Council questions £100m UK grant for Belgian factory after Welsh site scrapped
Elgan Hearn, Local Democracy Reporter
Why was £100 million given by the UK Government to finance building a glass-making factory in Belgium, and did this contribute to the decision to pull the plug on factory plans in south Wales, a council has asked.
At a meeting of Blaenau Gwent County Borough Council’s Economic Development and Environmental Management scrutiny committee on Tuesday, November 11, questions around the £100 million UK Government grant were brought up as councillors discussed the county’s “Blueprint for Growth”.
Ciner Glass were given planning permission by councillors to build the factory, that was hoped would create 650 jobs, at a site on the Rassau Industrial Estate, Ebbw Vale back in June 2022.
Cllr Gareth Alban Davies (Opposition Independent – Rassau and Garnlydan) asked: “What has this council done to find out about the £100 million loan that has been made by Westminster to Ciner to help them build their factory in Belgium?
“Did that influence their decision not to build one in Rassau?
“I think it’s a disgusting decision to make. 600 jobs coming into this area would have been fantastic.”
“The people of Blaenau Gwent and us as councillors deserve to know what exactly has gone on with that.”
Acting joint Director of Economy for both Blaenau Gwent and Torfaen, Christina Harrhy said: “Obviously there are commercial sensitivities around that transaction that I need to respect, in any such investment opportunity there are several parties that come around the table to make it happen.”
These would be Ciner, Blaenau Gwent council and both Welsh and UK Governments.
Ms Harrhy said: “Every partner that was around that table did everything they possibly could to make that happen and bring those jobs into the county borough.
“We are part of a global network and these companies operate in a global environment.
“Ultimately what happened is that the business proposition did not stack up financially and economically any longer, that’s why it failed.”
Reality
She added that this is “not unusual” and for every 10 conversations that council, and government officials have with businesses, nine: “don’t go anywhere.”
Ms Harrhy continued: “That’s the reality of operating in business.”
She assured councillors that this was only one conversation and that “many others” are going on to bring business into Blaenau Gwent.
Cllr Davies understood commerical confidentiality and stressed that details of the grant had already been made public – but had not been picked up on in Wales.
He said: “We’ve had so many false dawns about things that were coming, the people of Blaenau Gwent have been let down too many times.”
Last month the grant of £100.5 million by the UK Export Finance department, the UK Government’s export credit agency, to Ciner was revealed.
Progress
Documents on the UK Export Finance website explain that the key aim of the project they are investing in is to: “Produce container glass (bottles) for the Belgian, Dutch and German markets, as well as for possible neighbouring countries.”
Tecoglas Limited in Sheffield are listed in the documents as a UK exporter involved in this project, a firm which provides furnaces used in the production of glass.
In July, Ciner announced their decision to shelve their plans to build the factory at the Rassau Industrial Estate.
In February 2024, planning officers approved amendments to the planning permission for the factory which would have made it smaller than the original scheme.
During the last couple of years concerns were raised regularly by councillors over the lack of progress being seen with the scheme.
In August, Ciner announced the signing of a €504 million (Euro) financing agreement to support the development of its state-of-the-art container glass production facility in Lommel, Belgium.
UK Export Finance were included in the list of organisations that had contributed to the finance package.
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What a shambles – giving a £100 million loan/grant to a foreign company to build their factory in a FOREIGN country instead of the UK/Wales – what a farce.
This is not what has happened. Not in the slightest.
So Alwyn why keep secret what actually
did happen?
It’s actually quite amusing seeing some of the most ridiculous takes I’ve seen.
So many people are so easily misled!
Westminster isn’t working.
Groan… The councillors do not understand export financing. This is not money – it’s a guarantee, and clearly for British companies only
Ciner is Turkish.
I advise you to read about export guarantees and who they are given to.
Article states “Last month the grant of £100.5 million by the UK Export Finance department, the UK Government’s export credit agency, to Ciner was revealed”
Note “grant” meaning free cash and “to Ciner” meaning a Turkish company.
This facility would have supplied Germany?
NHS / all councils / schools etc have buildings; what proportion of the materials are manufactured in Wales? Could items not manufactured in Wales be manufactured in Blaenau Gwent for the whole of the Welsh economy and a ten year framework awarded?
Tfw has Spains CAF manufacturing trains for Wales and England in Newport. Blaenau Gwent should focus on products that will be utilised in Wales.
Exports boost GDP, aka growth.
Maybe CiNER were put off by the uncompetitive cost of electricity in Wales/UK.
And gas. Still, at least the US is laughing all the way to the bank with their exorbitant LNG export price.
Gas is a global market, it’s exorbitant for everyone including our own.
Not ‘everyone’ – gas (as in natural gas) is much cheaper in the USA. And numerous power stations have been built in/proximate to US fracking regions resulting in cheap electricity. It is one reason why electricity hungry AI data centers/centres are coming to the USA.
The global price is global but you do have to transport the gas on top of that so it may be cheaper in somewhere the size of the US to have a customer next door who’ll take it for less but with minimal transport costs. But the UK has gas interconnects to Europe who will pay top dollar for whatever we produce so there’s no reason to discount for the local market.
Some of the US AI data centers/centres are allowed to have their own electrical power generation/generators and are located well over a thousand miles away from fracking regions. In fact, some of the data centers/centres are located, or being built, in Texas are allowed to generate their own electricity; and Texas has major ports that export oil. One of the BIG reasons y oil/gas is cheaper in the US is because the US does not tax the hell out of these products (compared to the taxes piled on by the UK government on oil/petrol).
Why would a company want to set up somewhere backwards enough to be out of the EU? The electricity costs alone are significantly higher for industry in Wales.
Strictly speaking it’s not being in the single market and customs union that’s the economic problem, and voters weren’t asked about that. Boris just decided.
I’m quite certain this factory proposal was commented on here on NC some months ago. For some reason people hated the very idea. Well, wish granted. That factory and the 600+ jobs are going somewhere else.
Same with wylfa. If it hasn’t gone ahead, lots of commentators would say ‘uk gvmt never invests in wales,’ and now it has ‘it won’t creat jobs for locals’ .
it’s not a loan, it’s a PAYMENT-GUARANTEE (in case of non-payment by the foreign customer) on an (excellent) 100 miilion pound export contract. ECGD guarantees hundreds of export contracts every year. It’s not for the foreign companies, it enables British companies to export without the possibility of going bankrupt even on e.g. the last 5% which will only be paid when e.g. the plant has worked 90% of the time for 6 months. So this is a guarantee to support a BRITISH company, most likely for 5 or 10 million pounds which could put even a large company in danger… Read more »
This should be irrelevant to Ciner then if it’s only protecting a UK company supplying Ciner in Belgium. Ciner probably wouldn’t even know about it, so why does the article state that “UK Export Finance were included in the list of organisations that had contributed to the [Belgium plant’s] finance package”.
UK planning departments vs investors = investors look elsewhere. Same old sad story.
One day Wales will wake up to Labour , goodness knows when , there are myriads of examples of Welsh vote taken for granted.
Of course Starmer is interested in currying favour in Europe as well as he rapidly concedes weak deals .
Wales needs an economy of substance it won’t get one unless it becomes more commercialised in its approach .
We need to understand exactly what happened before playing the blame game.