GRANGEMOUTH, Scotland, April 18 /PRNewswire/ --

- Grangemouth Strike Threatens GBP750 Million Investment and 650 Jobs

- Union Claims Exposed as Completely Untrue

- Union Agrees to INEOS Safety Demands

INEOS has revealed that the proposed Grangemouth strike threatens a GBP750 million investment and 650 jobs at the plant. Hundreds of further jobs could also be lost in the local community and elsewhere in the UK.

INEOS has also exposed union claims about the pension scheme as being completely untrue. Unite has claimed that INEOS took GBP40 million from the pension scheme. In fact no money from the pension fund has been transferred to INEOS. Every penny that was in the fund when INEOS took over from BP in 2005 has remained in the fund. INEOS has called on the Unite union to stop misleading its membership.

INEOS is relieved to announce that the unions have agreed to INEOS' insistence that safety must be the top priority during the dispute. Yesterday Unite told INEOS that their members would not provide safety cover. Today they have backed down and agreed to cooperate with the company to manage an orderly and safe shutdown of the refinery.

The GBP750 million investment is being sought by Management as part of a plan to build a world-class facility at Grangemouth. The GBP750 million investment is urgently needed to modernize the site. The G4 ethylene plant requires over GBP200 million to be spent on it by 2011. Grangemouth also needs funds to improve its Butadiene facility and the performance of its Polymer and Benzene plants. This money is on top of the GBP100 million already invested at the site in plant, infrastructure and improved reliability by the INEOS Group.

According to Tom Crotty, Grangemouth CEO, "The vote for strike action is hugely disappointing. We need to spend GBP750 million modernizing Grangemouth and a strike will make it virtually impossible for us to achieve this. If we can resolve this issue, we can build a world class facility at Grangemouth."

Without investment the site will have to be scaled down and INEOS believes that at least 650 direct jobs will have to go with hundreds more indirectly being threatened. INEOS also believes that these jobs will probably be lost within a three year period as old infrastructure comes to the end of its life and it is uneconomic to modernise or replace it.

Tom Crotty adds, "We believe the proposed strike action could cost at least 650 direct jobs and indirectly many more. The union needs to understand that we live in the real world. If we are not competitive and we can't get the investment, we will lose the jobs. It's that simple."

To secure the GBP750 million investment, INEOS must ensure that Grangemouth remains competitive and addressing the pensions issue is part of this process. Currently over a quarter of the entire money that INEOS spends on employees at Grangemouth goes into the pension scheme and independent experts say that this figure could rise to almost 50% going forward. This figure is excessive and unsustainable in the longer term.

The amended pension scheme proposed by INEOS is still very generous. It will remain a final salary scheme for all existing members, pay 1/60th salary for every year worked and INEOS will still pay the lion's share of the costs. The main difference will be that the current workforce will for the first time have to make a contribution to the scheme, bringing them into line with the vast majority of British workers. INEOS proposes a 6% contribution, phased in over the next 7 years. This will still leaves the workforce in a significantly better position than the vast majority of UK private company employees.

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

Tom Crotty adds, "The vote for strike action is particularly frustrating for us as the consultation process is scheduled to continue until June and talks have not been exhausted. We are asking all employees to see the pensions issue as part of a bigger picture. We need agreement on pensions to help secure a massive investment at Grangemouth and guarantee the long term future of the site. It's a package deal."

INEOS wants to invest in Grangemouth, but the conditions need to be right.

We are Fighting for the Future of Grangemouth

REBUTTALS

The Unite union have made a number of inaccurate and untrue statements. Here are the facts:

INEOS stripped GBP40m from the fund

This is entirely untrue. No money from the pension fund has been transferred to INEOS. Every penny that was in the fund when INEOS took over from BP has remained in the fund.

INEOS has reduced its contributions

The pension plan is fully funded and INEOS is committed to guaranteeing staff a full pension. INEOS will continue to make whatever contributions are necessary to ensure the scheme remains fully funded in the future.

These changes have been made during consultation

There have been no changes to the pension scheme. INEOS has tabled proposals for discussion, but none have been implemented. We will publish our revised proposals once the consultation process is concluded, and aim to start implementing changes six months after that.

INEOS are introducing a two tier pension and rushing it in six months earlier than they said they would

INEOS are proposing to maintain a final salary scheme for existing staff - so these staff will continue to enjoy one of the most generous pensions in the UK. We have proposed that, for the first time, staff and company should both contribute to the pension - we have proposed a 6% staff contribution, to be phased in over several years.

For new joiners we are planning to offer a new pension. This remains a very competitive pension, with staff and company both making contributions. INEOS will fund the lions share of this new pension. We have always been clear that we plan to introduce this new pension for new joiners on June 1st.

The Union have said that they are only looking to retain the status quo on pensions.

This is not correct. They have not only refused to discuss any of the proposed amendments to contribute to their own pensions but have proposed significant extension to their benefits. Making the scheme even more unsustainable and moving the pension further out of line with the rest of the country.

The Unions said that they are not compromising the safety of the site and INEOS is scare-mongering.

Safety remains our highest priority. We have tried to discuss safety with the Unions for the last two weeks and they have refused to address this issue with us until yesterday when they told us that they were refusing to provide safety cover during their action. Unite also issued its press release highlighting this action less than 24 hours ahead of a meeting that was arranged with their National Officers to discuss this issue. INEOS is relieved that Unite has now agreed to make safety the top priority and work with INEOS to ensure safety during the dispute.

NOTES TO EDITORS

1) INEOS is currently developing plans to invest GBP750 million 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 Europe; d) Improving the performance of the Benzene plant and gas 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%(1) 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 nd 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 bet 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.

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

Press contacts: Mark Killick, Media Zoo - +44(0)20-7978-7667 / +44(0)7836-634449; Sion Taylor, Media Zoo - +44(0)20-7978-7667 / +44(0)7768-372714; Geraldine McGrory, Media Zoo - +44(0)20-7609-2081 / +44(0)7870-657531; Richard Longden, INEOS - +44(0)7710-371-998 / richard.longden@INEOScapital.com ; David East, INEOS Innove - +44(0)1324-476948 / david.east@innovene.com .