The 'Alchemist' Jim Ratcliffe Who Revived the UK's Chemical Industry in Crisis [Hidden Industry Story]

Founder of UK's Largest Chemical Company 'INEOS'
Chemical Giant with Annual Sales Exceeding $60 Billion
Pledged His Own Home as Collateral in Early Startup Days
Acquisition Strategy Leveraging Private Equity and Secured Loans
Grew into a Multi-Trillion Won Conglomerate in Over 30 Years
Chairman Ratcliffe's Core Management Strategy: 'Vertical Integration'

Jim Ratcliffe, founder and chairman of the British chemical company INEOS. / Photo by INEOS YouTube capture

[Asia Economy Reporter Lim Juhyung] The United Kingdom, the birthplace of the 19th-century Industrial Revolution and a powerhouse in advanced industries such as pharmaceuticals and aerospace, once stood out in the chemical industry as well. However, it faced a major crisis due to manufacturing downturns and the decline of leading companies. Despite the widespread devastation in the chemical sector during the economic slump, only INEOS, led by Jim Ratcliffe, achieved great success and has now established itself as a giant representing British chemistry. Starting from a small refinery, Ratcliffe built one of the world's top five companies by revenue in about 30 years. What is the secret behind Chairman Ratcliffe's management success?

◆ The Hidden Powerhouse in the Global Chemical Industry: UK’s INEOS

INEOS, led by Chairman Ratcliffe, is actually not well known to the general public relative to its size. This is because INEOS focuses on business-to-business (B2B) operations and has almost no famous consumer brands, and also because it has never been listed on the stock market, remaining a private company.

However, INEOS has a tremendous impact on the global chemical industry. According to official website data, INEOS generated over $65 billion (74.36 trillion KRW) in revenue last year and directly employs more than 26,000 people worldwide. By revenue, it ranks among the top three companies globally alongside BASF and Sinopec.

Chairman Ratcliffe, who is known to own about 60% of the company’s unlisted shares, also holds a net worth of approximately $17 billion (19.448 trillion KRW) this year according to Forbes, making him one of the richest individuals in the UK.

◆ Putting Everything on the Line, Even Mortgaging His Home for Success

Born in northern England in 1952, Chairman Ratcliffe lived in public housing with his working-class parents. After graduating from university, he worked at the oil company Esso, and in 1992, he was recruited by an American private equity firm, marking the start of his full-fledged management career.

In the 1990s, the British chemical industry was in crisis. Imperial Chemical Industries (ICI), the UK’s largest chemical conglomerate, was faltering. At that time, ICI and several other large companies were selling off numerous chemical plants, both large and small.

Ineos' oil refining facility in Scotland, UK. / Photo by Wikipedia capture

Chairman Ratcliffe saw the chemical industry’s crisis as his opportunity. In 1992, he pooled all available resources?including his entire fortune, the American private equity fund, and a mortgage loan?to purchase a small refinery with 400 employees at a bargain price.

According to his autobiography published in 2018, the decision to buy the plant was a "crossroads" in Ratcliffe’s life. If the management failed, he risked losing all his accumulated experience and capital and falling into debt. He engaged in relentless debates with his family for a whole year about mortgaging their home, where he lived with his wife and two sons, and only after obtaining his wife’s consent was he able to sell the house as collateral.

However, Ratcliffe’s "all-in" gamble did not stop with acquiring the refinery. He continued to aggressively use funds and loans to acquire multiple plants, eventually founding INEOS in 1998.

INEOS’s rapid growth largely stems from Ratcliffe’s bold decisions on mergers and acquisitions. From the 1990s through 2011, INEOS acquired plants from renowned chemical companies such as Amoco, BASF, Bayer, Borealis, BP, Degussa, Dow Chemical Company, ICI, and Monsanto. As a result, INEOS now operates 194 chemical facilities, offices, and R&D centers across 29 countries worldwide.

◆ Building a Competitive Company Through Vertical Integration

Ratcliffe did not focus solely on acquiring plants through funds. INEOS’s greatest strength comes from Ratcliffe’s strategic insight in establishing a management strategy known as "vertical integration." Vertical integration refers to a business approach where the company internally manages the entire value chain?from component production to final product assembly and distribution.

INEOS’s petrochemical business is a prime example of this vertical integration. INEOS owns oil and gas drilling facilities in the North Sea oil fields connecting northern England and Norway and has built massive storage tanks in the Netherlands to store the extracted oil. The stored oil is then transported to chemical plants located in the UK, Germany, and the US, where it is processed into products needed for various businesses. These products are advertised, distributed, and sold directly under INEOS’s own brand from its headquarters.

Ineos' Chemical Plant / Photo by Ineos YouTube Capture

With a philosophy favoring long-term industrial investment over short-term profit, INEOS has also gained support from workers. In 2008, when INEOS acquired a refinery facility in northern Scotland, it reached a "deal" with Phil McNulty, then chairman of the labor union.

At that time, McNulty told the British media outlet The Guardian, "Ratcliffe sometimes acts like a private equity fund and can be ruthless regarding labor costs," but he also acknowledged, "He is not just someone focused on asset sales. He is a businessman investing in 'real industry.'"

British journalist and author Peter Forbes wrote in his 2018 essay "Is INEOS the New ICI?" that "Ratcliffe’s INEOS succeeded because it returned to the roots of the chemical industry," and "He has effectively revived an industry that was nearly dying in the UK. It is truly remarkable."

◆ The Strategic Visionary and Mysterious ‘Alchemist’ of British Chemistry

Chairman Ratcliffe was recognized for his contributions to the British chemical industry by being granted a special research fellow status by the Institution of Chemical Engineers in 2008. In 2018, he was also awarded the Order of the British Empire by the Queen.

Despite his high profile and influence, Ratcliffe is known to avoid media exposure as much as possible. He rarely comments on his political views, except for expressing support during the 2016 UK Brexit referendum, stating that "long-term gains should be pursued over short-term losses."

Thanks to his strategic vision and mystique, Ratcliffe is sometimes nicknamed the "Alchemist" in the UK. He transformed a small oil refining facility into a business worth over 70 trillion KRW in just a few decades.