Sinopec, the Chinese state-owned petrochemical and oil major, and Swiss chemical conglomerate Ineos are reportedly on the verge of settling a patents-related dispute over acrylonitrile, an industrial chemical. According to a recent report in the Financial Times, the companies could soon find a solution as they have been in several rounds of discussions to resolve the dispute. According to the CEO of Ineos, Jim Ratcliffe, the two companies will soon find a resolution based on their good understanding and relationship.
Ineos had filed a lawsuit against Sinopec in March last year, after the latter’s subsidiary, Ningbo Engineering, allegedly breached an agreement between the two chemical giants to develop new acrylonitrile manufacturing plants without the consent of the Ineos. With Ningbo Engineering having allegedly broken this technology agreement, Ineos filed a lawsuit.
Acrylonitrile is an important chemical for a myriad of industries such as aerospace, automotive, and a variety of defense-industry-related machines and equipment. This makes acrylonitrile a high-demand chemical and one that also brings in appreciable revenue.
In its lawsuit, Ineos had claimed that the industrial chemical is a core part of its business and that with the breach of the technology agreement by Ningbo Engineering, the former could face a loss of revenue. According to Ineos, its acrylonitrile business brings in revenues to the tune of US$500 million annually. Ineos runs chemicals businesses across Europe and the U.S., and has a replacement value of US$3 billion. It employs about 5,000 people.
Ineos also said that the key value and competitive advantage of a business like it depends on the use of intellectual property, including but not limited to: Patents and trade secrets. Ratcliffe said that unless Ineos protects these pillars of its business, it will eventually meet its demise. In the backdrop of this dispute, the two companies have frozen their JV to build a Nanjing-based phenol plant.