INEOS

INEOS Group Limited is a British multinational chemicals company headquartered and registered in London. As of 2021, it is the fourth largest chemical company in the world.

Ineos is organised into about 20 standalone business units, each with its own board and operating almost entirely independently, although founder Sir Jim Ratcliffe and his associates appear to occasionally sit on their boards.

History

In 1992, Inspec was formed by Sir Jim Ratcliffe, previously a director of the U.S. private equity group Advent International, and by John Hollowood, for the purpose of executing a management buy-in of British Petroleum's (BP) chemicals arm.

First acquisitions

In 1995, Inspec bought BP's ethylene oxide, and glycol, businesses for £78 million, to become Inspec Ethylene Oxide Specialities.

In 1998, Ratcliffe, then a director of Inspec, established Ineos for the purpose of purchasing Inspec's ethylene oxide facility in Antwerp, Belgium. The £84 million purchase was funded by three entities: the Scottish investment house Murray Johnstone (£10 million), Ineos management (£1.5 million), and the investment bank BT Alex Brown (£72.5 million, raised through junk bonds).

The company grew quickly through the acquisition of commodity chemical businesses from corporate giants such as BP, ICI and BASF.

Many subsidiaries acquired

There have been three distinct phases of Ineos's growth. The first phase spanned over ten years, with Ineos acquiring 22 companies between 1998 and 2008. The two most notable of these were Innovene, the olefins and derivatives and refining subsidiary of BP, in October 2005 for $9 billion, and ICI's commodity chemicals business in 2001.

The second phase between 2008 and 2010 saw a period of consolidation as the company tackled the impact of the global recession. As production of consumer goods, cars, and construction fell during this period, the company saw sales and earnings fall. During this period a major competitor LyondellBasell filed for bankruptcy. Some predicted a similar fate for Ineos but the company emerged from this period intact.

The third phase commenced in 2011. In this phase the company has continued to grow through a series of strategic joint ventures.

In June 2011, the largest of these, Petroineos, was completed. It is a 50:50 joint venture between Ineos and PetroChina. It combines Ineos's refining interests at Grangemouth, Scotland, and at Lavéra near Martigues, France (about 30 miles west of Marseille), with PetroChina's access to upstream raw materials.

In June 2011, Ineos and BASF combined their styrene businesses to form another 50:50 partnership, Styrolution.

Ineos's growth has continued through this period, expanding production in the US and China. Most recently Ineos announced a joint venture with Solvay bringing together their European polyvinyl chloride businesses.

Ineos's heritage is in a number of well-known blue chip chemical companies. These include Amoco, BASF, Bayer, Borealis, BP, Degussa, Dow Chemical Company, DuPont, Enichem, Erdölchemie, Hoechst AG, ICI, Innovene, Lanxess, Monsanto, Norsk Hydro, Phenolchemie, Rhodia, Sasol, Solvay, Tessenderlo Chemie, UCB, Unilever and Union Carbide. The company was formed in 1998 to implement a management buyout of the former BP petrochemicals assets in Antwerp, Belgium. Since then, it has expanded by purchasing several other businesses. Several of its divisions formerly belonged to BP, and others that have been divested by large companies such as Amoco, BASF, ICI, Dow Chemical, Solvay and UCB, as they have looked to focus more closely on their main product lines. In October 2005 Ineos agreed to purchase Innovene, BP's olefins and derivatives and refining subsidiary, which had an estimated 2005 turnover of US$25 billion, for $9 billion. The deal, which was completed on 14 December 2005, roughly quadrupled Ineos's turnover, which was previously around $8 billion.

In 2007 Ineos formed a joint venture with Lanxess and created Ineos ABS, comprising Lanxess's activities in acrylonitrile butadiene styrene production, located in Tarragona. Ineos paid €35 million in a first tranche. In March 2010 Ineos Healthcare terminated its drug development programme for commercial reasons.

Establishment of a biorefinery

In February 2011 Ineos Bio broke ground on a landmark advanced biofuels facility in Florida. "INEOS Bio’s biorefinery will have the capacity to produce 8 million gallons of ethanol and 6 megawatts (gross) of electricity per year." "The INEOS Bio process can produce ethanol and renewable energy from numerous non-food feedstocks, including construction and municipal solid waste, forestry and agricultural waste." In July 2013 Ineos Bio announced that the Florida plant is producing cellulosic ethanol on a commercial scale and claim to be the first in the world to do so using this new technology.

Closure of a plant over union demands

On 23 October 2013 Ineos announced the closure of its petrochemical plant in Grangemouth, Scotland, following a dispute with the Unite trade union over pensions and an attempt to impose a wage freeze and new contract on the workforce. However, by 25 October 2013 the union capitulated to the closure threats and agreed to all Ineos's demands meaning the plant would stay open and strike-free for three years. In September 2016 the company completed a new headquarters building at Grangemouth as part of a "site rejuvenation plan".

Purchase of Forties pipeline system

In April 2017, Ineos reached an agreement to buy the Forties pipeline system in the North Sea from BP for $250 million. The sale included termini at Dalmeny and Kinneil, a site in Aberdeen, and the Forties Unity Platform. Towards the start of 2019, in the wake of British MPs rejecting Theresa May's Brexit Deal, the company chose to fund a €3bn investment (£2.6bn) in petrochemical production in Antwerp, Belgium.

Covid outbreak

In April 2020, during the Coronavirus outbreak, hand sanitiser was in short supply due to high demand. Ineos set up new plants to produce it using key ingredients the company had used to manufacture polymers, and provided it free to hospitals.

In June 2020, Ineos signed an intent to acquire the petrochemicals unit of BP for $5 billion. The business is focused on aromatics and acetyls. It has interests in 14 plants in Asia, Europe and the U.S., and achieved production of 9.7 million metric tons 2019. The deal is expected to close prior to the end of 2020.

In September 2020, Ineos inked a 10-year deal to acquire offshore wind power from Engie's Northern wind farm. Terms of the deal were not disclosed.

In January 2021, it was announced that Ineos was to donate £100 million to Oxford University for a new research institute for tackling antibiotic resistance.