ICI plans value-adding acquisitions - chairman

23 May 2007 13:23  [Source: ICIS news]

LONDON (ICIS news)--ICI plans to make value-adding acquisitions to grow sales and profits for its remaining businesses, the UK-based coatings company’s chairman said on Wednesday.

“Using the strength and flexibility of our balance sheet, we intend to make sensible and value-adding acquisitions in our existing sectors to enhance our businesses’ positions in terms of their products and technology or their geographic reach,” Peter Ellwood said in a speech at ICI’s annual general meeting.

“We will not rush to buy. We will not overpay. We will only buy where we believe we can create value. We are committed to increasing both our top-line sales and our bottom-line profits, and we aim to achieve this through both organic and acquisition growth,” he added.

ICI disposed of its Uniqema and Quest businesses in 2006, leaving the company with four business units; Paints; Adhesives; Polymers; and Starch.

The Uniqema sale to Croda raised £410m ($814m/€604m), while Quest was sold to Givaudan for £1.2bn.

Over the 15-month period from January 2006 to the end of March this year, net debt has been reduced by some £1bn. During the same period, the company halved its overall pension fund deficit to around £840m.

“Our focus has widened from just bottom-line cost-efficiency to include making all our business processes operate more effectively, and we are committed to achieving £170m of savings each year by 2011 from an investment of £340m,” said Ellwood.

Commenting on market rumours that Dutch rival Akzo Nobel is planning a bid for the company, Ellwood said the board would continue to drive for continued performance improvement and not be distracted by speculation and market gossip.

“Our energies, our focus and our commitment continue to be on those levers that we can control,” he said.

($1 = £0.50/€1 = £0.68)

By: Hilde Ovrebekk
+44 20 8652 3214

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