BACKGROUND:
ICI’S presence to India dates back to 1911, when brwnner mond &co. one of the four companies that combined to form ici in uk in 1926, opened a trading office to sell alkyls and dyes in Calcutta.
In 1929 companies name was changed to Imperial chemical industry (INDIA) ltd. ICI began with manufacturing chlorine and caustic soda at Rishra, West Bengal. The site was later expanded to manufacture paints and rubber chemicals and fibers of India ltd. (CAFI) were incorporated to manufacture polyester operations in panki at Kanpur.
In the early 1970’s IcI established additional manufacturing capacity for paints at Hyderabad and in 1978, ici diversified into crop protection chemicals and pharmaceuticals at Ennore near Chennai. In 1976 a research facility was established at Thane, now known as ICI India research and technology centre. In 1984, the ici companies in Indian merged.
In 1987, ICI formed Nalco chemical ltd. With Nalco company USA with each holding 40% of the equity. In 1989 specialty chemical plant was commissioned at Thane. In 1993, the first phase of ICI India’s restructuring was completed with the disinvestment of the fibers, fertilizers and seed business.
In 1995 agrochemical business was transferred to a joint venture with Zeneca limited in UK. In1996, ICI established a joint venture called initiating explosive system India ltd. In 1997 the new paint plant and polyurethanes systems house were commissioned at Thane. In 1998 ICI acquired the nitrocellulose business of asha nitrochem industry ltd at valaspar, Gujarat.
Another paint plant was commissioned at mohali near chandigharh and the surfactants innovation centre opened at Thane. IcI also exited from its joint venture with Nalco chemical company, USA and Zeneca, UK. Plant locations are;
LOCATION PRODUCT MANUFACTURED
ROURKELA, ORRISA Bulk explosive
SINGRAUIL, MO Bulk explosive
GOMIA, BIHAR Bulk explosive
VALSAD, GUJARAT Catalysts
HYDERABAD, AP Nitrocelluse
MOHALI, CHANDIGARH Paints
ENNORE, CHENNAI Paints
BUSINESS:
ICI’s main business is of paints, specialty chemicals and materials.Paints ICI has around 35% of its turnover from paints. Of these Decorative paints contributes 55%, Auto-refinish 30%, Motors and Industrial 15%. ICI major brands in decorative paints are Terrene, Deluxe. ICI launched new products “Wasr Swear” and “Supercote Textured finish” and also expanded its colour solution to 200 outlets.Honda and Tafe.
Major brands are Duco for automotive refinish and In industrial paints segment the client list include Fiat, Daewoo, Perspex for acrylic sheets. The newly commissioned plant at Mohali has pioneered the movable mixer manufacturing technology for Refinish paints and has also developed and implemented ACS Market mix system for Autocolour in India.
Under its ICI has Permosel brand in solid and metallic colours. With the commissioning of the Chandigarh facility the total paint capacity has gone up to 6000 KL, ICI has four plans strategically located in four different regions Situated at Calcutta, Mumbai, Hyderabad and Chandigarh with the Addition of 1500 outlets. The total number of retail network hasBeen expanded to more than 6500.
Rubber Chemicals:
ICI India is a market leader in the rubber chemical in India at the new state of the art an horizontal plant set up in technical collaboration with sumita chemicals of Japan, at rishra, West Bengal. ICI manufactures a wide range of rubber chemicals acceletors, antioxidants, peptisers, retanders etc. used in wide variety of end products with around 50% consumed by tyre industry with other based products accounting for the rest. In year 2005 sales decline due to recession in automobile segment. The plant near Calcutta has been recently expanded and modernized at a cost of Rs 50 mn to manufacture products for domestic market and experts.
SURFACTANTS: (UNIQUEMA)
The division has started operating by the name of uniquema. Starting with textile auxiliaries the surfactants business has developed and diversified portfolio for supply of products of textile, cosmetic and pharmaceuticals companies, pesticides industry and general industry sector. With its manufacturing unit and research and technology centre focused on textile auxiliaries has been put up at thane near Mumbai. ICI launched 200 new products in surfactants.
Last year catalyst syntax is the new name of ICI’s expanded catalyst business formed by the merger of ICI katalca, unichema, crossfield, htc, and ICI tracerco. The manufacturing plant at Kanpur caters the supply of catalyst to the Indian customers and some of the catalyst. The Indian operations are covered under the global operations of ISO 9001 certification. The major customers are refiners and fertilizers
POLYURETHANE:
ICI India set up the polyurethane business at Ennore, Chennai with the establishment of a 1000 TPA blending operation. Subsequently the main office was moved from Ennore to Thane. The appliances, automotive, footwears, construction, furniture, CASE and eco-blinders sector offers major opportunities for the polyurethane business in India.
ICI has set up plant at Thane to enhance value addition through tailor made products.
PHARMACEUTICALS:
While the pharmaceuticals business of ICI worldwide has been hived off into another company called Zeneca. In India it still operates under ICI banners. The pharmaceutical business is amongst the fastest growing and profitable one. The business portfolio includes both human and veterinary pharmaceuticals.
In human pharmaceuticals there are three major portfolios cardiac, anesthetic and antiseptic. Most of the product being marketed is original ICI research product. ICI has a state art manufacturing plant at Ennore near Madras. In cardiac vascular main brands are tenormiu, Inderal and tetmosal. ICI India also exports to Europe and Middle East.
It also acquires the businee of nitrrocellouse business of Asha ntrochem last year. Industrial nitrocellulose finds application into auto-refinish paints, wood lacquers, printing inks, leather finish lacquers, foil coatings, artificial jewelry etc. ICI acrylics are the world’s largest acrylic company with 55% of world volumes.ICI India mainly import product from the parent and market it. For this it has tied up with GSFC.
ICI is the trading group of ICI India offering a wide variety of chemicals for import and export with the main focus on chlorine chemical and titanium dioxide. It sold up its 49%stake in Zeneca Agrochemical for Rs 194.7 mn. It receives Rs 911 mn net of its investments of Rs 76.4 as equity. It has also sold properties in Delhi and kolkatta for a total sum of Rs 840 mn.
Operational highlights for the quarter
• Ongoing trend of underlying growth, in local currencies, in most businesses
• Autonomous growth of 6 percent offset by currency headwind
• ICI integration and synergies on track
• Earnings per share of continuing operations up 6 percent
• Total net income €118 million, up €40 million
AkzoNobel today reported 6 percent autonomous growth for the first quarter
of 2008, indicating a strong underlying trend. However, this was offset by a similar negative currency impact. Operational margins of continuing operations were flat.
Although net income from continuing operations of â‚136 million was down 4 percent, earnings per share increased 6 percent, due to the share buyback programs .
The company achieved underlying growth in local currencies in most of its businesses, reaching double digit levels in emerging markets. Autonomous top line growth of 6 percent was reduced to a positive benefit of just 1 percent due to the currency translation impact.
AkzoNobel CFO Keith Nichols commented: I am pleased with the stable performance which demonstrates the strength of our transformed company. The testing environment continued in the first quarter, as expected. However, I remain confident for the remainder of the year that we will deliver on our promises of outgrowing our markets, and continuing with the successful integration of ICI .
Looking at the results in more detail, Specialty Chemicals realized strong autonomous growth of 11 percent, supported by almost all businesses. Growth at Performance Coatings was offset by currency pressure, although Marine & Protective Coatings produced another strong quarter.
There was double digit revenue growth at Decorative Paints in the emerging markets, but due to negative currency effects, total revenue was down 4 percent. The first quarter is not traditionally strong within the decorative sector. This seasonality was compounded by the poor weather conditions and an early Easter holiday.
Decorative Paints
The year began well, but adverse weather conditions in Europe and eastern Canada towards the end of the quarter resulted in a delay in market demand. Performance was strong in the emerging markets, with double digit growth in Asia and Latin America. Growth was also healthy in most Central and East European countries.
In the US, the trading environment continued to be soft. In most mature markets, the trade business performed well, while the retail segment faced weaker market conditions. Despite the significant currency impact on the top line, EBITDA and EBIT margins improved compared with the first quarter of 2007, benefiting from changes in product mix and a continuing focus on cost control.
Performance Coating
Although the achievement of 4 percent autonomous growth was encouraging, this was offset by the currency headwind of 6 percent, which was felt by all businesses. Acquisitions added 2 percent to revenue, resulting in flat total first quarter revenue. Despite the tough currency conditions, Marine & Protective Coatings delivered another strong quarter, with all activities contributing. Industrial Activities performance was impacted by currencies and the soft economic conditions in the US. EBITDA and EBIT margins were down compared with last year, mainly due to the impact of currencies.
Specialty Chemicals
It was another good quarter, with revenue up 5 percent on last year. Autonomous growth was 11 percent, indicating that most businesses have continuing high asset utilization. Higher raw material and energy prices were compensated by price increases of 7 percent. Before incidentals, EBITDA increased to €205 million (up 1 percent), while the EBITDA margin amounted to 17.1 percent, slightly below the first quarter of 2007. The Surface Chemistry, Polymer Chemicals and Chemicals Pakistan businesses in particular are operating at a clearly improved level.
Net Income
Net income from continuing operations before incidentals amounted to €136 million, down 4 percent compared with last year.
During the quarter there were incidental charges of €151 million (2007: €90 million), largely related to ICI integration costs (€84 million), and an amortization of the step-up of acquired inventories totaling €42 million. Net income including incidentals from continuing operations was €36 million (2007: €78 million).
Discontinued operations realized a net income of €82 million. Total net income for the first quarter of 2008 was €118 million, up €40 million compared with the previous year.
Cash Position and strong financial position
On January 2, 2008, ICI was acquired for a gross price of €11.5 billion, of which 5 billion related to assets and liabilities held for sale. Prior to the Henkel on sale at the beginning of April “ for cash proceeds of €4 billion “ AkzoNobel concluded a legal restructuring of National Starch.
This explains a relatively high cash and short-term borrowing position at the end of the first quarter of 2008. Invested capital increased due to the ICI acquisition and the related goodwill and intangibles of €8.1 billion. In mid-March, AkzoNobel embarked on a new €1 billion share buyback program as a first tranche of a €3 billion program. It is expected that the full €3 billion programs will be completed in approximately 12 months.
Trading conditions
Despite softer economic conditions in the mature markets and the negative impact of currencies, AkzoNobel remains confident of outgrowing its markets and at least maintaining results in line with 2007.
ICI’S presence to India dates back to 1911, when brwnner mond &co. one of the four companies that combined to form ici in uk in 1926, opened a trading office to sell alkyls and dyes in Calcutta.
In 1929 companies name was changed to Imperial chemical industry (INDIA) ltd. ICI began with manufacturing chlorine and caustic soda at Rishra, West Bengal. The site was later expanded to manufacture paints and rubber chemicals and fibers of India ltd. (CAFI) were incorporated to manufacture polyester operations in panki at Kanpur.
In the early 1970’s IcI established additional manufacturing capacity for paints at Hyderabad and in 1978, ici diversified into crop protection chemicals and pharmaceuticals at Ennore near Chennai. In 1976 a research facility was established at Thane, now known as ICI India research and technology centre. In 1984, the ici companies in Indian merged.
In 1987, ICI formed Nalco chemical ltd. With Nalco company USA with each holding 40% of the equity. In 1989 specialty chemical plant was commissioned at Thane. In 1993, the first phase of ICI India’s restructuring was completed with the disinvestment of the fibers, fertilizers and seed business.
In 1995 agrochemical business was transferred to a joint venture with Zeneca limited in UK. In1996, ICI established a joint venture called initiating explosive system India ltd. In 1997 the new paint plant and polyurethanes systems house were commissioned at Thane. In 1998 ICI acquired the nitrocellulose business of asha nitrochem industry ltd at valaspar, Gujarat.
Another paint plant was commissioned at mohali near chandigharh and the surfactants innovation centre opened at Thane. IcI also exited from its joint venture with Nalco chemical company, USA and Zeneca, UK. Plant locations are;
LOCATION PRODUCT MANUFACTURED
ROURKELA, ORRISA Bulk explosive
SINGRAUIL, MO Bulk explosive
GOMIA, BIHAR Bulk explosive
VALSAD, GUJARAT Catalysts
HYDERABAD, AP Nitrocelluse
MOHALI, CHANDIGARH Paints
ENNORE, CHENNAI Paints
BUSINESS:
ICI’s main business is of paints, specialty chemicals and materials.Paints ICI has around 35% of its turnover from paints. Of these Decorative paints contributes 55%, Auto-refinish 30%, Motors and Industrial 15%. ICI major brands in decorative paints are Terrene, Deluxe. ICI launched new products “Wasr Swear” and “Supercote Textured finish” and also expanded its colour solution to 200 outlets.Honda and Tafe.
Major brands are Duco for automotive refinish and In industrial paints segment the client list include Fiat, Daewoo, Perspex for acrylic sheets. The newly commissioned plant at Mohali has pioneered the movable mixer manufacturing technology for Refinish paints and has also developed and implemented ACS Market mix system for Autocolour in India.
Under its ICI has Permosel brand in solid and metallic colours. With the commissioning of the Chandigarh facility the total paint capacity has gone up to 6000 KL, ICI has four plans strategically located in four different regions Situated at Calcutta, Mumbai, Hyderabad and Chandigarh with the Addition of 1500 outlets. The total number of retail network hasBeen expanded to more than 6500.
Rubber Chemicals:
ICI India is a market leader in the rubber chemical in India at the new state of the art an horizontal plant set up in technical collaboration with sumita chemicals of Japan, at rishra, West Bengal. ICI manufactures a wide range of rubber chemicals acceletors, antioxidants, peptisers, retanders etc. used in wide variety of end products with around 50% consumed by tyre industry with other based products accounting for the rest. In year 2005 sales decline due to recession in automobile segment. The plant near Calcutta has been recently expanded and modernized at a cost of Rs 50 mn to manufacture products for domestic market and experts.
SURFACTANTS: (UNIQUEMA)
The division has started operating by the name of uniquema. Starting with textile auxiliaries the surfactants business has developed and diversified portfolio for supply of products of textile, cosmetic and pharmaceuticals companies, pesticides industry and general industry sector. With its manufacturing unit and research and technology centre focused on textile auxiliaries has been put up at thane near Mumbai. ICI launched 200 new products in surfactants.
Last year catalyst syntax is the new name of ICI’s expanded catalyst business formed by the merger of ICI katalca, unichema, crossfield, htc, and ICI tracerco. The manufacturing plant at Kanpur caters the supply of catalyst to the Indian customers and some of the catalyst. The Indian operations are covered under the global operations of ISO 9001 certification. The major customers are refiners and fertilizers
POLYURETHANE:
ICI India set up the polyurethane business at Ennore, Chennai with the establishment of a 1000 TPA blending operation. Subsequently the main office was moved from Ennore to Thane. The appliances, automotive, footwears, construction, furniture, CASE and eco-blinders sector offers major opportunities for the polyurethane business in India.
ICI has set up plant at Thane to enhance value addition through tailor made products.
PHARMACEUTICALS:
While the pharmaceuticals business of ICI worldwide has been hived off into another company called Zeneca. In India it still operates under ICI banners. The pharmaceutical business is amongst the fastest growing and profitable one. The business portfolio includes both human and veterinary pharmaceuticals.
In human pharmaceuticals there are three major portfolios cardiac, anesthetic and antiseptic. Most of the product being marketed is original ICI research product. ICI has a state art manufacturing plant at Ennore near Madras. In cardiac vascular main brands are tenormiu, Inderal and tetmosal. ICI India also exports to Europe and Middle East.
It also acquires the businee of nitrrocellouse business of Asha ntrochem last year. Industrial nitrocellulose finds application into auto-refinish paints, wood lacquers, printing inks, leather finish lacquers, foil coatings, artificial jewelry etc. ICI acrylics are the world’s largest acrylic company with 55% of world volumes.ICI India mainly import product from the parent and market it. For this it has tied up with GSFC.
ICI is the trading group of ICI India offering a wide variety of chemicals for import and export with the main focus on chlorine chemical and titanium dioxide. It sold up its 49%stake in Zeneca Agrochemical for Rs 194.7 mn. It receives Rs 911 mn net of its investments of Rs 76.4 as equity. It has also sold properties in Delhi and kolkatta for a total sum of Rs 840 mn.
Operational highlights for the quarter
• Ongoing trend of underlying growth, in local currencies, in most businesses
• Autonomous growth of 6 percent offset by currency headwind
• ICI integration and synergies on track
• Earnings per share of continuing operations up 6 percent
• Total net income €118 million, up €40 million
AkzoNobel today reported 6 percent autonomous growth for the first quarter
of 2008, indicating a strong underlying trend. However, this was offset by a similar negative currency impact. Operational margins of continuing operations were flat.
Although net income from continuing operations of â‚136 million was down 4 percent, earnings per share increased 6 percent, due to the share buyback programs .
The company achieved underlying growth in local currencies in most of its businesses, reaching double digit levels in emerging markets. Autonomous top line growth of 6 percent was reduced to a positive benefit of just 1 percent due to the currency translation impact.
AkzoNobel CFO Keith Nichols commented: I am pleased with the stable performance which demonstrates the strength of our transformed company. The testing environment continued in the first quarter, as expected. However, I remain confident for the remainder of the year that we will deliver on our promises of outgrowing our markets, and continuing with the successful integration of ICI .
Looking at the results in more detail, Specialty Chemicals realized strong autonomous growth of 11 percent, supported by almost all businesses. Growth at Performance Coatings was offset by currency pressure, although Marine & Protective Coatings produced another strong quarter.
There was double digit revenue growth at Decorative Paints in the emerging markets, but due to negative currency effects, total revenue was down 4 percent. The first quarter is not traditionally strong within the decorative sector. This seasonality was compounded by the poor weather conditions and an early Easter holiday.
Decorative Paints
The year began well, but adverse weather conditions in Europe and eastern Canada towards the end of the quarter resulted in a delay in market demand. Performance was strong in the emerging markets, with double digit growth in Asia and Latin America. Growth was also healthy in most Central and East European countries.
In the US, the trading environment continued to be soft. In most mature markets, the trade business performed well, while the retail segment faced weaker market conditions. Despite the significant currency impact on the top line, EBITDA and EBIT margins improved compared with the first quarter of 2007, benefiting from changes in product mix and a continuing focus on cost control.
Performance Coating
Although the achievement of 4 percent autonomous growth was encouraging, this was offset by the currency headwind of 6 percent, which was felt by all businesses. Acquisitions added 2 percent to revenue, resulting in flat total first quarter revenue. Despite the tough currency conditions, Marine & Protective Coatings delivered another strong quarter, with all activities contributing. Industrial Activities performance was impacted by currencies and the soft economic conditions in the US. EBITDA and EBIT margins were down compared with last year, mainly due to the impact of currencies.
Specialty Chemicals
It was another good quarter, with revenue up 5 percent on last year. Autonomous growth was 11 percent, indicating that most businesses have continuing high asset utilization. Higher raw material and energy prices were compensated by price increases of 7 percent. Before incidentals, EBITDA increased to €205 million (up 1 percent), while the EBITDA margin amounted to 17.1 percent, slightly below the first quarter of 2007. The Surface Chemistry, Polymer Chemicals and Chemicals Pakistan businesses in particular are operating at a clearly improved level.
Net Income
Net income from continuing operations before incidentals amounted to €136 million, down 4 percent compared with last year.
During the quarter there were incidental charges of €151 million (2007: €90 million), largely related to ICI integration costs (€84 million), and an amortization of the step-up of acquired inventories totaling €42 million. Net income including incidentals from continuing operations was €36 million (2007: €78 million).
Discontinued operations realized a net income of €82 million. Total net income for the first quarter of 2008 was €118 million, up €40 million compared with the previous year.
Cash Position and strong financial position
On January 2, 2008, ICI was acquired for a gross price of €11.5 billion, of which 5 billion related to assets and liabilities held for sale. Prior to the Henkel on sale at the beginning of April “ for cash proceeds of €4 billion “ AkzoNobel concluded a legal restructuring of National Starch.
This explains a relatively high cash and short-term borrowing position at the end of the first quarter of 2008. Invested capital increased due to the ICI acquisition and the related goodwill and intangibles of €8.1 billion. In mid-March, AkzoNobel embarked on a new €1 billion share buyback program as a first tranche of a €3 billion program. It is expected that the full €3 billion programs will be completed in approximately 12 months.
Trading conditions
Despite softer economic conditions in the mature markets and the negative impact of currencies, AkzoNobel remains confident of outgrowing its markets and at least maintaining results in line with 2007.