.

“Verbunt means a very large complex where many synergies are derived from one plant’s product being another plant’s feedstock. They can share energy systems and resources and work collaboratively,” explains Paul Booth, president of Sabic Petrochemicals UK, one of the pillars of the Wilton processing site, which has survived the current brutal cull.

Like many of his former ICI colleagues flung to the four corners of the corporate globe when the chemical giant divested itself, Mr Booth’s paymasters’ boardrooms are a long way from Teesside - in his case 3,189 miles away in Riyadh.

And that is at the heart of the problems now facing Wilton. In ICI’s heyday, plants were hard wired together across the site.

“Although there was a river running through it, they were physically connected, just like a jigsaw, but ICI exercised commercial flexibility around the margins,” says Mr Booth. “If you had crude oil coming in at one end through what was, in effect, a verbunt and you had many products - polymers, PET, vinyl - coming out the other, there were lots of processes and sub processes that were more or less efficient over time. One year maybe the PET business was doing very well and perhaps the aromatics business was not. ICI looked at that in the round; if it was still making money, it was not overly bothered.

“When it was broken up in the ’90s, physically nothing changed and people stayed where they were. But commercial agreements were set up between those units that did not exist before and they became as inflexible as the pipes that hard wired them together.”

The cracks in those pipes are now beginning to appear. The collapse in June of Dow, swiftly followed by Croda - two previously integrated companies - were the first real signs that the old order was giving way to the stresses of recession, although former ICI textile firm Invista’s closure had hinted of it two months previously. The North Tees PetroPlus refinery, now up for sale by its Swiss parent, is another, while Artenius - a previously profitable plastics plant where local management decisions were subordinate to the boardroom battles going on in Barcelona - also looks precarious.

Artenius’ difficulties illustrate how Wilton’s past strength has become its present weakness. A former ICI company integrated into the Wilton supply chain, it was left critically exposed when its Spanish parent hit the financial rocks.

“This recession is a big wake-up call,” says Mr Booth. “As a chemical industry we are at a crossroads and as a nation we have to decide if it’s something we want to keep.

“I believe we should since it adds £20m/day to the UK coffers.”

Doomsayers who talk of Wilton tumbling like a pack of cards and a gathering crisis are quickly silenced - and, in truth, the complex, helped by the chemical cluster group NEPIC, has done well to attract major investment including MGT Power’s £500m biomass plant, in the teeth of the downturn.

Behind the scenes, though, they are sufficiently worried to convene a war cabinet of industry bosses to thrash out a letter to Business Secretary Lord Mandelson calling for cash to keep companies like Artenius ticking over while buyers are found.

The current difficulties facing Wilton are dramatically different from anything that has gone before and demand a “paradigm shift” in thinking, says Paul Booth.

His new incarnation of Wilton will not be based on commodity feedstocks but a knowledge supply chain, and government must intervene.

“Everybody is trying to do the right thing but everybody is going in slightly different directions so the result is inertia,” says Mr Booth.

“It’s about how we herd all the cats to head in the right direction. And as much as I would love to do that, to think any multi-national will is living in dreamland.

“The Government has to organise, to co-ordinate the endeavour towards focused research, picking out things that it wants the UK to be good at - getting the technology strategy board and industry and universities all homing in the same direction.”

Mark Lewis, energy advisor to NEPIC, agrees that managed change is needed fast.

“If the credit crunch had not happened, things would have changed more gradually but, when your back’s up against the wall, you have to do something to manage the cash,” he says. “We are working hard to understand what the future ought to be like and we are starting to see that, with the wider investments that are coming such as MGT and the National Industral Biotechnology Facility (at Wilton’s Centre for Process Industries), these things are the future but they are not going to be here tomorrow.”

Paul Booth’s future landscape is even more visionary. He believes “the landfills of today are going to be the oilfields of tomorrow”.

Having created a problem for the planet, the petro chemical industry could rescue both itself and the environment by breaking asunder what man had previously joined together.

“For a long time the chemical industry has survived on North Sea oil and gas. It’s not going to be switched off tomorrow, but they are not going to last forever.

“We may as well get used to the fact that there’s going to be a shift from naturally occurring resources to how we make the polymers of the future. That’s about the application of knowledge and taking a different route, whether that’s a bio route or a synthesis of some other pre-existing material.”

For a new feedstock to be based on previously used materials, the supply chain going out of the home needs to be as sophisticated as the one that filled it with plastic bottles in the first place. And the process industry can play a part in shaping that, he says.

“The chemical industry has an opportunity to start looking forwards and thinking about the concept and what the implications of that would be. There is no point waiting until we’re washed up on a beach and thinking what are we going to do next; we need to think about it in the lifeboat,” he says.

Being a pragmatist, he also believes the past has much to teach us.

It may well be time to rebuild the verbunt and crucial to that will be the urgent completion of the upgrader project, the biggest single investment planned for Teesside since ICI’s arrival, which will extract oil from sand.

It would be an opportunity to reconstitute the jigsaw to create a new picture of Wilton, he says.

In this brave new world, next generation polymers will be created alongside those created from traditional fossil fuel sources - but with different separation lines feeding them.

For all that to happen fast enough to make a difference, he believes government must enter a partnership with private enterprise to skew it in the right direction.

“I don’t think there’s such a thing as a free market,” he says.

“Sometimes we might decide we need to do something extraordinary to one for the benefit of the whole.”

Spoken like a true son of ICI.

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Evening Gazette NE Business