GRANGEMOUTH, Scotland, April 18 /PRNewswire/ -- INEOS, the owner of the Grangemouth oil refinery, has today been told by the Unite trade union that its members will not provide safety cover during a planned strike from April 27th to 29th. Unite also told the company that it had just ten days to remove all oil and gas from the plant and make the site safe - a physical impossibility. INEOS is deeply concerned about the Union's cavalier approach to safety at one of the country's largest oil refineries. Tom Crotty, Grangemouth CEO said, "I have written to Mr Tony Woodley, Unite's joint general secretary, expressing our concerns. INEOS has always prioritised site safety, and I'm deeply concerned that the Union is putting other issues ahead of safety."

INEOS is also extremely worried that the strike action called over proposals to make changes to the pension plan will threaten the future prosperity of the site and might ultimately lead to the loss of hundreds of highly skilled and well-paid jobs.

The management team at INEOS is determined to build a world-class facility at Grangemouth, the home of Scotland's only crude oil refinery. Since acquiring the refining and petrochemical site in 2005, INEOS has already invested over GBP100 million in plant, infrastructure and improved reliability and there are plans in place to invest hundreds of millions more in plant modernisation projects to secure Grangemouth's long-term future. However, to attract this level of investment, INEOS must ensure that Grangemouth can remain competitive.

The Union's objection is to proposals by INEOS to change the pension scheme as part of this wider modernisation. Currently over a quarter of the entire salary bill at Grangemouth goes into the pension scheme. Independent pension's experts say that this figure could rise to almost 50% going forward. INEOS considers this figure is excessive and unsustainable in the longer term and will harm the future of the Grangemouth site.

The amended pension scheme proposed by INEOS is very generous. It will remain a final salary scheme for all existing members. It will pay 1/60th salary for every year worked and the company will still pay the lion's share of the costs. The main difference will be that the current workforce will have to make a contribution towards their pension for the first time, bringing them into line with the vast majority of employees in the UK and with other INEOS employees. The company proposes to phase these contributions in over a period of several years.

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

The vote for strike action is particularly frustrating for INEOS given that the nine month consultation process has not been completed. Talks have been scheduled to continue until the end of June. The company continues to seek open discussion with the Trade Unions and Independent representatives to continue to emphasise how the pensions issue is part of a bigger picture surrounding the whole long term future of the Grangemouth site.

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 hundreds of millions of pounds 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 European markets;

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% (i) 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 2011. 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 be 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.

(i) Calculated by Watson Wyatt based on an INEOS comparator group.

Press contacts: Media Zoo, +44(0)207-978-7667, Mark Killick, (t) +44(0)7836634449, Sion Taylor, (t) +44(0)7768372714, Geraldine McGrory (t) +44(0)7870-657531 INEOS : Richard Longden, (t) +44-7710-371998, (e-mail) richard.longden@ineoscapital.com David East, (t) +44(0)1324-476948, (e-mail) david.east@innovene.com

Press contacts: Media Zoo, +44(0)207-978-7667, Mark Killick, (t) +44(0)7836634449, Sion Taylor, (t) +44(0)7768372714, Geraldine McGrory (t) +44(0)7870-657531; INEOS : Richard Longden, (t) +44-7710-371998, (e-mail) richard.longden@ineoscapital.com; David East, (t) +44(0)1324-476948, (e-mail) david.east@innovene.com