Sir Jim Ratcliffe, the co-owner of Manchester United and head of Ineos, one of Europe’s largest chemical producers, has staged an “11th-hour intervention” in an effort to “save” the chemical industry.
Sir Jim has called on European legislators to reduce price pressures on chemical businesses, or there “won’t be a chemical industry left to save”.
“There’s, in my view, not a great deal of time left before we see a catastrophic decline in the chemical industry in Europe”, he said.
The “biggest problem” facing businesses is gas and electricity costs, with the EU needing to be “more reactive” on tariffs to protect competition, Sir Jim added.
Prices should be eased on chemical companies by reducing taxes, regulatory burdens, and bringing back free polluting permits, the Ineos chairman and chief executive said.
It comes as his company, Europe’s biggest producer of some chemicals and one of the world’s largest chemical firms, announced the loss of 60 jobs at its acetyls factory in Hull earlier this week.
Cheap imports from China were said to be behind the closure, as international competition facing lower costs has hit the sector.
What could happen?
Now is a “moment of reckoning” for Europe’s chemicals industry, which is “at a tipping point and can only be saved through urgent action”, Sir Jim said.
European chemical sector output declined significantly due to reduced price competitiveness from high energy and regulatory costs, according to research funded by Ineos and carried out by economic advisory firm Oxford Economics.
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The report said the continent’s policymakers face a “critical” decision between acting now to safeguard “this vital strategic industry or risk its irreversible decline”.
As many as 1.2 million people are directly employed by chemical businesses, with millions more supported in the supply chain and through staff spending wages, the Oxford Economics report read.
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Average investment by European chemical firms was half that of US counterparts (1.5%, compared to 3%), a trend which is projected to continue, the report added.
