ONE of INEOS’ smallest businesses is starting to flex its financial muscles in a big way. INEOS Enterprises has, in just over a year, doubled its turnover to over $3 billion a year.
CEO Ashley Reed said the decision to sell two of its businesses - and acquire three others - had been transformational.
“We still cannot quite believe that it has happened,” he said. “And we have almost trebled in size.”
INEOS Enterprises is made up of a number of small and diverse businesses. Last year it sold INEOS ChloroToluenes and INEOS Baleycourt to Valtris specialty chemicals. But it bought three others. The deal with Flint Hills Resources, for its chemical intermediates business, was completed just before Christmas. The other two are expected to be finalised this year.
Ashley said INEOS Enterprises saw potential for growth in all three. “We didn’t go deliberately looking for these businesses,” he said. “But we could see ways of improving them.”
It is a tried and tested formula. INEOS has built its fortune by buying unloved assets – and transforming them into reliable, productive and profitable companies. The Flint Hills business, which makes purified isophthalic acid, trimellitic anhydride and maleic anhydride at its production facility in Joliet, Illinois, has been renamed INEOS Joliet.
The business, which also has offices and distribution centres in America, Europe and Asia, sells its products throughout the world to others who use them to help make clothing, paints and gasoline additives. The deal to acquire Ashland’s entire composites business is expected to be approved soon.
INEOS agreed to pay $1.1 billion in November for 20 manufacturing sites in Europe, North and South America, Asia and the Middle East, which employ 1,300 people. Ashland’s resins are light, strong and fire resistant and, as such, have been favoured by the world’s boat builders for 30 years.
The composites are also increasingly replacing the aluminium or steel frameworks in cars because they are lighter. That, in turn, saves on fuel and increases efficiency.
INEOS Enterprises is also hoping to finalise the deal with Tronox for two American plants which manufacture titanium dioxide, a substance used in suncream, cosmetics, toothpaste, paints as well as soap, food colourings and textiles.
“It makes things white and it is very good at it,” said Ashley.