The chemicals giant Ineos has its sights on a new target – energy – and it has the resources to make an impact. Run from Switzerland and the UK, the group posted sales of £19.9bn and profits of £2.5bn from its wholly owned businesses, topping Britain’s privately owned heavyweights for a third consecutive year. Including its share of joint venture revenues, total sales hit £29.6bn in 2016. Jim Ratcliffe, 64, founder, chairman and 60% owner of Ineos, is using its capital to move upstream, aiming to make the business the UK’s leading player in shale gas. In his words, “shale and nuclear are the way to keep the lights on”.
A chemical engineer and qualified accountant, Ratcliffe is deploying a tried and tested strategy in pursuit of this goal, buying unwanted or lossmaking assets that he believes can be run more effectively. It is the strategy he followed in 1998 when he led a £91m buyout of Inspec’s chemicals division and started acquiring the unwanted subsidiaries of chemicals giants such as BP, BASF, ICI and Dow.
It was the £5.1bn acquisition of BP’s petrochemicals business Innovene in 2005, including the Grangemouth oil refinery in Scotland, that made Ineos one of the world’s largest chemicals manufacturers. Its chemicals are used in products ranging from plastics to medicines.
Having voted to leave the EU, Ratcliffe believes that using its own raw materials and homemade energy will allow Britain to trade and manufacture its way to a more robust future. Ineos holds UK shale gas licences to more than 1.2m acres, and Ratcliffe has plans to make a 4×4 in the style of Land Rover’s retired Defender model.
Ineos should be able to fuel the car, having acquired BP’s Forties pipeline in April for $250m (£190m) and the Danish giant Dong Energy’s oil and gas business in a deal worth up to £1bn in May. Both are North Sea operations.
If there is anything Ineos is lacking for a post-Brexit UK, it is certainly not energy.
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