17 Oct 2006

INEOS ENTERPRISES ANNOUNCES STRATEGY FOR SIGNIFICANT GROWTH OF ITS EUROPEAN BIODIESEL BUSINESS AND CONFIRMS MAJOR BIODIESEL INVESTMENT FOR GRANGEMOUTH

INEOS Enterprises has today announced a strategy to achieve significant growth of its biodiesel business across Europe. The first step of this strategy will be to achieve at least 2 million tonnes of biodiesel output by 2012, with some 1.2 million tonnes by 2010.

This strategy is in line with the pan European commitment by governments to move towards increased use of green fuels and is underpinned by major plant investments proposed by INEOS Enterprises for the UK and Continental Europe.

Comments Harry Deans, CEO INEOS Enterprises: "INEOS Enterprises is aiming to become the first truly pan European supplier of biodiesel to meet the significant growth in demand predicted for Europe. We will build world scale plants using the latest technology to produce high quality products that will be highly competitive in all market conditions."

In the UK, INEOS Enterprises can today confirm that its investment in a new biodiesel production facility at Grangemouth, Scotland will proceed, with significant support being received from the Scottish Executive in the form of a Regional Selective Assistance award. INEOS Enterprises anticipates that the facility, which will be at least 500,000tes, will be operational by 2008.

Comments Mr Deans: "We are delighted to have been able to work with the Scottish Executive and other key stakeholders to bring this very important investment to Scotland. The Grangemouth plant will be fundamental to our growth strategy and represents an investment of over €90 million in the region. The UK is fully committed to the increased use of biofuels as part of its energy mix and we believe that this investment will make an important contribution towards this."

In addition to the Grangemouth investment, the growth strategy will see additional investments proposed by INEOS Enterprises, potentially at the INEOS sites at Antwerp (Belgium), Lavera (France), and Wilhelmshaven (Germany) or Cologne (Germany).

Continues Mr Deans: "Unlike other regional producers, our strategy will see new production facilities located at the very heart of key demand centres. The existing INEOS operations within these centres would provide us with cost effective infrastructure, a ready-made and fully integrated customer base in addition to access to some of Europe's very best transport networks. Building upon this platform, our intention is to drive our capital investment with an aggressive business development strategy to capture significant market share across Europe. We are already in discussions with a number of oil majors and supermarket giants to secure this additional demand."

INEOS Enterprises has more than 10 years experience in the biodiesel sector, and already holds a strong position in the French market, which is to be further strengthened by an ongoing €70 million investment to double biodiesel output at its site at Baleycourt by 2008.

Andy Currie, Director of INEOS Capital and Chairman of INEOS Enterprises comments: "As part of the world's fastest growing chemicals company, INEOS Enterprises is extremely well placed to make these investments and has an excellent track record of pursuing market opportunities and developing world class businesses.

"INEOS is well skilled in commissioning and operating low cost, high yield commodity plants and has the size and scale that is essential for success in this business. By building on the ready made synergies with our existing European refining operations, coupled with our existing client base and market contacts, we firmly believe that we have the competitive edge and can develop into Europe's premier biodiesel company.

ENDS

For further information please contact the INEOS Enterprises Press Office:

Craig Welsh
Telephone: 01928 511528
Fax: 01928 569459
Email: craig.welsh@ineoschlor.com

1. INEOS is a leading global manufacturer of refined products and basic, intermediate and speciality chemicals. The Company is made up of multiple decentralised businesses, each with a major chemicals company heritage.
2. The INEOS production network spans 68 manufacturing facilities in Europe, North America, South America, Asia and Africa. The combined INEOS Group, which includes the recently acquired Innovene (BP) people and assets, generates more than $33bn in revenues and has more than 15,000 employees. This makes INEOS the third largest independent chemicals company in the world and the largest in the UK, as well as the country's largest private company.
3. INEOS Enterprises is a portfolio of eight leading businesses manufacturing chemical products in Northern Europe and Southeast Asia, with sales of these products to customers around the world. The Company is focused on the developing needs of customers and rapid growth through investment in new products and manufacturing facilities or by acquisition. INEOS Enterprises employs some 500 people across sites in the UK, France, Germany and Thailand and has an annual turnover in excess of €600 million.
4. The crude oil refineries at Grangemouth and Lavera are operated by INEOS Refining, which is the largest independent refiner in the EU. The Grangemouth refinery supplies ultra low sulphur diesel and petrol to the fuels markets of Scotland and northern England, whilst the Lavera refinery supplies the fuels markets of France, Switzerland and southern Germany. Investment in biodiesel at both of these sites would provide INEOS Enterprises with excellent customer/supplier synergies.
5. The INEOS site at Baleycourt is operated by INEOS Enterprises and has been producing biodiesel for more than 10 years. The site is in the heart of France's second largest vegetable oil producing region, and the new investment currently underway at the site will allow around 400,000 tonnes of locally produced rapeseed to be transformed into oil and then biodiesel for supply to the French, Belgian and German fuels markets.
6. The INEOS site at Antwerp is operated by INEOS Oxide. It has a strategic location at the heart of Europe's largest and the world's second largest petrochemical centre with close proximity to raw materials via sea, road and rail and to Europe's prime customer base via pipeline, sea, inland waterway, rail and road transportation networks. Investment in biodiesel at Antwerp would provide INEOS Enterprises with an excellent supply point for Northwest Europe, and with excellent customer/supplier synergies with the adjacent refining operations.
7. In Germany, the INEOS site at Wilhelmshaven is operated by INEOS ChlorVinyls and produces chlorine and caustic soda, along with S-PCV and VCM for use in the PVC chain. Investment in a biodiesel facility at the site would present INEOS Enterprises with excellent logistics opportunities to supply the German fuels market.
8. The INEOS site at Cologne, Germany employs around 1,800 people in the manufacture of petrochemical products such as ethylene, ethylene oxide, ethylene glycol, polyethylene, propylene, propylene oxide, propylene glycols, acrylonitrile, butadiene, C4 oligomers, isoamylene, benzene, toluene, ammonia and nitric acid.
9. Biofuels are sources of energy that are manufactured from renewable resources, for example rapeseed. Specifically, biodiesel is an alternative fuel produced from renewable sources such as vegetable oils that can be blended with diesel and used to power conventional diesel engines without modification. It can also be used as a replacement fuel for oil in industrial processes.