The fate of the Leander Basel Rotterdam plant hangs in the balance as potential closure raises industry concerns

Recently, FNV and CNV, the two major trade unions in the Netherlands, revealed that the plastic precursor production plant located in the Musvelat area of Rotterdam Port in the Netherlands, a joint venture with Leander Basel (LYB) and Covestro each holding 50% of the shares, may face the fate of closure. Operated by LYB, the plant is one of the world's leading producers of propylene oxide and styrene monomers, which are integral to the manufacture of sustainable plastics and other critical products.

In the face of this rumor, LYB officials quickly responded, saying that "no final decision has been made" and emphasized that "company policy does not allow comments on market rumors or speculation". LYB further pointed out that it is conducting a comprehensive assessment of the business situation, asset management strategy and alignment with the company's overall objectives, with the aim of strengthening its core business, expanding its low-carbon and circular solutions, and improving its overall performance.

However, Dutch media reported that LYB was in talks with the union about a social plan for the 70 affected employees at the plant. It is said that LYB has informed employees on January 8, 2025 that the Masverat factory may be closed and layoffs are inevitable. The FNV union said employees were confused about their future and were currently negotiating severance packages and work transition support.

In retrospect, LYB announced last year a strategic review of its assets in the olefins, polyolefins, chemical intermediates and derivatives sectors in Europe. In May 2024, LYB CEO Peter Vanacker publicly stated that the company is considering a variety of coping strategies, including asset sales, plant upgrades, restructuring or closing, to deal with high energy costs and raw material shortages in Europe.

As co-owner of the Masverat plant, Covestro also faces challenges. The company is preparing to be acquired by Abu Dhabi National Oil Company and plans to implement a series of cost-cutting measures. As part of Covestro's global transformation plan, they are committed to improving operational efficiency, accelerating digital transformation, and broadening innovation channels to flexibly respond to rapidly changing market dynamics. Covestro emphasizes the need to streamline production processes, management functions and other business areas in order to remain competitive in the market.

Since its commissioning in 2003, the Masverat plant has been using LYB's unique propylene oxide and styrene monomer technology to produce chemicals. These chemicals are key ingredients in the manufacture of sustainable plastics, clothing, household goods and building materials.

While a final decision on the fate of the plant has yet to be made, the potential closure marks a major transformation for LYB's European business and highlights the many challenges facing the European chemical industry. The industry is closely watching the development of this situation, looking forward to LYB and Covestro can give a clear answer and solution as soon as possible.