Interview of Jim Ratcliffe in my Flemish Financial Newspaper

[Jean Mercier]

With his picture on the Front page too.

Here the unformatted and uncorrected translation

Ineos CEO Jim Ratcliffe: 'Does Europe still want a chemical sector?'

“If no more investments are possible in Europe, the chemical sector will slowly die, as the textile sector has died,” warns Ineos CEO Jim Ratcliffe.

Interviewer : WIM VAN DE VELDEN



"It would be foolish to say no to Project One," says Ineos CEO Jim Ratcliffe in a conversation with De Tijd, after the permit for the construction of an ethane cracker in Antwerp has been destroyed. 'It would mean the end of chemistry in Europe.'

The first sod for Project One of the British chemical group Ineos happened at the end of 2022 with a lot of festivities. The construction of a new ethane cracker in the port of Antwerp, the first in Europe in 25 years, was a 'gigantic step towards sustainable chemistry', it was said. Nevertheless, environmental organizations resisted from the start because of the 'devastating effects on the environment'.

Last week, the Council for Licensing Disputes dealt a blow to the project for the production of ethylene, one of the most widely used basic chemicals in the world, with the cancellation of the permit. It was also a blow to Jim Ratcliffe, the CEO of Ineos. The British billionaire has built up an entire business empire and wants to add the iconic British football club Manchester United to it, but for now his attention is mainly focused on Ineos' core business, chemistry.

Because after the initial partying, Project One is now hanging by a thread. Again, nitrogen is the bummer. The Council for Licensing Disputes ruled that the nitrogen impact on the Brabantse Wal nature reserve, just across the border in the Netherlands, had not been mapped out in sufficient detail. “The destruction of the permit was a complete shock,” says Ratcliffe in his first interview in Belgium in ten years, which is also the only one about Project One.

Didn't you see the destruction coming?

Jim Ratcliffe: "No. I honestly never thought that could happen. The permit has been taken away from us because we would emit too much nitrogen. Let me dwell on that for a moment. The chemical cluster in Antwerp produces 10,000 tons of nitrogen annually. Project One involves 167 tonnes per year, which is almost zero. Our project accounts for an annual emission of up to 0.12 kilos per hectare, while 33 kilos per hectare per year comes from other sources. In other words, a 250th part of the total nitrogen in the two Dutch provinces where the problem is located. The judge himself says that this is negligible. It's so little you can't even measure it. It's equivalent to driving a tractor for two hours a year, one-hundredth of a cow a year, or three barbecues a year. It makes no sense.'

Nevertheless, the ethane cracker has been criticized from the start.

Ratcliffe: 'Project One is really a good project for Belgium, for the Antwerp chemical cluster, for Europe and for Ineos, but above all it is good for the environment. It is the greenest and cleanest chemical plant in the world. The ethane cracker makes the building blocks essential to our way of life. Unless you want to crawl back into a cave, we enjoy life as we know it: we have medicine, we buy packaged food, we love our iPhone, we love our car, and we all have a toothbrush and a tennis racket. Project One is needed for all those things.”

“If you look at Europe, the question is whether you want to make those products here or push production elsewhere in the world. To places where they have less regard for the environment. Project One uses the best technology in the world and is the world's greenest ethane cracker. The carbon footprint of the ethylene that Project One would produce is 2 million tonnes per year lower than any cracker in Europe. To give you an idea: that corresponds to 1.6 million cars. So with Project One you take the equivalent of 1.6 million cars off the road.”

What if Project One has to be shut down?

Ratcliffe: “We have been at it for five years. 10,000 people around the world are working on the project. We invest 3 billion euros in the construction of the ethane cracker in Antwerp, another 1 billion to bring ethane - a by-product of shale gas - from America to Europe (to be converted into ethylene in the cracker, ed.) and we pump 2 billion euros in the construction of storage capacity in America. All in all, this is already a project worth 6 billion euros, to which we have already committed 80 percent of the total investment. And then suddenly they take away the permit.”

Is there still a future for the chemical cluster in Antwerp, or for chemistry in Europe as a whole?

Ratcliffe: 'Chemicals are a one trillion euro industry in Europe, just as big as the car industry. But there will only be a future if there is renewal. In the manufacturing industry you have to invest continuously to stay in the game. If you do not attract new investments, the existing assets will slowly but surely degrade. Factories get old and expensive to maintain, and eventually they close. If no more investments are possible in Europe, the chemical sector will slowly die, just as the textile sector has died. With Project One, Europe is sending a signal: does it want another chemical sector, or does it want to push it elsewhere in the world?'

Will there not always be a need for chemical products in Europe?

Ratcliffe: 'Europe is a gigantic market and the need for chemical products is just as great in Europe as in the US. But it's tough to invest there. Gas is four times cheaper in America than in Europe, electricity is two times cheaper. And nowhere else in the world does a carbon tax exist like in Europe. If they then take away the permit for the greenest chemistry project after five years, no one in Europe will ever invest in chemistry again. No one.'

Can the European Union's green agenda be reconciled with the dream of reindustrialisation?

Ratcliffe: Yes. See how they do it in America. There they demand that companies use the best possible technology. You are not allowed to build bad factories there anymore, only good ones. In Europe it seems that you are no longer allowed to build any factory, not even the best in the world. You don't help the climate and the environment with that, because you do need the products from that factory. As a result, you move those investments to Thailand or Indonesia. Europe does that, while America demands constant innovation. They use the carrot, not the stick.”

America loves innovation. By building new factories, the old ones close. No less than 20 Project Ones have been built there in the past ten years, zero in Europe. Project One is the first new chemical plant of that size in Europe in 25 years.”

Why did Ineos actually choose Antwerp?

Ratcliffe: 'Antwerp is the most important chemical cluster in Europe and the second most important hub for petrochemicals worldwide, after Houston in the US. Such a cluster is important, because you cannot build a chemical factory in an isolated environment. Its location on the coast is also an asset, as it makes transportation easy. The location is ideal, because the industrial part of Europe is located in the north. Antwerp is well managed and organised, and the Belgian government is always very supportive of the petrochemical industry, which is so important to Belgium and Europe.”

Do you expect that a permit will still be issued for the ethane cracker within six months?

Ratcliffe: 'I have received commitment from the Flemish and federal corner that the problem will be solved. In conversations, the Prime Minister indicated that it is important for Europe that new investments are still possible. That's what I wanted to hear. Otherwise we should have stopped. It would be foolish to say no to Project One. That would have disastrous consequences: it would mean the end of chemistry in Europe, it would be a disaster for Antwerp and a disaster for the environment.”

By the way, are you not interested in taking over FC Antwerp?

Ratcliffe: (laughs) "The focus is now on chemicals, Wim."

Bio Jim Ratcliffe (70)

Sir James Arthur Ratcliffe is a British billionaire who founded the chemical company Ineos in 1998. He is its owner and chairman. He made his fortune by buying up unwanted chunks of companies whose profits he believed could be doubled in five years.

For tax reasons, Ratcliffe moved Ineos' headquarters to Switzerland. He himself has a place in Monaco. He has a 250-foot yacht, the Hampshire II.

He founded Ineos Automotive to build a replacement for his Land Rover Defender. In 2019, he entered into a partnership with BMW and the car manufacturer Magna Steyr. The car project was codenamed Projekt Grenadier.

Ratcliffe is a sports fanatic. In 2013 he ran the Marathon des Sables in the Sahara. He owns several football clubs, including FC Lausanne-Sport and OGC Nice. He also made an offer for Chelsea, but it fell through. Now he has set his sights on iconic British club Manchester United.

Ratcliffe bought the Team Sky cycling team in 2019, now Team Ineos. In 2020, the chemical company became the main sponsor of Mercedes in Formula 1.

 

[AWo]

Actually Ineos has dictated some serious cost cuttings over their business units, due to low demand and utilization of their plants in Europe.

It is also not the first time that JR complains. Last time when he did not get his fracking allowed. And he spend billions in ProjectOne in Antwerp after that. However, this time the chemical industry faces high energy costs and chemical industry means chemicals and energy.

AWo

 

[LC0013]

Actually Ineos has dictated some serious cost cuttings over their business units, due to low demand and utilization of their plants in Europe.

It is also not the first time that JR complains. Last time when he did not get his fracking allowed. And he spend billions in ProjectOne in Antwerp. However, this time the chemical industry faces high energy costs and chemical industry means chemicals and energy.

AWo

Usually when you have billions invested you also have the ears of a few politicians to hear your complaints. And rightfully so.
Sounded like his complaints are pretty solid and justified.

 

[emax]

And I think politicians (and citizens as well) should be grateful that there is still someone brave enough to invest a fortune in a high-energy factory in the face of such insane energy prices.

There aren't many left who would do that.

 

[AWo]

And I think politicians (and citizens as well) should be grateful that there is still someone brave enough to invest a fortune in a high-energy factory in the face of such insane energy prices.

There aren't many left who would do that.

Yes, but the project has already seen some stops and gos. They monitor it but at some point, there is no return. A big cracker like Ineos builds in Antwerp was considered in West-Europe alrady in the early 2000's. Some companies wantet to realize it, some chemical parks and sites were considered but in the end no one realised it. In the meantine new capacities arised in Asia and Middle East which made it unattractive to create another hughe capacity in Europe at this time.

ProjectOne is targeted slightly different, It's purpose is to serve as a cheap ressource provider for other Ineos sites which need high quality Ethylene. Either you make it on your own or you have to buy it. Ineos decided to create the needed capacities on their own and maybe sell a few tons to others.

AWo

 

[AWo]

And I think politicians (and citizens as well) should be grateful that there is still someone brave enough to invest a fortune in a high-energy factory in the face of such insane energy prices.

There aren't many left who would do that.

On the other hand, that is the reason why some take his complaints not serious. "Huh, he is complainig but he invests. So what is he complaining about?", Keeping in mind that he could invest anywhere in the world. (And he does, like big investments in China, even though he had made some bad experiences with invests there in the past).

AWo

 

[LC0013]

Yes, but the project has already seen some stops and gos. They monitor it but at some point, there is no return. A big cracker like Ineos builds in Antwerp was considered in West-Europe alrady in the early 2000's. Some companies wantet to realize it, some chemical parks and sites were considered but in the end no one realised it. In the meantine new capacities arised in Asia and Middle East which made it unattractive to create another hughe capacity in Europe at this time.

ProjectOne is targeted slightly different, It's purpose is to serve as a cheap ressource provider for other Ineos sites which need high quality Ethylene. Either you make it on your own or you have to buy it. Ineos decided to create the needed capacities on their own and maybe sell a few tons to others.

AWo

Must not be too unattractive to INEOS if they were still trying to get it operational. Seems like a cutting edge plant would be what Europe wants as it raises the bar for others.
Instead of getting better the powers to be say Nah, let's just go stagnant, or go overseas. Not very good logic in my opinion.

 

[TD5-90]

On the other hand, that is the reason why some take his complaints not serious. "Huh, he is complainig but he invests. So what is he complaining about?", Keeping in mind that he could invest anywhere in the world. (And he does, like big investments in China, even though he had made some bad experiences with invests there in the past).

AWo

In Europe, we better realize very quickly now that "It's the economy, stupid!"
Especially here in Germany, national wealth has been destroyed at breathtaking speed in the past 15 years, and it's very sad to see that Belgium obviously chose not to do better...

 

[AWo]

When you build a cracker of that dimension, you do not look in one country. That is something on a European or even global level. You remarkably shift capacities getting such a cracker to the market. We're talking about tons and tons and tons of product. That of course also affects politics.

You have to consider things like, how do you get enough stock in and your product out, if possible as independent from traffic jams, low and high water etc. You need to look where educated workers and engineers are available. Otherwise you have to make attractive (and expensive) offers so these people move to your site from where ever they live. Maybe a university is close by, where you can get new high potential employees. And energy. A lot of energy.

So you look at water ways, in and out, railways, streets, pipelines...schools, universities etc. .that must all match. Then you look at the site. Do you have acres left over, which may result in less gouvermental approvements, environmental approvements, reports etc. and you may have employees already there? Or do you have to buy new land with all the processes and years and money to get an approval to start a new chemical site.

However, if you have acres left, that doesn't mean automatically that this is the perfect site. If the existing plants already saturates the feed stock and product shippment, you can't add more tons and load, as you do not get enough feed stock in and product out to the customers.

You can't just start building a chemical site, so while you look for a site ony a few spots will remain which fulfill your requirements, at least as much as possible.

It is not so easy for a company to stick to one country. The requirements are so complex, that it is natural to increase your search radius.

BTW, in the beginning Ineos looked at a few sites in England, Wales and two in Scottland. One dilemma was not to be to close to the strong worker councils but not to far away that no experts are available. Another dilemma was to have an attractive placce, close to nature but not to far away from the supply. In the end Wales did it and one site in Portugal should be used. First Ineos tried to by the engine plant from Ford, but that didn't work out. Then they bought their own land. However, things changed quickly, when the word got around that Hambach will be sold.

AWo

 

[trobex]

Europeans just want cheap chemicals made in other Countries so they can continue to tout on about their fake 'eco' numbers. No offence to anyone there, but consuming stuff imported from other countries is the same as making it yourself domestically. It is hard to believe western countries are failing in Chem, Battery, most other Tech RND and just about ANY productions of such things. In Australia, it is cheaper to export our iron ore raw, and import the processed bar. I am not sure about the MEGA quantity of energy, fuel, chemicals required to undertake such a process is any 'greener' - in fact, it simply cannot be. Jim is right regarding the Chem sector.

 

[emax]

@AWo,

we're talking about different things. For you it is about the motivation of INEOS, for me it is about the impact on the market (human resources, taxes and all other consequences) in Belgium and Europe. And the latter one is imho indeed worth supporting such a project - even if the motives are self-serving to a degree.

Apart from that: No company in the world would invest into something without self-interest. It's all about money. Always. Everywhere.
There is no "Caritas Inc.".