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This excerpt taken from the ICI 6-K filed Mar 21, 2007. Capital expenditure The analysis in the tables below summarises the Group’s capital expenditure on property, plant and equipment and intangible assets over the two-year period ended 31 December 2006. Capital additions on the balance sheet of £156m for 2006 were £2m below 2005 and represented 104% of depreciation, excluding non-cash asset write-downs related to restructuring (2005 94%). In 2006, capital expenditure was incurred on a large number of relatively minor projects undertaken with the intention of maintaining existing and developing additional production capacity as well as delivering further productivity improvements. Investment was also made in additional stores capacity for Paints, manufacturing capacity for resins and other polymers in China and a second Paints plant in Vietnam. Capital expenditure in support of the 2006 transformation programme amounted to £5m in the year. Commitments for capital expenditure not provided in the Group’s consolidated financial statements totalled £115m at 31 December 2006 (2005 £100m). These commitments for capital expenditure are analysed further in note 33 relating to the Group accounts between those for which contracts have been placed and those authorised but not yet contracted. This excerpt taken from the ICI 20-F filed Mar 31, 2006. Capital expenditure
The analysis in the table above summarises the Group’s capital expenditure on property, plant and equipment and intangible assets over the two-year period ending 31 December 2005. Capital expenditure of £158m for 2005 was £2m below 2004. In 2005, capital expenditure was incurred on a large number of relatively minor projects aimed at achieving additional capacity, as well as for productivity improvements through increased automation of manufacturing processes and the relocation and consolidation of facilities. ICI also continued to invest preferentially in its “grow aggressively” businesses with National Starch opening a new technical and manufacturing centre in China and Paints starting two new manufacturing projects in China and Vietnam. Commitments for capital expenditure not provided in the Group’s consolidated financial statements totalled £100m at 31 December 2005 (2004 £123m). These are analysed further in note 32 relating to the Group accounts between those for which contracts have been placed and those authorised, but not yet contracted.
This excerpt taken from the ICI 6-K filed Mar 14, 2006. Capital expenditure
The analysis in the table above summarises the Group’s capital expenditure on property, plant and equipment and intangible assets over the two-year period ending 31 December 2005. Capital expenditure of £158m for 2005 was £2m below 2004. In 2005, capital expenditure was incurred on a large number of relatively minor projects aimed at achieving additional capacity, as well as for productivity improvements through increased automation of manufacturing processes and the relocation and consolidation of facilities. ICI also continued to invest preferentially in its “grow aggressively” businesses with National Starch opening a new technical and manufacturing centre in China and Paints starting two new manufacturing projects in China and Vietnam. Commitments for capital expenditure not provided in the Group’s consolidated financial statements totalled £100m at 31 December 2005 (2004 £123m). These are analysed further in note 32 relating to the Group accounts between those for which contracts have been placed and those authorised, but not yet contracted.
Market trends and sensitivities There are underlying trends in these different markets that the Group believes make them attractive for its businesses, but similarly there are associated risks to growth expectations should the relative rates of growth change materially. ICI’s exposure to these markets is set out in the strategic review and the individual strategies of its businesses are explained in their descriptions starting on page 9. The following comments provide more detail on the trends that the Group believes will benefit long-term growth as well as some of the sensitivities that may affect performance relative to these trends. More detail on these and other risk factors can be found on page 149. These comments should also be reviewed in conjunction with the forward-looking statements disclosure on page 159 of the report and accounts. Asia Pacific: ICI has a well-established position in Asia, particularly ICI Paints, National Starch and Quest. Their products are sold into growth segments of local economies. ICI’s businesses in Asia are well placed to benefit from the expected GDP growth in these economies. In addition, our major international customers are investing in capacity to service domestic and export markets. Growth estimates remain strong for the region and one or two countries in particular. Recent figures supplied by Oxford Economic Forecasts indicate average growth in the region of 3.6% for 2006, with China growing 8.6% and India 7.7% . ICI’s “grow aggressively” businesses are to a large extent dependent on the successful development of these economies and should the economic outlook change this would impact favourably or unfavourably the Group’s rates of growth. Healthy eating: Several of ICI’s businesses (National Starch’s Starch operations and Quest’s Flavours division in particular) are currently benefiting from the trend towards healthier eating. In general, processed foods have historically had higher levels of fat, salt, sugar and other carbohydrates to overcome issues with cooking cycles, storage and taste. The development of resistant starches and flavour molecules that can substitute the culinary impact of fat, salt and sugar creates a range of market opportunities, driven mainly by consumers’ preferences for convenience, but also for a healthier product. Changes in these trends could impact, favourably or unfavourably, upon the performance of ICI’s businesses. Electronic materials: National Starch manufactures a range of high performance adhesives and protective coatings for the electronics industry. The trend towards miniaturisation and more powerful electronic devices has historically contributed to greater demands on the technical capability and value of ICI’s products, as well as driving higher volumes. As a result the business has grown successfully. ICI believes that the electronics market, whilst likely to remain more cyclical than most, will continue to grow and present National Starch with sustained opportunities to introduce new technologies. Against this backdrop, individual market cycles may have a short-term impact on the business. Other markets to which ICI has a large exposure or other factors which ICI believes can influence its performance are described below, together with ICI’s views on the underlying trends and sensitivities. Western European and North American markets for fast moving consumer goods products and construction materials: ICI’s businesses manufacture and sell a wide range of products used in the home or construction industries. ICI’s performance in these markets is linked to underlying GDP growth, consumer spending and other market-specific trends.
Oil prices and raw material costs: ICI is exposed to changes in the relationship between supply and demand for key materials. For example, the cost of acrylates (used by both National Starch and Paints) increased rapidly during 2005. Higher oil costs impact the petrochemical raw materials bought by the Group. More details on the types of raw materials bought by ICI are included on page 19 of the annual report and accounts. ICI was able to pass on these raw material cost increases during 2005. Energy costs: Approximately 65% of ICI’s businesses by sales value manufacture their products using mixing or compounding operations, rather than capital intensive, energy intensive processes, for example, paints, adhesives, electronic materials, flavours and fragrances. 35% are capital and energy intensive processes – Uniqema, the starch manufacturing facilities of National Starch and the Regional and Industrial activities in Pakistan and Argentina. These businesses have some exposure to energy price fluctuations; for example, National Starch’s starch operation suffered from significant increases in natural gas prices during 2005. PTA to paraxylene (PX) differential margin: the profitability of the Regional and Industrial business in Pakistan is significantly affected by the market price differential between PTA selling prices and the cost of the key PTA feedstock, paraxylene.
This excerpt taken from the ICI 20-F filed Apr 1, 2005. Capital expenditure The analysis in the table above summarise the Group’s capital expenditure on tangible fixed assets over the three year period ending 31 December 2004. Capital expenditure of £160m for 2004 was £6m above 2003, and included investments in a new starch manufacturing facility in China and in support of the restructuring programme. In 2004, capital expenditure was incurred on a large number of relatively minor projects aimed at achieving additional capacity, as well as for productivity improvements through increased automation of manufacturing processes and the relocation and consolidation of facilities. Commitments for capital expenditure not provided in the Group’s consolidated financial statements totalled £123m at 31 December 2004 (2003 £132m). These are analysed further in note 39 to the consolidated financial statements between those for which contracts have been placed and those authorised but not yet contracted.
ICI ANNUAL REPORT AND ACCOUNTS 2004
This excerpt taken from the ICI 6-K filed Mar 16, 2005. Capital expenditure The analysis in the table above summarise the Group’s capital expenditure on tangible fixed assets over the three year period ending 31 December 2004. Capital expenditure of £160m for 2004 was £6m above 2003, and included investments in a new starch manufacturing facility in China and in support of the restructuring programme. In 2004, capital expenditure was incurred on a large number of relatively minor projects aimed at achieving additional capacity, as well as for productivity improvements through increased automation of manufacturing processes and the relocation and consolidation of facilities. Commitments for capital expenditure not provided in the Group’s consolidated financial statements totalled £123m at 31 December 2004 (2003 £132m). These are analysed further in note 39 to the consolidated financial statements between those for which contracts have been placed and those authorised but not yet contracted.
ICI ANNUAL REPORT AND ACCOUNTS 2004
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