Jim Ratcliffe: the working-class Mancunian tycoon

Jim Ratcliffe claims to have “a relatively thick Mancunian skin”, but if there’s one thing his friends have learned never to mention, it’s the yacht. The £130m vessel was central to his portrayal as an arch-villain in last October’s bruising stand-off at the Grangemouth oil refinery, owned by his company, Ineos.

Unions accused the “secretive tycoon” of scheming to close the plant from his floating palace in the Mediterranean. Ratcliffe won that battle hands down, but seems to have learned a few PR lessons too.

He is giving interviews for the first time in years: depicting himself as a visionary, but misunderstood, industrialist – albeit one with a jaundiced view of Britain’s prospects (see below).

He has a point, surely, says the Financial Times. Since establishing Ineos in 1998, Ratcliffe has built a £43bn global chemicals machine “from scratch”, despite nearly losing the lot in 2008. If Ineos were listed, it would be Britain’s fourth-biggest manufacturing business by sales after BP, Shell and Unilever.

Ratcliffe is “the best entrepreneur in Europe”, his American friend and banking partner, Steve Conway, told the BBC. A consummate dealmaker, he looks for “orphaned assets” in unloved blue-chip firms and turns them round.

His metric is to “double cash flow within five years”. His trick, says another friend, is “relentless persuasion… He just doesn’t give up till you do what he wants”.

Ratcliffe lives in Switzerland, having moved the company there in 2010, partly out of disgust with a Labour government that refused to defer £350m in VAT payments when Ineos hit covenant problems with its banks.

In person, “he hardly seems to match” his villainous alter ego, says the FT. Tall and lean, he bears a passing resemblance to Sir Ranulph Fiennes – and has himself trekked to both the North and South Poles. He’s also a compulsive runner, pushing himself so hard that he ended up on a drip after the 1996 New York Marathon.

Ratcliffe was brought up in a working-class community near Oldham. “I recall being able to count more than 100 mill chimneys from my bedroom window,” he told The Daily Telegraph. His father, a joiner, prospered, eventually running a factory that made laboratory furniture.

Ratcliffe studied chemical engineering at Birmingham before taking jobs at Esso and Courtaulds. After an MBA he spent years honing his dealmaking skills at private-equity house Advent International before founding Ineos.

In its first ten years, Ineos made more than 20 acquisitions from the likes of ICI, BP and BASF, “using debt markets to fund the spree”, says the FT. Ratcliffe’s greatest coup was landing BP’s chemicals business, Innovene in 2005 (Grangemouth was one of its plants).

Ineos borrowed £9bn to finance the deal, before being “tested to the limits” by the financial crisis. Ratcliffe likens the rise, fall, and resurgence of Ineos as a “mature” business to “a three-act play”. It seems somewhat vain-glorious to rule out a fourth act.

Does Britain have an attitude problem?

Jim Ratcliffe’s story encapsulates the changing nature of British manufacturing, says Sylvia Pfeifer in the FT. An industrialist, he “does things that were fashionable in the 1970s”, and “kept going when the rest of the country stopped”. But he has moved with the times.

“He left behind paternalism, public equity markets and even a country, in favour of hard logic, the bond market, and multinational sheltering in a tax haven.” Many think his methods ruthless. By vowing to close Grangemouth unless unions agreed to tough changes on pay and pensions, “he threatened to destroy a large part of my community”, says the local MP, Michael Connarty. “He was not right to do it.”

The counter-argument is that Ratcliffe has done Britain a favour by buying unloved assets and keeping them going – he certainly thinks so. Can Britain reverse the decline in manufacturing? Ratcliffe thinks there’s an attitude problem.

“Ten years ago, Ineos already had $20bn or $30bn of sales, but you still couldn’t get to see the business secretary.” The Grangemouth stand-off at least raised his profile politically, he told Jo Fidgen on BBC.co.uk. He can now get Downing Street and Alex Salmond “on hotline”. Even so, he sometimes wonders what Ineos is doing in Britain, says Alistair Osborne in The Daily Telegraph.

Low skills, high energy costs and an expensive workforce make it unattractive for manufacturers – he wishes the government would stop “faffing” over shale.

That’s hardly surprising – Ratcliffe has long sought government grants to part-finance a £350m gas terminal investment at Grangemouth to import “cheap US shale gas”, says Brian Groom in the FT.

Indeed, critics charge that Ineos has a history of holding governments to ransom, says The Independent. Having bought ICI’s Runcorn chlorine plant in 2000, he asked the government for £300m; the alternative was to close “the plant with the loss of 133,000 associated jobs”. Sound familiar?

Merryn

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