ICI begins to see the benefits of changes
29 Mar 2000
Record profits from speciality chemicals helped radically-reshaped British chemicals giant ICI to beat the market's expectations and post a 17 per cent increase in year-end profits to £376million, with sales rising by 2.5 per cent to £5.6billion. Chief executive Brendan O'Neill said that this figure should be stable, as the company's new form is far less susceptible to cyclical swings.
Most of the improvement came in the final quarter of the year, with the National Starch, Quest and Uniqema subsidiaries all posting profit increases. Paints also had a good year, with strong growth in the US following widespread restructuring and a record year in the UK. Industrial chemicals remained in the red, however, with tough trading conditions and the strong pound hitting the chlor-chemicals and Pakistani PTA businesses. The Klea business, which deals in CFC replacements, moved into profit in the second half of the year, however.
The restructuring is still not over, with O'Neill planning further streamlining of ICI's supply chain and more cost cutting. Further disposals are also on the cards, with chlor-chemicals and PTA next on the selling block. This should help to cut the company's net debt further - it fell from £4.5billion last April to £2.3billion at year-end.
* Litigation in the US over lead in paint should not hit ICI's Glidden business in the US, O'Neill said. The company is facing nine lawsuits over this issue, but O'Neill expects the case to go against the plaintiffs. `The industry acted voluntarily to address this issue 20 years before the US introduced legislation in the 1970s and has not sold the product for residential use for decades,' he said. `The Glidden Company, along with a number of other companies, has successfully defended itself over 100 times in the last 12 years. Over this period it has not lost a single case, not paid a single cent in settlements.'
