Managing in the world of chemicals

Jim Ratcliffe, Chairman and Chief Executive Officer at INEOS Chemicals group, was recently awarded an honorary Fellowship by the RSC.

INEOS has recently grown through a series of acquisitions to become the world's third largest chemical company,  employing more than 17,000 in 20 countries.

Q You trained as a chemical engineer. What made you move over to management?

A On a summer vacation job at BP, Saltend, I got to know a chemical engineer in more of a financial role who had done accountancy qualifications, which was interesting to me. I think you have very practically orientated people who are clearly dedicated to science or engineering and people naturally inclined to take an interest in the wider aspects of management; I was in the second bracket from the beginning. I went to London Business School when I was 26 and I did accountancy. I probably did a bit of everything because I couldn't figure out what I wanted to do.

Perhaps 80-90% of management at INEOS have a technical background, either engineering or chemistry, which is an excellent way to start as it equips them with a better understanding of a relatively specialised industry. 

Q Are you able to comment on the recent events at Grangemouth? 

A I'd like to comment. It's a shame that we couldn't find a way of sitting down and exchanging views before the strike because it would be healthier for everyone - nobody benefits from a strike. My second point would be that, like it or not, pensions have become much more expensive, and that's a function of people living much longer, people retiring earlier, and investment returns are much lower than in the past. This has made pensions very expensive. We have to be able to sit down with a population that's working for us and talk about how to provide a good pension that we can afford long term. There's no point in offering a pension which will make the business non-competitive.

Q Can the UK stay competitive?

A Yes, as long as the combination of how much people pay themselves and their level of productivity is sensible there's no reason why not. However, China and India have been liberated, their wage rates are considerably lower and they're pretty smart people. It never gets easier in the world of chemicals. It only gets harder. Each year you need to find ways to be better than the previous because your competitors do. 

In chemicals we've also got the Middle East to deal with and there's an immense amount of new capacity that didn't exist 25 years ago. They've got very cheap feedstock which is another component of your productivity. We've got these huge new threats, which is why we've got to think about the pensions and those types of things. 

Q Managing INEOS must be stressful at times, how do you relax?

A I tend not to stress or take problems home too often. But my primary pursuits are skiing -  heliskiing is my favourite sport, running, windsurfing and a bit of water skiing. I've also done the odd triathlon but not too seriously.