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Innovene finds its home base
Petrochemical firm's chief executive says state grants weren't the main attraction

By Robert Manor
Tribune staff reporter
Published April 16, 2005


Meet Innovene, a giant Chicago-based company so new that its chief executive officer hasn't gotten his business cards.

Last year, oil giant BP PLC announced it would spin off its chemicals business, which had gross revenue of $15 billion.

The company, now christened Innovene, set off to find a city for its global headquarters.

Houston, one of the world's great centers for petrochemicals, and Chicago, not one of the world's great centers for petrochemicals, were the front-runners.

Innovene CEO Ralph Alexander has lived in Houston, still owns a house there and has family there as well.

"I love the place," he said.

So he chose Chicago.

"People we recruited wanted to come to Chicago," Alexander said Friday. He said many of his staff had previously lived in the city and wanted to return.

It didn't hurt that Chicago is much more of an international center for business than Houston, he said. Innovene's 8,500 employees are scattered over North America, Europe and Asia, and the company is the largest industrial employer in Scotland.

"Our company is global," Alexander said. "It is important for us to be in a city that is global."

Alexander, 50, said he likes the energy of Chicago. He said he was impressed by the way business and government pulled together to build Millennium Park. He said he and his wife, so new to the city that they are still looking for a home, plan to live downtown, in part because there are so many things to do there.

Innovene is a Fortune 150 company, the kind that governors shower with subsidies and tax breaks to attract. In Innovene's case, Gov. Rod Blagojevich offered $1.3 million in grants.

As corporate welfare goes, that is more than a bagel with cream cheese but far less than significant.

"The decision to come to Chicago had nothing to do with subsidies," Alexander said. "The money was not material."

In a way, Innovene is coming home.

Corporate parent BP bought Chicago-based Amoco in 1998, and the towering Amoco building eventually was renamed Aon Center.

Innovene's global headquarters are on the 25th floor of the Aon Center. Alexander's office faces south, with a panoramic view of the Michigan Avenue streetwall, Millennium Park and the lake.

The choice of the old Amoco building was not sentimental.

Alexander said BP acquired long-term leases in the building when it bought Amoco. That means Innovene could get the space on the cheap.

Seeks to become a brand name

Innovene processes petroleum and natural gas into substances with names like acrylonitrile, polypropylene and polyalphaolefins--in other words, plastics and its precursors.

The company's products end up in DVD cases, auto parts, carpet fabric, dry-cleaning bags, rifle stocks, disposable syringes and a universe of other items made of plastic.

Innovene is likely to issue an initial public offering of stock this year, and Securities and Exchange Commission rules prevent executives from talking about some aspects of the company.

But Alexander allows that the $1.5 trillion industry is healthy, with demand for the products of Innovene and similar companies rising faster than the world's economy. Innovene, for example, is opening a $2.7 billion production facility outside of Shanghai.

Oil and natural gas are the raw materials of Innovene, and the current high prices sting. But the company also operates oil refineries in France and Scotland, and refineries tend to do well when prices are high.

Although Innovene will never be a household name, Alexander's goal is for it to become a brand name in the industry.

And he offers an anecdote to illustrate the reach of his business.

"One out of four athletes in the world use a product we made," he said.

- - -

New company

Name: Innovene

Global headquarters: Aon Center, 200 E. Randolph St., Chicago

Size: A Fortune 150 company

Revenues: $15 billion

Employees: 8,500
 
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