Posted for Asher Mullard

The world’s third largest chemical company is the latest victim of the credit crisis.

Ineos, founded only 10 years ago, is the biggest privately owned company in Britain, producing over 50 billion tonnes of chemicals a year for an annual profit revenue of £30bn. Until now, Ineos has thrived by borrowing money from bankers — and therefore not depending on public shareholders — to buy up floundering companies.

Given the current financial crisis, however, it looks like Ineos may need a new strategy. Ineos announced today that their plans to build a £65 million biodiesel plant in Grangemouth, Scotland, will be put on hold indefinitely. According to the BBC, “the current economic slowdown had rendered the project unviable”.

Plans for three other plants — in Germany, France and Belgium — have also been shelved.

This news follows an announcement 2 weeks ago that Ineos is trying to renegotiate the terms of £5.9bn of debt.

“The company is too leveraged,” one loan trader told the Daily Telegraph.

And Jochen Schlachter, analyst at UniCredit, told the paper, “The downturn in the chemicals cycle is just beginning.”

Ineos is not alone in feeling the financial pressure, however. A third of German branded-drug makers plan to reduce their workforces in 2009.