Desolate, too small, not green enough. The real reasons Rotterdam businesses are quitting

There is almost no news story about the problems in the Dutch basic industry in which the following company names do not come up: Tronox, Indorama, LyondellBasell and Gunvor. All closed a major plant in the Port of Rotterdam last year. The panic about this is great. But is it justified? Hollands Welvaren dived into the annual figures of the companies.

For years, Dutch industry has been warning that the Netherlands is throwing its own business climate to the wind. Too high climate targets, too high costs, too many rules. Politicians in The Hague didn't really listen. But now the tide has turned, because the world seems to be becoming the more dangerous. So the more we can produce ourselves behind the dikes, the safer we feel. When four factories close in a short time, fear quickly strikes. We must do something, and fast!

Indeed, there is plenty of reason to improve the business climate for industry. But the question is whether the panic over these factory closures is justified. The Hague can hardly pour a protective wax over industry and keep everything exactly as it was. Industry needs to become more sustainable, there is overcapacity in many sectors and more and more countries want to be self-sufficient. By definition, that means that panels are going to shift in the industry and not everyone can keep up. And exactly that seems to be going on in the port of Rotterdam.

The stories of the four companies are of course different. But if you look at the annual reports - which, as far as I could tell, no other medium has done - the same feeling always creeps up on you: it is not surprising that precisely this plant is being shut down. Below is a summary for each company. For this I base myself on one or more annual reports per factory, and on more general information, to indicate whether or not the Netherlands is surrendering itself to unsavory regimes because of this closure.

Indorama, on the (PET) bottle

The Thai family-owned company Indorama has grown through years of acquisitions into one of the world's largest plastics companies, with 117 plants in 31 countries. Growth was important, making a profit somewhat less so. But after two years of losses, action really had to be taken. In April of last year, the decision was made to close the Dutch plant, which among other things makes the ingredients for PET bottles. It was thus the first of the recent major plant closures in the port of Rotterdam. But Indorama also closed factories in Portugal, Australia and Canada last year. Remarkable, because the latter two in particular are major resource and fossil-fuel countries where you can't blame relatively high energy prices.

With only 225 employees, the Dutch factory managed to make a staggering turnover of 822 million euros in 2022, of which a nice 42 million remained as profit. Why close such a factory? Although the plant has not yet filed an annual report for 2023, that of 2022 already offers a glimpse (as it was not filed until Oct. 13, 2023).

By 2022, Indoroma had already had to make a fifth deal with the bank for not being financially sound enough in Europe. But in early 2023, things went wrong again and Indorama failed to meet its bank covenants in Europe. Demand for PET in Europe was so low that one of its two production lines in Rotterdam was shut down in early 2023. In May, the parent company paid an additional €30 million to keep Rotterdam running. But the Rotterdam plant was expected to turn cash negative that year: so money would have to be added, while they were already asking the utmost from the bank.

Indorama suffers, among other things, from high energy prices in Europe, it said in its annual report. Competition from Asia is also fierce. Recognizing that China unfairly favors its own PET producers, the European Commission imposed import tariffs on PET plastic on April 3, 2024. So two days later, Indoroma in Rotterdam still throws in the towel. At least until a few years ago, by the way, Europe was a net exporter of plastic, says the European Plastics Manufacturers Association. So it is not the case that there is no longer a plastic industry at all in Europe.

Tronox, crucial dyeing ingredient

Titanium dioxide. It's one of those substances you didn't know you were missing until it wasn't there anymore. It is a pigment found in almost all paint that gives it a white color. And until March 6, it was made in the Port of Rotterdam, by Tronox. It's one of those small, unknown, but crucial dominoes in an industry chain that you don't want falling over.

But the fact is also that you can only keep making titanium dioxide if you also make a structural profit from it. In 2023, Tronox in the Netherlands made a loss of 28 million euros on 187 million euros in sales. It also made a loss in the first half of 2024, according to the 2023 annual report (which was filed only a few days before Christmas 2024). All of 2024 also most likely turned to a loss, the company itself predicted. The British parent company so doubted the future profitability of its Dutch subsidiary that it wrote off$32 million.

Like Indorama, Tronox also suffered from unfair competition from China. That's why the European Union imposed import tariffs here too early this year (yes, before Trump started his tariff war...). So is the closing of the Rotterdam plant yet another violation of our strategic autonomy?

That remains to be seen.