The British dream: like Jim Ratcliffe earned $6 billion on the love of chemistry

British billionaire Jim Ratcliffe

Last weekend, The British The Sunday Times reported that British billionaire Jim Ratcliffe talks with the car company, Jaguar Land Rover and its Indian parent company Tata Motors to resume production of the SUV Land Rover Defender. The model was removed from the line in January 2016 after 67 years of production due to non-compliance with modern environmental standards. All these years, fan of the Defender was Queen Elizabeth II who owns the models of different years of release.

According to Forbes magazine at the time of publication of the annual list of the richest people in the world (beginning of March 2016), as Ratcliffe was $5.5 billion — he is fifth in the list of the richest people in the UK and 233 in the world. By mid-July, according to the real-time counter Forbes, the Ratcliffe grew to $6.4 billion.

From the consequences of Brexit — a collapse of markets and the devaluation of the pound sterling — the wealth of Ratcliffe is still intact. His main company, INEOS chemical performance, is a private company not traded on the stock exchange, and its main operations are concentrated in Switzerland, though the company and registered in the UK.

According to the group, in 2015, revenue INEOS has dropped significantly — to $40 billion against a record $54 billion in 2014. Despite this, INEOS still have a few years is considered the largest private Corporation in Britain (according to the index of the Top Track 100, with the support of The Sunday Times). The scope of activities of INEOS extends to 16 countries and about a dozen different areas of production: from natural gas and fuel to pharmaceuticals and packaging. Founder, CEO, Chairman and controlling owner (60%) INEOS is myself Ratcliff.

From the factory smoke

The future ‘king of chemicals” James Ratcliff was born in October 1952 in the city of Failsworth, an Eastern suburb of Manchester. Failsworth was a center of handicraft production (mainly of textiles), but the Manchester in those years was one of the largest industrial centers. But in the middle of the century, the level of industrial production began to fall, and the town’s port could not take a new large bulk carriers, and from the early 1960s to early 1980s years Manchester lost about 150 thousand jobs.

The family of Ratcliffe in the early 1960s, moved to the North-East, in the County of Yorkshire. At the time of son’s birth the family was poor and lived in public housing. Jim’s father worked as a carpenter, but over time have accumulated to opening its own small furniture factory.

Father wanted to give his son a good education, and Jim enrolled in the prestigious school of Berkeley, one of the oldest educational institutions in the world. The advantage of a gymnasium for a poor family was that she was part of the public school system and tuition was free.

After graduating from high school, at the age of 18 years, Ratcliff moved to Birmingham and attended vocational College, which trains personnel for one of the local businesses, he chose a classical education in one of the oldest in the country the University of Birmingham. Study he completed in 1974 with a degree in chemical engineer.

Late start

The first job of a young chemical engineer became the American oil company Esso, which by that time already firmly established on the British market. After a few years, Jim took a job in the British industrial group Courtaulds. The company was engaged in the manufacture of chemicals such as applied business, but the main activity of Courtaulds was the textile industry. One of the oldest enterprises of England, by the 1970 years it has become a world market leader in synthetic fibers. With opening the markets of East Asian countries in the early 1980-ies headed businessmen in search of cheap labor. Courtaulds started to suffer losses, to close the company and in 1990 was divided into two companies, which was soon swallowed up by other concerns.

By the time Ratcliffe was interested in Finance, and he decided to go through a refresher course, received her MBA at the London business school. In 1989, he briefly left the chemical industry — he received an offer from the us investment Fund Advent International, which had just opened in London its first European office.

Jim Ratcliff in numbers

$6.4 billion is the wealth of Ratcliffe on July 2016

$40 billion — the annual revenue of its group INEOS

17 thousand people work in 20 group companies INEOS

Over £40 million Ratcliff bought his first company

60 million tonnes of chemicals manufactured by INEOS annually

$1 billion invested INEOS in exploration of gas fields in Britain

Sources: Financial Times, Forbes, Liverpool Daily Post, details of the companies

Subsequently, Ratcliffe told the Financial Times that a phone call from a recruiter Advent became his life a fork in the path to own business, to being able to do something for themselves. For several years in the Fund, writes the Liverpool Daily Post, the businessman realized what benefits can provide the use of borrowed capital.

In the summer of 1992 Ratcliffe, together with other chemical specialist — John Hollowood, who previously headed the group Laporte, took a loan from Advent, which the partners bought out the oil giant BP of its chemical business. The amount of the transaction (for her sake Ratcliff laid his own house) was not disclosed, but, according to media reports, amounted to about £40 million ($80 million at the time of the transaction and a little over $60 million a few weeks later, after the so-called black Wednesday). At the time of opening their own business to Ratcliff was nearly 40 years old.

A true patriot

The new company created from the former BP assets, called Inspec. Ratcliffe has left a post of the General Director, Hollowood received the position of Chairman of the Board of Directors. In its short history Inspec has grown into a major player — mainly due to the purchase through loans of various chemical assets from leading corporations, such as BASF, ICI and BP the same.

In 1997, Ratcliffe retired from Inspec, creating a new company, INEOS to buy out the assets of Inspec, making delisting from the stock exchange. Publicity by the time the disappointed entrepreneur: prices of chemical raw materials fluctuated sharply and the company’s capitalization was falling. In 1998, INEOS, with the support of venture capital investors bought the major exchanges, Inspec (including the same plant in Antwerp), and the remaining acquired Laporte, native of which was the former partner of Ratcliffe.

Subsequent years were spent in a massive race for assets over the first ten years of INEOS made 15 acquisitions in five countries. The strategy remains the same: buying from large corporations to the various production facilities associated with the chemical industry. Absorption Ratcliff continued to Fund in debt: the company financed the expansion by issuing bonds. Since the end of 2000-ies of INEOS is one of the world’s largest producers of chemicals, for some time been a world leader in the production of chlorine and hydrochloric acid.

Ratcliff is a supporter of “people’s capitalism” and employees of all 20 companies of the INEOS group are minority shareholders. It kompensiruet intransigence billionaires against the unions.

For example, in the summer of 2013 one of the members of Unite (the largest Federation of trade unions in Britain) on the INEOS plant was with the scandal dismissed when Ratcliff learned that he used company resources” for campaigning for the labour party. In October of the same year, after a dispute with the Unite due to the freezing of salaries, Ratcliffe threatened to close one of its refineries in Scotland. Literally two days later, the panic at gas stations forced the workers to accept the terms of INEOS.

Judging by the history with the Land Rover Defender, Ratcliffe is proud of the fact that he is a real Englishman. A few years ago he even arranged with his sons on an expedition to the North pole, where he established the British flag. This, however, did not prevent him in 2010 to migrate your office INEOS in the Swiss Role. The change of jurisdiction has helped the company to save on taxes up to £100 million a year.

In the summer of 2015 Ratcliff announced the repatriation and transfer of part of operations to a new office in London. After retiring from his Minister labour’s Gordon brown, the billionaire returned the business to his homeland only after the corporate tax reduction, held by conservative David Cameron. With the end of 2014, the company is more likely interested in the exploration of shale gas reserves in Britain. Ratcliffe is ready to produce gas — for this, he promises 6% of revenues to the owners of the buildings located above the fields.