Imperial Chemical Industries (ICI)

new manufacturing projects in China and Vietnam. In addition, many new and innovative products were launched by the businesses in 2005. These included ‘ImpaQ Taste Technology’, a range of flavour molecules launched by Quest to replace high levels of salt, fat and sugar in processed foods, and a new printable adhesive, launched by National Starch’s Ablestik operation, for use in the latest faster, more compact electronics applications.

Regionally, ICI maintained its good progress developing its “grow aggressively” activities in Asia. Across all the strategic quadrants, comparable sales grew 11% in the region. ICI Paints, in particular, made good progress in the key developing economies with comparable growth of 17% for the year. As a result, sales reported in Asia were 24% (2004 22%) of the Group total.

At the same time as investing in “grow” businesses ICI maintained its focus on restructuring activities. Cumulative savings from the programme launched in 2003 reached £106m out of an increased target of £140m. Since the start of the programme ICI has removed 2,100 job positions from its businesses.

In February 2005, ICI completed the sale of the Vinamul Polymers business. Other small divestments included Zweihorn, a specialty woodcare business in Germany, 51% of ICI India’s rubber chemicals business to a joint venture company established in partnership with PMC Group International of the USA, and ICI’s interest in Pielcolor Uruguay SA, a manufacturer of chemicals for leather stains. In total, these generated net disposal proceeds of £108m.

In September, ICI acquired the redispersible powder polymers business from Celanese for £15m. This acquisition should enhance the growth opportunities of National Starch’s specialty polymers activities through expanding its product range, increasing its customer footprint and providing additional manufacturing capacity.

Uniqema
In February 2006, ICI announced that it was evaluating its options with regard to Uniqema. ICI believes that Uniqema is a market leading oleochemicals and derivatives business with a good product portfolio and a strong management team. The restructuring programme announced in 2003 has generated significant savings, resulting in improved profitability. The Uniqema team has identified a range of further restructuring opportunities that could further improve overall profitability, but which would require significant additional investment. In this context, and in the light of other investment opportunities available to ICI across the Group, in particular in those areas where there is the prospect of greater strategic and financial returns, ICI is evaluating its options, with a view to divesting the business, subject to a deal realising value for shareholders.