ICI India to reshape portfolio
23 July 1999
ICI India will reshape its portfolio to bring it in line with parent ICI plc''s operations worldwide and to leverage its core competence. This will help the Indian subsidiary achieve growth and improve profitability, says ICI India''s managing director A. Narayan. The company may shed some of its existing businesses and acquire some new ones, Mr Narayan said, outlining the company''s strategy after its annual general meeting in Calcutta on 22 July 1999.
ICI India will give further thrust to the 10X plan it introduced in 1995, which envisages multiplying turnover 10 times in 10 years -- to Rs 5,000 crore by 2005. The company aims to achieve this through a strategy shift and the introduction of high-margin products in preference to the existing cyclical low margin commodity-related products.
The company has already made a beginning in this. It has integrated Uniquema, one of the four speciality chemicals of ICI plc, into its own operations. It is now in the process of introducing products from National Starch and Quest. A fourth, Crossfield, will not be introduced in the Indian market immediately.
Even while this integration is taking place, the company has hived off its explosives business into a new joint venture company proposed to be floated with Australia''s Orica, one of the world''s leading supplier commercial explosives.
The ICI India does not consider pharmaceuticals as a preferred business any more. It has already divested its animal health brands to Glaxo, and is considering various options for its anaesthesia business.
The company will give a new focus to paints, its core business, which accounts for 40 per cent of turnover, with high-value decorative segments gaining importance in its business plans. Mr Narayan said the company may consider venturing into fragrance and flavours some time in the future.
Meanwhile, ICI India''s Rishra, plant in West Bengal, one of its oldest, is being revamped. The plant produces paint and rubber chemicals. Post-revamp, rubber chemicals will be discontinued as cheaper imported products are available in the market. The revamp will also involve downsizing and suspension of certain operations.