A CASH crisis is looming for ICI which could find itself up to £600 million worse off by the end of the next decade as a result of changes which could threaten the long-term future of the Runcorn site.

A complete revamp of chlorine production technology by 2010, costing an estimated £400 million, is needed and might discourage potential buyers.

And Government plans to impose a new energy use tax from 2001 could cost the company a further £20 million a year and leave it unable to compete in the world market.

At a meeting held last week to announce ICI's "Double in a Decade" plans to invigorate production, UK manufacturing manager Russ Whelan said that the phasing out of mercury cells - agreed internationally in 1990 - in chlorine production will cost hundreds of millions of pounds - and admitted that the parent company is not going to foot the bill.

Chlorine production, the staple of ICI Runcorn's operation, currently uses mercury in the electrolytic cells where brine is electrolytically broken down into chlorine and caustic soda.

But an enforced switch to membrane cells, seen as less environmentally damaging, means that ICI will have to totally replace its hardware.

Mr Whelan estimated that the changeover would cost "several hundred million pounds".

Asked whether anyone would want to buy a plant knowing that such massive capital expenditure is needed, he said: "I don't know. It will be part of negotiations. ICI aren't going to want to pay."

Managing director Adrian Bromley, speaking at a launch of ICI's Double in a Decade strategy, believes the energy levy will be "catastrophic" for ICI because chlorine production is electricity intensive.

Managing section manager Doug Angell said ICI had been "ripped off" by the privatised electricity industry, which charges anything between £16 and £124 per kilowatt hour to a firm in which 60 per cent of the cost is electricity.

American chlorine manufacturers already pay about 30 per cent less for their power than ICI does.

Mr Bromley estimates that current proposals, which are still the subject of consultation between Government and industry, could cost ICI up to £20 million per year.

But he hopes that ICI will get a break: "There is a precedent set by the Monti Directive which is a proposal for a European directive and that has exempted electrolysis."

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