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ICI balks at plan to reduce capacity: European chemical shake-up resisted

Neil Thapar,Chief City Reporter
Friday 26 November 1993 00:02 GMT
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IMPERIAL Chemical Industries is understood to have blocked a radical restructuring plan to reduce serious over-capacity in Europe's petrochemical industry.

The proposal, reported exclusively by the Independent last month, involves the creation of a pounds 550m industry fund to help shut down inefficient ethylene plants at a cost of several thousand jobs in Europe.

ICI, the Dutch group DSM, and one other company are thought to have voted against the plan at a meeting held by the Association of Petrochemicals Producers in Europe, the industry body representing the region's 31 producers.

Without unanimous support, the plan would almost certainly fail. ICI is thought to be against it because it feels it did not contribute to the over- capacity. The APPE said yesterday it would call another meeting in mid December 'to allow clarification of some individual company positions and of the proposed conditions for the fund'.

The plan envisages each producer contributing DM30 ( pounds 12) per tonne of installed capacity to an industry pool. They would then be able to draw on the fund to offset closure costs.

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