Europe could lose $1tr chemicals sector

INEOS's Grangemouth petrochemical plant. Picture: INEOS
INEOS's Grangemouth petrochemical plant. Picture: INEOS
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Europe could lose most of its $1 trillion (£600 billion) chemicals industry within the next decade unless it can overhaul its competitiveness in the face of American and Chinese rivals, Ineos boss Jim Ratcliffe has warned.

In an open letter to European Commission president Josè Barroso, Ratcliffe said chemicals was a “jewel in the crown” of the EU economy and urged political leaders to protect it from impending extinction.

Jim Ratcliffe, owner and founder of Ineos

Jim Ratcliffe, owner and founder of Ineos

The industrialist, who almost closed Ineos’ huge Grangemouth petrochemical plant last year before unions agreed to his demands on pay and conditions, said the shale gas revolution in the US meant American factories enjoyed far cheaper energy prices.

He said: “In the US, cheap shale gas has led to a massive expansion of the petrochemical industry. The United States is expected to become entirely self-sufficient by 2020. In contrast, Europe announces closure after closure.

“I can see green taxes, I can see no shale gas, I can see closure of nuclear, I can see manufacturing being driven away. I can see the competition authorities in Brussels blissfully unaware of the tsunami of imported product heading this way and standing blindly in the way of sensible restructuring.”

Over the past three years, Ineos’ profits in Europe have halved, Ratcliffe said, whereas its US profits have tripled.

Even BASF, the world’s largest chemical company, has for the first time announced a strategic cutback in European investment.