Sale of 'chemical fire' factory is to go ahead

Negotiations are still on-going over the sale of a Morecambe chemical factory – despite a massive blaze at the premises.

Swiss company Clariant announced the sale of its Lancaster Synthesis Ltd unit to Johnson Matthey Plc for approximately 32 million Swiss Francs, or just over 13.7m, in mid July.

But last Tuesday, more than 60 firefighters tackled a blaze at the premises on the White Lund Industrial Estate,, when a one-mile exclusion zone was created amid fears that a toxic cloud could engulf the area.

A spokesman for Clariant today revealed talks were still in progress, although the deal may have to be renegotiated due to the fire.

The spokesman said: "The two companies are still in negotiations following the fire recently.

"At at the moment they are having to renegotiate the deal as part of the deal included a warehouse and that isn't there any more. It's still in negotiations."

The cause of the fire at the single story unit is still not known as the affected warehouse is not yet safe for investigators to enter.

The transaction, first announced in July, is part of Clariant's strategy to sell businesses which are no longer core activities.

The company initiated a Transformation Program last year, including the sale of several non-core businesses, wide-ranging performance improvements and job reductions.

Lancaster, which is part of the Life Science and Electronic Chemicals division, sells a wide range of organic chemicals mainly to industrial and academic research institutions.

It has catalogue sales and small-scale bulk manufacturing operations in Morecambe, and additional distribution facilities in the United States, Germany, France and India.

The business had sales of 19m in 2003 and employs 225 people worldwide.

Clariant says Lancaster Synthesis's operations are a good fit with those of Johnson Matthey's existing Research Chemicals business and its acquisition provides opportunities to improve market share and increase operating facilities.

When the sale was announced last month, Clariant chief executive officer Roland Losser, said: "We have come to an agreement with Johnson Matthey in a mutually beneficial way.

"They are an excellent company and I am sure that Lancaster's employees and customers will be in good hands."

The transaction was pending approval by the relevant competition authorities.