Switzerland-headquartered Ineos, the fourth largest chemical company in the world, is taking legal action in China against a number of Sinopec subsidiaries for breach of contract and/or misuse of trade secrets in its patented acrylonitrile feedstock technology.

Ineos prides on its acrylonitrile business, which it states is world number one, generating up to US$500 million/year of profit and is valued at US$3 billion, employing 5,000 people worldwide. It says that the prolific building of acrylonitrile copy plants in China will destroy its business.

Chairman Jim Ratcliffe stated, “We want to take our best technology to China but we need to know that it will be protected.” He goes on to say that company has “no option but to defend our hard won intellectual property.”

Ineos says that Sinopec Ningbo Engineering Company has broken a long established technology agreement which, together with trade secret misuse by other Sinopec companies, has enabled development of a series of new world-scale acrylonitrile plants without Ineos agreement or consent.

The firm, which says that it has “an otherwise excellent relationship with Sinopec and with China”, is pursuing parallel actions in the Beijing High Court and through arbitration in Sweden. It adds that it has “every confidence that China has now developed an excellent system to protect intellectual property consistent with the fact that China now files more patents than any other country.”

Jim Ratcliffe adds, “We have good and valuable relationships with Sinopec and other Chinese companies across our business. But in this case, we have to take action to protect the interests of our stakeholders. The fundamental value of a business like Ineos depends on its intellectual property, which includes trade secrets and patents, covering technology, design and operations. Unless we protect our intellectual property, ultimately we will see the demise of Ineos.”

Acrylonitrile is a key building block for carbon fibre, which is used in highly engineered products in the automotive, aerospace and defence industries. The new Boeing 787 Dreamliner relies on acrylonitrile-based carbon fibre for its construction. In addition, acrylonitrile is a key ingredient in ABS polymer, used in many everyday applications from children’s toys and computer monitors to white goods. It is the key ingredient in acrylic fibre and by products from the process are essential in a wide range of uses from pharmaceuticals to gold extraction.

Ineos has had a long standing agreement with SNEC (a Sinopec company) for the licensing and use of acrylonitrile technology in China dating back to 1984. Ineos says it currently has plans to jointly build a phenol plant with Sinopec and an acrylonitrile plant with Tianjin Bohai.

The firm also produces acrylonitrile at four major sites around the world: Green Lake, Texas; Lima, Ohio; Seal Sands, UK; and Cologne, Germany. The firm’s acrylonitrile technology provides the basis for over 90% of the world’s production. The technology was developed and patented in the US and is still developed and improved by Ineos US at its technology centre in Lisle, Illinois.