ICIPaints.com Archive
Paints now accounts for 50% of ICI Turnover
July 2007
ICI Chief Executive Dr. John McAdam told the company's recent AGM that both the Paints business and National Starch achieved a record level of profitability.
"if we look at the sales split going forward for our continuing operations,the Paints business will account for around 50% of ongoing turnover, Adhesives, 22%, Starches, 10%, Specialty Polymers 5% and Electronic materials 4%. Our regional and industrial activities will be 9%." Said Dr. McAdam
"We now have a more coherent portfolio made up of businesses which are amongst the leaders in their markets. And they have potential for development through further investment in efficiencies and through selected acquisitions, combined with better leverage of Group-wide scale and capabilities." He added
The AGM heard the paints business in the UK & Ireland, Latin America and Asia also performed strongly, generally gaining market share and strengthening distribution. Paints Continental Europe saw significant improvements in the fourth quarter, and this continued into the first quarter of this year, helped by benign weather conditions.
"Our biggest disappointment for 2006 was the performance of the North America Paints business, which continues to suffer from some very adverse trading conditions in the USA, where a dramatically weaker new housing market and a lower level of house moves has had a severe impact on demand." Dr. McAdam said.
"Mainly, as a result of this, the business has underperformed against our expectations but it has also failed to achieve the performance levels of the best of our competitors.
"Consequently a number of major initiatives to address this under-performance have already begun in our North American business, including an injection of new management. In addition, the restructuring programme announced last year will lead to significant improvements. While there are no material signs of strengthening market conditions at this time, the actions we are taking now should not only reduce the costs of doing business in the short term, but also contribute to an improved performance when demand picks up. Quarter one results already show the benefit of these recent changes, with efficiencies helping to hold the bottom line steady despite a 4% decline in sales volumes."
