This excerpt taken from the ICI 6-K filed Mar 14, 2006.
Areas of strategic focus
Asia remains an important area of development for ICI as we look to build on the strong positions of our growth businesses in the region. During 2005, comparable sales growth from ICIs International Businesses in Asia was 11%, with National Starch, Quest and ICI Paints all delivering good growth. National Starch opened a new technical and manufacturing centre in China for electronic materials and we began implementing plans for new paints facilities in China and Vietnam. As a result of our strong growth across the region in recent years, Asia now represents 24% of Group sales. ICIs businesses in Latin America also delivered good growth in sales and profits as the region continued to benefit from economic recovery. Performance in North America was also good, with sales growth led by price increases and modest volume growth in most businesses. ICIs activities in Europe delivered a robust performance in generally weak trading conditions.
Our strategy focuses on actively managing our portfolio in different ways to create shareholder value. Sales, capital expenditure, head count and profitability all increased in our targeted growth activities. At the same time, ICI continued to achieve improvements in cost and capital effectiveness. As a result of this strategic focus we completed the sale of Vinamul Polymers in February, and made the modest acquisition of the Celanese redispersible powder polymers business in September.
We have also made good progress towards completing the restructuring activities launched in 2003. Cumulative savings from that programme reached £106m out of an increased target of £140m increased by £13m because we under-spent to achieve our original targets and have redeployed the resources to secure additional savings. Since the programmes initiation, headcount has reduced by 2,100.
Improved profitable sales growth is driven by technological innovation, and ICI has maintained a satisfactory level of investment in R&D, the long-term benefit of which is seen in new product launches. One of the most exciting has been the launch of Quests ImpaQ Taste Technology platform, a new range of flavour molecules that should significantly reduce salt, sugar and fat content without reducing flavour impact in food products where it is used, for example in ice creams or snack foods. National Starch also launched an innovative new printable adhesive developed for the latest faster, more compact electronics applications. This technology increases product reliability and reduces assembly costs, creating significant savings for our customers.
Sustainability has also seen significant developments with the end of ICIs Challenge 2005 programme and the launch of the new Challenge 2010 targets. More details are available on our website (www.ici.com/sustainability). Managing sustainable development remains at the heart of the way we operate, and the Group has established itself as a leader in its industry, reflected in its membership of the Dow Jones Sustainability Index for a second successive year as well as being a member of the FTSE4 Good Index.