The business community has little hope of seeing a buyer take over the factory left vacant by Indorama, it has noted. The PressThe parties’ efforts are mainly aimed at securing international supplies to keep alive a major part of the petrochemical industry in Quebec.
It would be “extremely surprising” for a global petrochemical player to move into the buildings left vacant by the Indorama company, say Alpek Polyester Canada and the East Montreal Chamber of Commerce.
Alpek is the last link in the four plants – with Suncor, ParaChem and Indorama – forming the polyester chain, unique in Canada. The closure of the Indorama plant, at the centre of the chain, caused shockwaves in Montreal East when it was announced on August 6.
The disappearance of a link weakens the economic sustainability of the chain and its jobs.
For “a certain time,” Indorama will continue to supply Alpek with PTA (purified terephthalic acid) from imports from its other plants, explains Frédérick Comeau, Alpek’s general manager.
“Now it will be up to Alpek to find a more competitive supply that comes from elsewhere,” summarizes the president and CEO of the Eastern Montreal Industrial Association, Dimitri Tsingakis. Indorama is based in Bangkok, Thailand.
Alpek confirmed that it is currently evaluating which supplier it will continue with in order to secure its medium and long-term future. However, Mr. Comeau did not reveal the time frame in which a new partnership could be initiated.
Alpek, like the entire polyester chain, faces a major challenge: its competitiveness in the face of low-cost production countries such as China. While customs surcharges have been imposed on products such as Chinese electric vehicles, they are non-existent on petrochemical products.
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The geographic proximity of the chain’s companies increased their efficiency and reduced their environmental impact, explained the president and CEO of the Eastern Montreal Industrial Association. “Now, we are becoming dependent on an external source. And so, it weakens the ability of Quebec and Canada to be self-sufficient in terms of supply,” said Dimitri Tsingakis.
The future of industry
While the closure of the Indorama plant has led to the loss of 140 jobs within his company and 37 jobs at ParaChem, which precedes it in the chain, Alpek, downstream, does not foresee any such consequences for the moment. The general manager admits, however, that the instability of the petrochemical market makes things difficult to predict.
According to the Eastern Montreal Industrial Association, there is no indication that the viability of the remaining factories in the chain is threatened, even if they will have to adapt.
“The petrochemical industry is working and looking for solutions [pour la transition énergétique] “, said provincial minister Chantal Rouleau and local MP. She believes that the industry should not worry in the short term.
The total number of positions eliminated at Indorama and ParaChem represents nearly 12% of jobs in the petrochemical industry in Quebec, according to the most recent data from the website of the Ministry of Economy, Innovation and Energy, which dates back to 2022. Of the 1,500 jobs across the province, more than half are occupied by the Montreal East polyester chain, including all staff at the Suncor refinery.
ParaChem plant operations remain on hold for an indefinite period.
What fate for the Indorama installations?
If local production of PTA by a newcomer seems excluded for the moment, what will be done with the Indorama installations?
“It is still necessary to understand that the installations [de l’usine Indorama] remain. I think that in terms of the circular economy, there is indeed potential. Some have talked about the textile industry,” mentions Jean-Denis Charest, president of the Chamber of Commerce of Eastern Montreal.
While waiting for a new occupant to come forward, the City of Montreal East fears the loss of municipal tax revenue that could result from the lack of occupation of the land on Sherbrooke Street East. Its mayor, Anne St-Laurent, estimates that 94% of the city’s revenue comes from its industrial zone.
Minister Chantal Rouleau cannot say “in any way what will be put in place”, but assures that there is “an enormous amount of work being done at the moment”.