Report - - Elementis Teesside, June 2011 | Industrial Sites | 28DaysLater.co.uk

Report - Elementis Teesside, June 2011

Boba Low

28DL Full Member
In June I visited this, the remnants of the UK's only Chromium plant, with Larey and Dempsey, as part of a spontaneous two-day trip to the industrial wastes of the North East...

In terms of the history of the site and regarding its closure, I was going to write a synopsis of the company's history but realised whist doing my research that nobody could possibly better describe the situation than the site's former manager, Bruce Norman, did in an open letter regarding the site's closure. He writes,

In the last few days there has been much media attention paid to the potential closure of the Corus Teesside Steelworks with the loss of thousands of jobs and the demise of one of Britain's Industrial successes. What has received far less attention is an equally significant closure happening 10 miles up the river at the Eaglescliffe site of Elementis Chromium. An industrial site with a proud heritage that stretches back 175 years. The closure may only impact a few hundred people rather than several thousand, but is equally devastating for the employees and families involved.

During the 1990's Elementis Chromium, or British Chrome and Chemicals as it was then, was also a British industrial success story. It received a Queens Award for Export Achievement and during the period 1995-1999 was achieving operating profits in excess of £20 million a year. In 1998 the company commissioned a ground breaking new Chromic Acid plant, built using technology developed on the site, for which it which received a second Queens Award for Technological Innovation.

So how is it that only 10 years later the site is facing closure? During this time the site has faced many challenges......increased competition from Russia, China, and Kazakhstan, high UK energy costs, a strong currency........... but these are no different to those it has faced many times in the past....... The real difference has been in the quality of strategic decisions made to respond to these challenges and for this responsibility must lie with the London based board of the parent company Elementis PLC and successive generations of directors.

For the first 165 years of its existence, decisions about the future of Eaglescliffe were largely determined by management located at the site. Major investment decisions required approval of the board in London but the board trusted local management and respected their views. The goal of the experienced site management team was to take the right long term decisions for the chrome business so that they would be able to hand on a stronger business to their successors. This approach worked.

All that changed in the late 90's. A new Chairman and Chief Executive of Elementis PLC were appointed who believed that they understood the chrome business better than local management. Decision making moved to London and decisions were no longer taken with a view to the long term, but rather to meet the short term demands of the City. Worse was to follow. In 2005 the parent company in London came under the control of American Venture Capitalists. They bought a minority stake in Elementis PLC and, working with the Institutional Investors, ousted the existing board of directors and installed their own people. Having gained control they needed to do something dramatic to impress the stock market and boost the share price so that they could sell up and move on. The only dramatic short term action they could take was to cut costs, close plants and sack people. Eaglescliffe became the sacrificial lamb.

One of its two primary production kilns was closed along with the new award winning chromic acid plant .Two hundred people were made redundant. The share price rocketed and the venture capitalists sold out earning themselves a profit of £50 million. Where did this £50 million come from? It came from us, our pension funds and endowment policies, as the institutional investors bought back the same shares they had sold two years earlier at a much higher price. Not unsurprisingly the price is now well below where it was when the venture capitalists became involved .Not only did the new board shut down economically sound facilities they also stripped the site of its remaining experienced management and moved the management of the chrome business to a new headquarters in New Jersey. The PLC board remained in London but much of the decision making moved to the USA.

Despite the savage blow of losing half of their capacity and two thirds of their colleagues the local management and workforce at Eaglescliffe again adapted and by 2008 were making substantial profits. The company has been very guarded about the exact level but it must certainly have been well in excess of £10 million.

At the end of 2008 sales at Eaglescliffe fell dramatically as they have at most other manufacturing facilities around the world. Rather than work to develop a plan to ensure the plant survived the "credit crunch" the board simply announced its closure. Had previous generations of management taken the same knee-jerk short sighted approach the plant would not have survived 10 years let alone 175.
In his letter, Bruce Norman openly points the finger of blame at the Elementis board of directors, stating,
Over 10 years they have allowed a situation to develop where neither at board or senior management level does the company have anyone with any strategic experience of the chrome business at all
This is my humble offering from this awesome site, explored on a day of, from what I gather, rare tranquility. All shots were taken on a Canon EOS 500 35mm.
















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