The man behind Ineos is not as well-known as some of Britain’s other top entrepreneurs, but in the chemicals industry he has an impressive reputation for making deals. Jim Ratcliffe, a chemical engineer and qualified accountant, founded the company in 1998 when he led a £91m buyout of Inspec’s chemicals division. From his office in the New Forest, Ratcliffe then started acquiring the unwanted subsidiaries of chemical giants such as BP, BASF, ICI and Dow. Initially, Ineos focused on buying low-volume producers of valuable, specialised chemical compounds, before turning its attention to larger-volume commodity producers. The acquisition of BP’s petrochemicals business Innovene for £5.1 billion in December 2005 made Ineos the world’s third-largest chemical manufacturer. It also added the Grangemouth oil refinery, scene of last year’s pension strikes, to its portfolio. The group now consists of 17 separate businesses, operating 64 factories in 14 countries and producing 57m tonnes of chemicals a year. It is Britain’s biggest private company for the third consecutive year, with sales of £23,148m in 2008. However, aggressive expansion has come at a price. Although the company has substantially reduced its debts since acquiring Innovene, its debt covenants became harder to stick to last year as demand started to collapse and the value of Ineos’s oil stocks plummeted. In December the company’s main lenders agreed to waive the covenants, giving Ineos time to put together a new 2009 operating budget and a five-year business plan. A select group of the company’s lenders have been reviewing that plan, and Ineos hopes it will be able to agree new debt covenants in the next few weeks. Ratcliffe, who owns most of the company, was left out of the Sunday Times Rich List this year because the uncertainty facing the business made it too difficult to estimate the value of his fortune. Despite the industry’s problems, Ineos continues to look to the future. It recently announced plans to build a £400m energy-from-waste plant, which will supply power to its chemicals factory in Runcorn, Cheshire. It has also developed new technology for converting household waste into bio-ethanol, which can be used to power cars. Within the next few years it hopes to build the facilities needed to produce this fuel in commercial quantities.
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