Audition du PDG de Vencorex, Jean-Luc Béal, à l'Assemblée nationale - 28/04/2025

Mr. Chairman, Mr. Rapporteur, ladies and gentlemen deputies, I first want to thank you for your invitation, giving me the opportunity to speak about the company Vancorex in the context of this investigative committee on the obstacles to reindustrialization in France. I will try to be quite brief, but I will begin with a presentation of the company Vancorex, followed by the main reasons leading to the deterioration of the company's activity and then its judicial reorganization. First, a few words about Vancorex. Vancorex is a mid-sized chemical company whose industrial base is located on the Pont-de-Claix chemical platform in Isère. Its production is fully integrated, from salt manufacturing to chlorine, soda, isocyanate monomers—specifically aliphatic isocyanates—and their derivatives. These derivatives represent the core of Vancorex's business and are used in the formulation and production of coatings mainly for the construction and automotive industries. Vancorex Group is also present in Asia and the Americas for the manufacture and sale of derivatives produced from the monomer HDI, mainly manufactured at the Pont-de-Claix site. The group generated revenue of around €300 million in 2023 and employs nearly 600 people worldwide, including 470 in France. Vancorex France represents 85% of Vancorex Group's global revenue. The French sites making up Vancorex France are located on the Pont-de-Claix site, the main site as I said in Isère; the administrative site in Saint-Priest in Rhône; and the site in Saint-Fons for its research center, still in Rhône. It is supplied by the Hauterives mine, a brine mine in Drôme owned by Chloralp, a sister company of Vancorex France. Now, let me come to the reasons for the deterioration of the company's situation. In a few words: for several years, Vancorex in France has had barely balanced operating results, which deteriorated sharply at the beginning of 2023 with significant losses and a very strong need for financing. This negative and abrupt change stems from major developments in the aliphatic isocyanate market, combined with a decline in competitiveness due to several factors: two main factors. First, the market factor: the global specialty isocyanate market has been profoundly transformed, becoming extremely competitive with a decrease in customer demand for this type of product starting at the end of 2022 and the start-up of what I would call overcapacity—the commissioning of new plants in Asia. These capacities, mainly in China, were launched during the post-COVID period of high demand, and unfortunately their start-up coincided with the decline in demand on end markets. This created a situation of fierce competition where major global players, both European and Asian, engaged in a severe battle for market share, resulting in extremely strong price pressure, reaching levels Vancorex could no longer follow. This inability to economically match our competitors' prices clearly highlighted the competitiveness gaps of Vancorex's industrial facilities compared to global players, especially Chinese players with newer, more productive capacities, more competitive access to energy and raw materials, combined with an aging and oversized Pont-de-Claix platform in terms of size and cost. These gaps are of three types. First, the cost structure of the Pont-de-Claix platform: as I mentioned, Vancorex represents 80% of the platform's costs or cost absorption, and this platform was unable to adapt to the decline in Vancorex's regular production, which over 10 years dropped by about 30%, over 30%. Second, the cost of access to energy: many actors who have appeared before your committee have mentioned this, especially in chemistry, where we consume a lot of electricity and natural gas. In recent years, we have faced extremely non-competitive costs compared to what is seen in the Americas or Asia, with gas costs in Europe four to five times higher than in the Americas, and electricity one to two times higher than in Europe. Third, the productivity deficit of Vancorex's units, which is partly due to a need for financing for upgrading investments and regulatory maintenance, which are extremely high in France, especially on a platform as complex as Pont-de-Claix, with the highest CVISO regulatory thresholds. For information, 60% of investments made over the last 10 years were for upgrading and maintaining regulatory approvals for the site and Vancorex sites. I won't mention future regulations; beyond past regulations, about €50 million in investments were planned to meet new seismic regulations and new regulations on pipelines transporting brine. A brief note about our efforts: we worked hard upstream starting at the end of 2022 to find solutions, as we saw announcements of capacity creation in Asia a few months before their realization and commissioning. From 2022, Vancorex implemented cost reduction plans that proved insufficient, one after another, leading to the creation and definition of a turnaround plan in September 2023, where Vancorex worked with an external partner, Extens, to define a plan representing €80 million in savings, over 30% of its revenue, which is extremely significant. This plan did not succeed. From the start, we worked with state services to find solutions for assistance, either through decarbonization investments to improve productivity and reduce exposure to natural gas. We also worked extensively with the DIRE, the interministerial directorate for business restructuring, to find solutions, particularly with other industrial partners, especially French ones, to try to unlock the cost structure of the platform, which was, as I described, obsolete and far too costly for Vancorex's residual activity. Second, the search for a buyer: the turnaround project could not succeed, so it was decided with our shareholder not to continue financing a plan without a return to equilibrium. From that point, we filed a case with the administrative and economic court of Lyon and placed Vancorex France in judicial reorganization, with the primary objective of finding buyers. The most important thing for us and our shareholder was to give a chance and find buyers that we could not find by leaving the company in better times with all its extremely heavy, long, and costly contractual commitments. This search for a buyer started on September 10, and throughout the process, we worked enormously, again with the DIRE, to meet industrial and non-industrial actors who expressed interest in all or part of Vancorex France's activities. The last point is the preservation of the Pont-de-Claix platform: we hear many things about the platform no longer existing. Our objective, after learning of the only buyout project, which was quite disappointing, small, and disappointing, was to keep the platform alive to avoid bringing down all other actors and ultimately lose a future potential for revitalization of this platform. We worked hard to bring all actors together and make them reach a common functioning that allowed Borseochem to confirm its offer on April 10. I will stop there as an opening statement and give the floor back to you, Mr. Chairman.

So, the salt—what we call brine, the product containing 30% salt, comes from a mine located in Hauterives in Drôme, owned by a company called Chloralp. Salt is not part of the Vancorex France perimeter that was taken over; Chloralp is the owner of the salt mine and what is called the 'saumoduc,' the pipeline that brings the brine to Pont-de-Claix. So in no case does the buyer of Vancorex France's assets take over the mine. It effectively takes over all intangible assets, know-how, but does not take over the salt production assets on the Pont-de-Claix site because the Pont-de-Claix site handled the purification and crystallization of salt. Those assets are free to be sold by the liquidator once the company is liquidated.

Mr. Chairman, I confirm it because we are a salt seller, selling salt inherent to the Hauterives mine. This salt was either used by Vancorex in its electrolyzers to make chlorine or sold externally to Arkema for use in its electrolyzers, some of which serve to produce products for defense activities.

We have no direct relationship with the users of strategic defense products—the Ministry of Defense. We have relationships with our client, Arkema. As such, we sold significant quantities of salt before the unit stopped in October and during the resumption of production for a few weeks. Whether they have built up significant stocks, we are not in a position to answer that since we do not know the need in detail. Furthermore, what I can tell you today is that we still have significant unsold salt stocks on site that could be sold if necessary to Arkema or other actors in the value chain.

Yes, we followed an extremely structured framework, framed by the judicial procedure bodies. Like any judicial procedure, when the court decides to enter judicial reorganization, it appoints judicial administrators who act as representatives of the company. Therefore, we strictly followed the processes and procedures of a classic judicial reorganization. These steps were of several orders. Just before the procedure—before filing the cessation of payments document in early September—we started talking to a few actors because we began to understand the likely outcome, and we tried to find a solution beforehand, outside of judicial reorganization. We did not succeed. These same actors were re-consulted at the start of the procedure because the first phase is the search for a buyer. So we entered the procedure with work already done during the summer to identify potential buyers, about 50 companies or investment funds. These 50 companies were consulted. About fifteen showed interest and entered what is called a data room to better understand the company. About eight companies visited the site for more in-depth discussions with us and with state services, as state services intervened with these companies that had shown significant interest. At the end of the deadline—which was, if I remember, October 21—we received only one offer. I won't hide that we were surprised, but we only had one offer, from Borseochem. So the data was always available in this data room to all the actors who approached us or the judicial administrators. I take this opportunity to say that it was also the case for the employee project, which arrived late, but we immediately opened access to the data room and answered their questions as best we could. All actors who presented themselves during the reorganization procedure had access to the same level of information and were treated in the same way, having access to management to answer their questions and to visit the site if they wished.

What I can confirm is that Borseochem obtained from state services this foreign investment authorization in France, which was presented to the commercial court before the decision following the hearing of April 10 came into effect.

In terms of recruitment, Borseochem's project was to take on 54 employees. 54 employees, of which 30 could be automatically transferred under French labor law, and 24 had to be voluntary. Of these 24, there was a call for volunteers from a group of about 110 people, and only 14 people volunteered. So as of now, 44 people will go to Borseochem: 30 because they were automatically transferred, position for position, and 14 because they volunteered for transfer to positions similar to their previous ones. So 44 people have already been reassigned, having already started their activities with Borseochem, which has committed—at least initially, in accordance with the law—to maintaining the existing agreements at Vancorex France. I can also tell you that they announced last week that they are giving a welcome bonus to employees joining them. As for the other employees, they left in several stages: a first wave left at the end of April, about a week ago, and a second wave will leave for the remaining employees. These employees leave under what is essentially equivalent treatment to a social plan as exists in French chemistry, meaning what could be called a correct plan in terms of financial treatment, proposals for relocation assistance—whether geographic mobility, training, or entrepreneurship—there is assistance on all these criteria. Then afterwards, since we are in reorganization, there is no identical job search cell like in a solvent situation, but nevertheless, all employees are eligible for CSP support and will have the opportunity to be supported by it for a year, overall financially supported at a rather good level.

Given the interest in doing so. Vancorex is the small player in isocyanates, so you must not be mistaken, we are not the world leader. So from there, we had very few elements to push a file that would have led us to protect Vancorex's activities. Knowing that we recognized, after conducting fairly in-depth analyses at the end of 2022, that Vancorex's cost structure is a major handicap, very disconnected from other producers, including European producers, since there is another European. So we are well aware, we talk a lot about China, but we are not in a case of proven dumping, and I will say it differently: we are in the difficulty of evolving a historical platform where everything is intertwined when the market evolves, when the need evolves, and when we must also evolve these cost structures and price structures. So the first problem is certainly there more than in protection, because protecting something that is not economical is like financing a permanently loss-making activity. It's a bit of a rear-guard battle, at least from my point of view.

So, electricity plus natural gas for Vancorex in terms of cost, we'll say direct cost or cost on the platform, it's 40% of our variable costs. 40%. So it's extremely significant, and roughly equally between electricity and natural gas. The cost structure was of course impacted because natural gas experienced extremely strong increases. So before 2022, in 2023, we are rather behind the peak, but nevertheless, the current price of natural gas has never returned to the pre-crisis price, and today it is twice as high as it was before, and as I said earlier, it is four to five times higher than in the United States, and one to two times higher than in Asia. So it's less true for Asia. For electricity, I can give you a figure. The cost of electricity for Vancorex in 2023, using all available schemes, whether it be the Excelum consortium, ARENH, or TURPE, was 67 euros per MWh. And we repeat this because it is a commonly recognized figure: above 50, we are in a competitive disadvantage. So these utilities represent 40% of our costs.

Again, more than a precise figure, the direction is indeed to return to levels, and this is true for all of Europe, because we are talking about France, but it's true for all of Europe, that Europe returns to more competitive energy costs. And effectively, we are certainly in a country where access, subject to the necessary investments to create this access, is certainly one of the cheapest possible electricity sources. For gas, it's another matter. Don't forget we are in chemistry. Gas, natural gas, is very important. And for that, there are perhaps far fewer levers. But on electricity, logically, it seems to us that we could be much more productive and perhaps not go in the direction that is presenting itself today with the abolition of ARENH, since, again, in a shared way, we see electricity prices continuing to rise instead of returning to the level that electricity in France was a few years ago.

So, regarding all the activities that are still with France, and it was quite obvious and very quickly, as we said, we contacted more than 50 players, some of whom we had in-depth meetings with. It was obvious that the platform structure was a handicap for any buyer and that it was extremely complicated to modify or re-establish, unless you completely overhaul it, reinvest, and thus arrive at economic structures and figures that are not very compatible with these activities, which are mainly commodity activities. We're talking about salt. So, industrial salt, which is sold a bit more expensive, but classic salt is sold for a few euros or a few tens of euros per ton. So it's extremely low. We're talking about soda, chlorine. So we're talking about commodity products that are not high value-added products. So all the players we saw, and we saw the big salt players, the big chlorochemical players, the big isocyanate players, they all came, they all discussed, and they all concluded that in the current platform structure, profitability was not possible for anyone. The only one that emerged with a solution, which is BorsodChem, is because it has an HDI capacity that can bring HDI monomer to the site and from there competitively manufacture derivatives that are products made from these monomers to be competitive on the European market. So all the players concluded the same thing, whether regarding access to energy or the sizes of the units. As I said, this platform, particularly the monomer part, suffered from the shutdown of the largest activity that provided the platform's volume as early as 2013-2014. However, all the external components that supplied raw materials and utilities were not resized. So at some point, we need to be able to resize to have costs that are adapted to the size. And that was seen by all the players. So yes, and it is our opinion, when I say our opinion, management and with the help of the consulting firm accompanying us, that it is not possible to find, in the current state, an economic situation on this same perimeter that brings long-term profitability. Long term, as often in industry, is about ten years of projection. So from our point of view, it is extremely complicated to find solutions with a constant perimeter on the platform as it is today.

So yes, we saw this project arrive a few days before the hearing that was planned for early March, which we thought would be one of the last hearings given the company's cash flow situation. So this project emerged, led by a number of employees and, as you said, a number of local authorities and other actors. So this project was presented and put together in the few weeks before the hearing on April 10. Unfortunately, during the hearing, the court noted two things. First, the financing was not finalized, and therefore all the conditions precedent to allow the evaluation of the file were not met. First point: the file was not capable of being evaluated at that time. Secondly, the request made during the session by the project leaders, which was to ask for 4 more weeks, at least 4 weeks of additional time. Well, these 4 weeks would have impacted a cash flow timeline that had been presented, on which we were extremely vigilant, which was to be able to finish securing the site and finance the departure of employees on time. If we had delayed by 4 weeks without the project succeeding, we would not have been able to finish securing the site or treat the employees as we had committed to. So the court's decision, and it is simply recorded by the court, the flexibility in cash flow was 2 weeks. So 4 weeks was just impossible without taking an extremely high risk. Moreover, the file was not really evaluated. So fundamentally, we didn't have the discussion we should have had, but regarding financing, the file was not ready, and the company, you mentioned management's refusal, management never refused anything because the decision is in the hands of the court. The procedural bodies presented the state of cash flow, the risk beyond 2 weeks, and the court judged that 4 weeks was far too great a risk to take for all the other employees.

So again, we didn't formulate opposition. We formulated, and I had the opportunity to formulate, doubts about the business plan associated with this file, since the basis of the nationalization project, when it was mentioned, was the turnaround project that had not succeeded and that had led us to conclude in September, before filing the file, that the company needed 200 million euros in cash to finance the business plan, with a return to cash flow equilibrium that was extremely fragile, to say the least, for many years. So an extremely fragile plan, including a market turnaround that accounted for about 200 million over the duration of the same plan. Based on the latest evaluations we did with current market prices and volumes, it's not 200 million, it's more than 400, it's exactly 370 million that would be needed. So obviously, our comment as management was to say, here is a project that requires 370 million and never returns to equilibrium, and therefore, nationalize for what purpose? And after that, we are not in a position to give an opinion beyond the business plan, but we had exactly the same discussion with Bpifrance, indirectly through the director, in June, where financing proposals had been made, and our response was, if there is never a return to equilibrium, we finance and we see each other in a year, two years, three years with exactly the same problem. So as long as there is no sustainable business plan, it is not possible to finance with public funds or to nationalize, since it would be a sunk cost, only to come back to the subject a few years later.

Quite simply, I am not able to confirm or understand these 200 million per missile. I don't know anything about it. We are not an actor in this type of product. What I simply want to point out is that I will separate what we are discussing in terms of strategic products for defense and products for nuclear. Let's stop the discussion on nuclear right away. It's about chlorine. Chlorine is everywhere in Europe. European capacities are operating at 65%. Today, chlorine is everywhere. Yes, effectively, it will have to be brought from a bit further away, it will cost a bit more. But for me, there is no issue regarding the nuclear subject. As for salt, any modification in any industry requires homologation. How much does it cost? I am not able to judge the figures you gave. So I will not venture into conclusions to tell you yes, effectively, the figures presented will certainly need to be validated and examined because they seem enormous to me. But I am not the DGA to know and determine the re-homologation processes for new products.

So, I think here again we are on a subject that has either been misunderstood. In any case, everything that is said always seems a bit strange. The patent portfolio of Vancorex France is 90%, no more than 90% of patents that relate to isocyanate derivatives. It was almost the only activity covered by R&D, the R&D team in Saint-Fons. And since it is a specialty activity, it needs innovation and R&D, so effectively this R&D associated with the isocyanate derivative assets was taken over. These patents were taken over by the company BorsodChem. There are three other patents, three: two concerning monomers and one concerning electrolysis. The patent on electrolysis was not taken over by BorsodChem. The two patents on isocyanate monomers were taken over, and effectively, BorsodChem, being a producer of isocyanates, the group in which they were taken over, certainly with a view to protection, to prevent someone from coming back to produce nearby or using this technology, especially when you know a little about the details of this market. There are two other Chinese players trying to build capacity in China and looking for know-how, and they would be very, very interested in acquiring this know-how. So effectively, the isocyanate know-how, these two patents, were part of the acquisition perimeter. Another element outside of patents is the know-how, because there are patents and then there is know-how. Know-how is, of course, constitutive of the units. So effectively, the know-how is in the units that were taken over. The units that were taken over are only the derivative units, and none of the other units. Nevertheless, the know-how was taken over by BorsodChem in its entirety. In the court's judgment, it is clearly noted that BorsodChem commits to granting free use of the know-how to any company that would take over the upstream isocyanate assets.

So the electrolyzer was installed and started up in 2016. It's a project that started, the first agreements were signed between 2011 and 2013. These are long-term projects. It was installed as part of a new Technological Risk Prevention Plan (PPRT). To meet the new requirements of this PPRT, we needed to upgrade the electrolyzer. So I think it might be interesting to talk about the investment figures. As I said in my preliminary remarks, the company has had just about balanced operational results for many years. This means that all investments have always been financed by the shareholder, the ultimate shareholder. And so when it was necessary to invest in a new electrolyzer, about 100 million euros, 103 million exactly, subsidies were discussed with the state, with local authorities, the region, and 43 million were subsidized by the state, the region, and the local authority of the Grenoble region. So 43 out of 103 million to answer your question. And what becomes of it is that today the industrial assets are on site, can be bought, and could be bought from the liquidator when these assets are liquidated. And as I said earlier, the court's decision is very clear. The know-how associated with the electrolyzer will be transferred to whoever takes over the electrolyzer. So today, the electrolyzer is free to be taken. The salt production is free to be taken. The company Chloralpe exists. It is not completely stopped, even if it no longer sends products to Pont-de-Claix. All of this exists. All these assets exist. The know-how is available. So it is available to any buyer who comes forward, in the context of a post-liquidation situation, to the liquidator.

So again, this is quite difficult to estimate. The industrial chain impacts are known. Arkema's impact has been made public, it's not for me to comment on that decision, but in any case it is an impact, a consequence. There was another consequence on site, as Air Liquide's activity on site, which included about ten employees from memory, also stopped because the only client was Vancorex. For the rest, the impacts will be on subcontractors and on the community, because if jobs are not recreated in the same basin, it will not recreate or maintain indirect jobs. In the estimates that were made, we always talked about four to five times the direct jobs in indirect impact.

So, on the first question about cleanup, again, I am too recent at Vancorex to understand what was actually gained or not by previous players. I won't go in that direction. The only thing I want to say today is that the main actors responsible for the cleanup are still on site, they are still present. Vancorex, which has existed since 2012 if we consider the date of exit from the Rhône-Poulenc fold, the pollution created by these activities over the last 12 years is extremely low. We had the opportunity to conduct studies to reassure the Chinese buyer to show that there had been no evolution and that there is historical pollution that exists. But those responsible for this historical pollution and the companies are still on site, they haven't left. So when we talk about cleanup, I understand your question and the concern behind it, but today the people who are still in charge of the cleanup are on site, they are actors on the site. So that's a first point. Second point, if we want to revitalize a platform, we are not obliged to clean up everything. I don't know any chemical platform. We talked about the Carling platform, which I know well. I can tell you about the Italian platform in Porto Marghera, which I know well. There is no cleanup. On the other hand, there are a whole host of compatible activities that can be put back in place. So there is continuity; these platforms are a hundred years old, they are perhaps almost impossible to clean up. So if we want to put figures on it, we always end up with quite staggering figures. But that's not the point. The point is to revitalize it with activities that are compatible with the situation. Today on the Pont-de-Claix platform, people are moving around on the roads, working, and they are not overexposed. And when they are, they are monitored. When there are cases of suspicion, there are checks. So this platform is usable. But effectively, it is extremely complicated to answer a question about where the responsibility of an industrialist should lie. Because as far as I'm concerned, if all chemical industrialists had to provision for the cessation of all their activities, as I've been told, there would be no more chemistry at all, and that would be settled once and for all. So that's not the solution either. So effectively, we live with a past, a past where the consideration of the environment was not the same as today. But as I often say, you can't ask a company like Vancorex to be responsible for it because, somewhere, the responsibility is also collective. Not necessarily everyone, but it is collective. As for your second question on European standards, I will broaden it. So, the question of European environmental standards. Well, first of all, it's a good thing. European chemistry has responded positively to these expectations because it is also an element of differentiation and competitiveness, if we don't go too far and if we don't want to go too fast, and basically if we don't create extremely significant differences compared to other regions. So everything is in moderation. So yes, moving towards a more respectful chemistry, a more environmentally respectful industry with less impact. Yes, but we cannot decide to go at a speed and impose a speed that is not compatible with economic time and international competition. That's the only limit. So effectively, there are regulations that, before being implemented in Europe and transposed into French law, not to say over-transposed, there are things that need to be looked at, particularly the impacts of wanting to go too fast. Nevertheless, it remains a good thing, and I think everyone says that. It's a direction because it also generates value for the industry that upgrades itself on these environmental elements. So everything is in moderation and in complexity. Effectively, if we go too fast, too far, we push industrialists out of the competitiveness they need to be present on the international market.

So, on this last point, it doesn't boil down to a check, as I said earlier. There are a number of aids. So, there are a number of schemes that exist, and for once in France, we have a number of support schemes in these situations that are significant. I mentioned the CSP, an aid that will be provided to employees for 12 months to help them find new jobs. So effectively, it's complicated, it's always complicated for employees, some of whom have been with Vancorex for a long time, to have to find new jobs. It's sometimes very complicated. Nevertheless, there are a whole host of structures financed by the state, around France Travail, to help with employee reclassification. We didn't wait around doing nothing, because we contacted companies very quickly for which we had new investment and job search opportunities, particularly not far from the Jarry platform, since a neighboring industrialist is investing. I remember that our HR director called the HR director as early as September to say, 'Watch out, we're going to have a departure timeline, it would be good if this could be arranged.' Since then, we have created a kind of forum where we ask economic actors we meet or know to send us their offers so that they can be proposed directly at Vancorex. Today, the employees have left, or almost all have left, or will leave very soon. So this will continue in reclassification cells like the CSP. But effectively, we tried to help, even if honestly, helping 400 people find new jobs for a small HR and management structure like Vancorex is very, very complicated. But nevertheless, we tried to do it as much as possible.