Chemical brothers bond for strength

Switzerland-based chemicals major Ineos Group Ltd is banking on its upcoming projects in China to drive growth in the rapidly changing global energy market.

China's huge petrochemicals market and steady demand are key factors propelling growth in the global markets, says Jim Ratcliffe, the 61-year-old founder and chairman of Ineos, the fourth largest chemicals company in the world in terms of revenue, after BASF, Dow Chemical and LyondellBasell. It is also the largest privately owned company in the United Kingdom

Ratcliffe says the eurozone crisis has made Europe's energy market uncompetitive, while the development of shale gas has opened up new investment opportunities in the US. China, on the other hand, is becoming increasingly self-sufficient in petrochemicals, he says.

Jim Ratcliffe says Ineos will use the same quality standards it uses in the West in its Chinese facilities. Zhang Chunyan / China Daily

Ineos, which started operations 15 years ago, has 51 sites in 11 countries and employs 15,000 workers globally. The company reported revenue of $43 billion in 2012.

Over the past few years, Ineos' profits have halved in Europe and tripled in America, largely because of the company's investment in new shale gas assets in the US. According to Ratcliffe, more than two-thirds of the company's assets are still in Europe and the falling yields there are a cause for concern.

Investments in China, however, have provided enough room for optimism, he says. Ratcliffe says the company is setting up two chemical plants in China next year, involving investments of more than $1 billion, to cater to the growing domestic chemical market.

The first project is a joint venture with Tianjin Bohai Chemical Industry Group Corp to produce acrylonitrile in Tianjin, while the second is a joint venture with Sinopec Yangzi Petrochemical Co to produce phenol in Nanjing.

Both acrylonitrile and phenol are important ingredients that could fuel China's industrial boom. Ratcliffe believes Ineos can be a key player in the technology transfer process.

"Our principal contribution is technology. We've been the world leaders in phenol and acrynitrile production with 15 years of accumulated technology expertise," Ratcliffe says.