The Alchemists

1. From Humble Beginnings to Industrial Giant: The INEOS Genesis

This is a story to be told here: the biography of a world-class British business rising from obscurity and bouncing to the brink and back, a saga of strategic deals, misfortune, near misses and dogged triumph.

Chemical engineer to financier. INEOS's story begins with Jim Ratcliffe, a chemical engineer turned financier, spotting an opportunity in a BP specialty chemical business. With a personal investment of £140,000, Ratcliffe embarked on a journey that would transform a small, obscure company into a global petrochemical and energy powerhouse. This initial move laid the foundation for INEOS's future success, demonstrating Ratcliffe's keen eye for undervalued assets and his willingness to take calculated risks.

Early growth and key partnerships. The early years saw INEOS acquiring businesses and building a strong leadership team. The addition of Andy Currie and John Reece completed the winning trio, each bringing unique skills and values to the table. Currie's operational expertise and Reece's financial acumen complemented Ratcliffe's strategic vision, creating a formidable force in the industry.

Transformative acquisition. The 2005 acquisition of Innovene from BP marked a turning point for INEOS. This $9 billion deal tripled the company's size overnight, catapulting it into the ranks of the world's top chemical companies. The acquisition also brought with it challenges, including the struggling Grangemouth site, which would test the company's resilience and management skills.

2. The Ratcliffe Ethos: Grit, Rigor, and a Northern Sensibility

Here it is very much the basis of INEOS’s success, with all the above qualities allied to a clear strategy and values, and with a deep commitment to the business.

Northern values. INEOS's success is rooted in the values instilled by its founders' modest upbringings in the north of England. These values include hard work, common sense, a sense of humor, and a commitment to honesty and directness. This ethos permeates the company culture, fostering a down-to-earth approach and a disdain for bureaucracy and politics.

Grit and determination. The INEOS team is known for its resilience and determination in the face of adversity. This was evident in the company's ability to weather the 2008 financial crisis and to stand its ground with the unions in Grangemouth. This unwavering commitment to success has been a key driver of INEOS's growth.

Rigorous analysis. INEOS's decision-making is based on a thorough understanding of the numbers and a careful assessment of risk. This analytical approach, combined with a willingness to take calculated gambles, has enabled the company to identify and capitalize on opportunities that others have missed.

3. Acquisition Alchemy: Turning Unloved Assets into Gold

In the end I think the core of our success has been to break the normal ‘rules’, in that 80 per cent of our acquisitions have been a real success as opposed to the opposite for most companies.

Unfashionable assets. INEOS has built its empire by acquiring unwanted and underperforming assets from larger companies. These assets, often deemed too cyclical or unprofitable by their previous owners, are transformed into highly profitable operations under INEOS's management. This strategy has allowed INEOS to acquire businesses at attractive prices and to generate significant returns.

The INEOS toolkit. INEOS has a proven methodology for turning around acquired businesses. This toolkit includes:

• A focus on financial detail
• Fixed cost management
• A federated business model
• Footprint maximization
• A goal to double EBITDA in five years

Breaking the mold. INEOS's success rate in acquisitions is far higher than the industry average. While most acquisitions fail, INEOS has a track record of turning around underperforming assets and creating value. This is due to a combination of factors, including its rigorous analysis, its lean management style, and its focus on empowering employees.

4. The Federated Model: Empowering Businesses, Driving Ownership

For me the federated structure really is the difference maker in INEOS.

Decentralized structure. INEOS operates a federated business model, with each business unit responsible for its own functions and accountable for its own performance. This decentralized structure fosters a sense of ownership and encourages entrepreneurship at all levels of the organization.

Limited head office. INEOS maintains a small head office, minimizing bureaucracy and empowering business units to make their own decisions. This lean structure allows for quick decision-making and efficient communication.

Empowered management. INEOS gives its managers the authority and responsibility to run their businesses as if they were their own. This empowers them to be creative, take risks, and drive innovation. This approach attracts talented individuals who thrive in an entrepreneurial environment.

5. Risk and Reward: Calculated Gambles, Bold Decisions

Risk can be avoided. But then very little happens. So we don’t.

Embracing risk. INEOS is not afraid to take risks, but its risks are always carefully calculated. The company's leadership team understands the importance of weighing potential rewards against potential downsides and making informed decisions.

Transformational deals. INEOS has made several bold acquisitions that have transformed the company's size and scope. These deals, such as the acquisition of Innovene and the formation of the Petroineos joint venture, involved significant financial commitments and a willingness to challenge conventional wisdom.

Perseverance. INEOS is known for its ability to persevere in the face of adversity. The company has weathered economic crises, industrial disputes, and regulatory challenges, emerging stronger each time. This resilience is a testament to the leadership team's determination and their ability to adapt to changing circumstances.

6. Private Power: Freedom, Flexibility, and Long-Term Vision

Retaining our private status has unquestionably been one of the secrets to success.

Avoiding public markets. INEOS has remained a private company, allowing it to avoid the pressures of the public markets and to focus on long-term value creation. This freedom enables the company to make quick decisions, invest in capital-intensive projects, and pursue unconventional strategies.

Control and flexibility. As a private company, INEOS is not subject to the whims of shareholders or the scrutiny of analysts. This allows the company to make decisions based on its own strategic priorities, rather than being driven by short-term financial considerations.

Long-term perspective. INEOS's private ownership allows it to take a long-term view of its business. The company is willing to invest in projects that may not generate immediate returns but are expected to create significant value over time. This patient approach has been a key factor in INEOS's success.

7. Safety First: A Non-Negotiable Priority

Intense attention to safety is our licence to operate. Nothing may come before this priority in our industry.

Safety culture. Safety is the top priority at INEOS, and the company has a strong safety culture that permeates all levels of the organization. This commitment to safety is not just lip service; it is a core value that is reinforced through training, procedures, and accountability.

Life-saving rules. INEOS has seven life-saving rules that are strictly enforced. These rules cover critical safety areas, such as working at height, smoking on site, and disconnecting safety interlocks. Violations of these rules result in immediate dismissal.

Process safety. INEOS places a strong emphasis on process safety, which involves preventing accidents and incidents that could release hazardous materials or energy. This focus on process safety is critical in the petrochemical industry, where the potential consequences of accidents can be severe.

8. The Grangemouth Crucible: A Battle for Survival

We stood our ground with the unions in Grangemouth four years ago and, ultimately, saved Grangemouth and many thousands of jobs.

Industrial relations. The Grangemouth site has a long history of industrial relations challenges, particularly with the Unite union. These challenges culminated in a bitter dispute in 2013, when the union rejected INEOS's bid to save the plant and launched a strike.

Standing firm. INEOS stood its ground during the Grangemouth dispute, refusing to be bullied by the union. This firm stance ultimately led to a resolution that secured the plant's future and changed the course of British union politics.

Shale gas lifeline. The Grangemouth site was saved by INEOS's decision to import shale gas from the United States. This move provided a cost-effective energy source that allowed the plant to compete with its rivals and return to profitability.

9. Shale Gas Revolution: A Transatlantic Gamble

By bringing shale gas from America, we rescued Grangemouth, the largest manufacturing facility in Scotland.

US shale gas. INEOS recognized the potential of US shale gas to transform the European chemical industry. The company made a bold decision to invest in a fleet of tankers to transport shale gas from America to Europe, a move that was unprecedented at the time.

Virtual pipeline. INEOS created a "virtual pipeline" by building a 300-mile pipeline from the Marcellus shale fields of Pennsylvania to a port on the Atlantic coast. This pipeline carries ethane, which is then transported to Europe in specially designed ships.

Reviving manufacturing. INEOS's shale gas initiative has helped to revive manufacturing in Europe, providing a cost-effective energy source that allows companies to compete with their US and Middle Eastern rivals. This has created jobs and boosted economic growth.

10. Beyond Petrochemicals: Diversification and New Horizons

It is a great virtue of a private company, Jim often jokes, that neither a master plan nor slide-by-slide logic need be explained, much less justified, to the public – and it is exactly this enigmatic governance that makes INEOS so fascinating.

New ventures. In recent years, INEOS has diversified its business interests beyond petrochemicals and energy. The company has entered the automotive industry with the creation of a new British car company, INEOS Automotive.

Public eye. INEOS has also acquired iconic British brand Belstaff, and has since bought its first football team, Lausanne Sport – the oldest in Europe. Most recently, INEOS has partnered with Olympic sailing champion Sir Ben Ainslie in a bid to bring the America’s Cup trophy back home after a 167-year absence.

Enigmatic governance. INEOS's private ownership allows it to pursue unconventional strategies and to make decisions without the pressure of public scrutiny. This enigmatic governance makes the company a fascinating and unpredictable force in the business world.

Last updated: April 16, 2025