The business community has little hope of finding a buyer for the factory left vacant by Indorama, according to reports. The efforts of the parties involved will primarily focus on securing international supplies to maintain a significant portion of Quebec’s petrochemical industry.
Published at 1:01 a.m. Updated at 5:00 a.m.
It would be “extremely surprising” for a global petrochemical company to occupy the buildings left empty by Indorama, say representatives from Alpek Polyester Canada and the East Montreal Chamber of Commerce.
Alpek is the last link in the four-plant network—comprising Suncor, ParaChem, and Indorama—that forms the unique polyester chain in Canada. The closure of the central Indorama plant sent shockwaves through Montreal East when it was announced on August 6.
The loss of a link in the chain undermines the economic viability of both the chain itself and the jobs it supports.
For “a certain time,” Indorama will continue supplying Alpek with PTA (purified terephthalic acid) through imports from its other facilities, explains Frédérick Comeau, Alpek’s general manager.
“Now it will be up to Alpek to find a more competitive supplier from elsewhere,” summarizes Dimitri Tsingakis, president and CEO of the Eastern Montreal Industrial Association. Indorama is based in Bangkok, Thailand.
Alpek confirmed that it is currently assessing which suppliers it will partner with to secure its medium and long-term future. However, Mr. Comeau did not disclose the timeline for establishing a new partnership.
Alpek, along with the entire polyester chain, faces a significant challenge: maintaining competitiveness against low-cost production countries like China. While tariffs have been imposed on products such as Chinese electric vehicles, there are currently none on petrochemical products.
The geographic proximity of the companies in the chain has enhanced their efficiency and reduced their environmental impact, according to the president and CEO of the Eastern Montreal Industrial Association. “Now, we are becoming dependent on an external source. This weakens Quebec and Canada’s ability to be self-sufficient in supply,” stated Dimitri Tsingakis.
The Future of the Industry
Although the Indorama plant’s closure has resulted in the loss of 140 jobs at Indorama and 37 at ParaChem—which is upstream in the chain—Alpek does not foresee any immediate consequences for itself. However, the general manager acknowledges that the instability of the petrochemical market complicates predictions.
According to the Eastern Montreal Industrial Association, there is no indication that the viability of the remaining factories in the chain is at risk, although they will need to adapt.
“The petrochemical industry is active and seeking solutions for the energy transition,” said provincial minister Chantal Rouleau and local MP. She believes the industry should not be overly concerned in the short term.
The total number of positions lost at Indorama and ParaChem represents nearly 12% of jobs in Quebec’s petrochemical sector, based on the latest data from the Ministry of Economy, Innovation, and Energy, which dates back to 2022. Out of 1,500 jobs across the province, more than half are part of the Montreal East polyester chain, including all positions at the Suncor refinery.
ParaChem’s operations remain suspended indefinitely.
What Will Happen to the Indorama Facilities?
While local production of PTA by a newcomer seems unlikely for now, questions remain about the future uses of the Indorama facilities.
“It is important to recognize that the Indorama facilities still exist. I believe there is potential from a circular economy perspective. Some have mentioned the textile industry,” noted Jean-Denis Charest, president of the Chamber of Commerce of Eastern Montreal.
As they await a new occupant, the City of Montreal East is concerned about the potential loss of municipal tax revenue resulting from the vacant land on Sherbrooke Street East. Mayor Anne St-Laurent estimates that 94% of the city’s revenue comes from its industrial zone.
Minister Chantal Rouleau cannot specify “what will be implemented,” but she assures that “a tremendous amount of work is currently underway.”
Impact of Indorama’s Factory Closure on Quebec’s Petrochemical Industry
The closing of the Indorama factory in Montreal East, announced on August 6, has left a void in the local business community, casting uncertainty on the future of the area’s vital polyester supply chain. Indorama’s departure raises concerns about job losses and supply chain vulnerabilities within Quebec’s petrochemical industry.
The Polyester Supply Chain at Risk
Indorama’s facility was a pivotal element in the polyester production network in Quebec, linking operations between Suncor, ParaChem, and Alpek Polyester Canada. Alpek currently stands as the final link in this productive chain.
- Suncor: Supplies energy and raw materials.
- ParaChem: Provides essential precursor chemicals.
- Alpek Polyester Canada: Manufactures finished polyester products.
Challenges Faced by Alpek Polyester
In light of Indorama’s closure, Alpek must turn to imports to secure supplies of purified terephthalic acid (PTA), essential for polyester production. The general manager, Frédérick Comeau, stated that Indorama will continue to supply PTA from its overseas plants for now, but a long-term strategy to identify more competitive suppliers is crucial.
Import Dependency and Economic Impact
The reliance on imported raw materials raises questions about the economic sustainability of Quebec’s petrochimical landscape. Dimitri Tsingakis, president and CEO of the Eastern Montreal Industrial Association, emphasized that regional players will struggle against low-cost producers in countries like China. Unlike the automotive sector, the petrochemical industry does not face similar customs surcharges, promoting a challenging competition environment.
Job Losses and Future Employment in the Industry
With Indorama’s closure, approximately 140 jobs were lost, adding to the 37 jobs eliminated at ParaChem. This equates to a significant percentage of employment within Quebec’s petrochemical sector.
Job Statistics Overview
| Company | Job Losses |
|---|---|
| Indorama | 140 |
| ParaChem | 37 |
Despite these losses, Alpek does not foresee immediate job impact; however, the instability in the petrochemical market poses a risk for future employment. The overarching sentiment reflects a mixed outlook for the viability of the remaining facilities in the area.
Local and Provincial Responses
Provincial minister Chantal Rouleau and local MP reassured that efforts are underway to ensure the industry remains adaptive and innovative. They highlight that while the challenges are significant, the focus remains on securing a stable future through potential energy transitions and technological advancements.
Potential for New Industry Occupants
The big question remains: what will become of the Indorama facilities? Experts like Jean-Denis Charest, president of the Eastern Montreal Chamber of Commerce, speculate that the installations may hold potential for other sectors, such as textiles, reinforcing the principle of the circular economy.
Future Possibilities for the Indorama Site
- Textile Industry: Potential repurposing into textile production.
- Recycling Initiatives: Opportunities for establishing recycling facilities that align with sustainable practices.
- Industrial Innovation: Attracting new, innovative companies to enhance local job creation.
The Financial Implications for Montreal East
The city of Montreal East faces financial strain due to theplant’s closure. Mayor Anne St-Laurent indicated concern over potential losses in municipal tax revenue, which heavily relies on the industrial zone for economic stability.
Tax Revenue Breakdown
| Source of Revenue | Percentage of Total Revenue |
|---|---|
| Industrial Zone | 94% |
| Residential Revenue | 6% |
Conclusion: Looking Ahead
While there is little hope for immediate buyers to take over Indorama’s facilities, the challenge now lies in how Quebec’s petrochemical sector will adapt and restructure to mitigate the impacts of this loss. Key stakeholders are encouraged to collaborate and innovate to safeguard the industry’s future and regional economic viability.