05 February 1998 14:59 [Source: ICIS news]
LONDON (CNI)--ICI's strategic refocusing towards speciality chemicals means it will be less exposed to the effects of Asia's financial crisis, the group's chief financial officer Alan Spall said Thursday.
At a press conference here to announce ICI's 1997 financial results, Spall said that ICI's Q4 1997 results in the paints and speciality chemicals businesses would take a £10m hit from the Asian crisis.
"GDP in 1998 in the US and Europe is bound to be impacted by what is happening," he said. "But, we still expect the world to grow, albeit at a lower level than last year."
ICI's repositioning has meant that some 12% of the group's business is derived from sales to the Asia Pacific region, compared to 25% in 1996. Spall said that the switch from bulk to speciality businesses had made ICI "much more resilient".
"ICI is certainly better positioned to work through the storm than it would have been had we not dramatically changed our portfolio."
Spall said that the news was not all bad. For instance, National Starch purchased raw materials and manufactured tapioca-based starch locally but sold in US dollars to global or export-orientated customers. It benefited from supplying local customers whose competitive position was improved by devaluation.
Spall said there were some "concerns" in paints but volumes in the region were still up 10% in Q4. Asked if ICI was taking the opportunity to expand its Asian presence, chief executive Charles Miller Smith said opportunities had emerged in the last three months that would not have existed 12 months ago.
"We have been approached like other people - we have to look and see if these are the right businesses for ICI."
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