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Imperial Chemical Industries
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Imperial Chemical Industries (ICI) is a British chemical subsidiary of a Dutch conglomerate and one of the largest chemical producers in the world. It is based in Slough, UK. It produces paints and speciality products (including ingredients for foods, specialty polymers, electronic materials, fragrances and flavours). It employs around 29,000 people and had a turnover of just over £4.8 billion in 2006. The Company was once a constituent of the FTSE 100 Index but since January 2008 it has been a subsidiary of Dutch chemicals group Akzo Nobel, which is in the process of fully integrating the two companies.
Company was founded in December 1926 by way of the merger of four companies — Brunner Mond, Nobel Explosives, the United Alkali Company, and British Dyestuffs Corporation.
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Encyclopedia
Imperial Chemical Industries (ICI) is a British chemical subsidiary of a Dutch conglomerate and one of the largest chemical producers in the world. It is based in Slough, UK. It produces paints and speciality products (including ingredients for foods, specialty polymers, electronic materials, fragrances and flavours). It employs around 29,000 people and had a turnover of just over £4.8 billion in 2006. The Company was once a constituent of the FTSE 100 Index but since January 2008 it has been a subsidiary of Dutch chemicals group Akzo Nobel, which is in the process of fully integrating the two companies.
History
Development of the business
The Company was founded in December 1926 by way of the merger of four companies — Brunner Mond, Nobel Explosives, the United Alkali Company, and British Dyestuffs Corporation. It established its Head Office at Millbank in London in 1928.
Competing with DuPont and IG Farben, the new company produced chemicals, explosives, fertilisers, insecticides, dyestuffs, non-ferrous metals, and paints. In its first year turnover was £27m.
In the 1920's and 30's the Company played a key role in the development of new chemical products, including the dyestuff phthalocyanine (1929), the acrylic plastic Perspex (1932), Dulux paints (1932, co-developed with DuPont), polyethylene (1937) and Polyethylene terephthalate fibre known as Terylene (1941).
ICI also owned the Sunbeam motorcycle business, which had come with Nobel Industries, and continued to build motorcycles until 1937.
In the 1940's and 50's the Company established its pharmaceutical business and developed a number of key products including Paludrine (1940s, an anti-malarial drug), halothane (1951, an anaesthetic agent), Gramoxone (1962, a pesticide), Inderal (1965, a beta-blocker), brodifacoum (a rodenticide) in 1974, tamoxifen (1978, a frequently used drug for breast cancer), and PEEK (1979, a high performance thermoplastic). ICI formed ICI Pharmaceuticals in 1957.
During this period ICI was confronted with the nationalisation of its operations in Myanmar on 1. August 1962 as a consequence of the military coup.
The Company acquired Atlas Chemicals, a major US competitor in 1971.
During the 1980's (from 1982 to 1987) the Company was led by the charismatic John Harvey Jones. Under his leadership the Company acquired the Beatrice Chemical Division in 1985 and Glidden Coatings & Resins, a leading paints business in 1986.
In 1991 ICI sold the agricultural and merchandising operations of BritAg and Scottish Agricultural Industries to Norsk Hydro.
In 1991, the company successfully fought off a hostile takeover bid from the Hanson plc conglomerate.
In 1993 the company demerged its pharmaceutical bioscience businesses: pharmaceuticals, agrochemicals, specialities, seeds and biological products were all transferred into a new and independent company called Zeneca Group (which subsequently merged with Astra AB to form AstraZeneca PLC).
In 1997 ICI acquired National Starch & Chemical, the specialty chemicals business of Unilever for $8bn. This step was part of a strategy to move away from cyclical bulk chemicals and up the value chain to be a higher growth, higher margin business. Later that year it went on to buy Rutz & Huber, a Swiss paints business.
Disposals of bulk chemicals businesses at that time included the sale of its Australian subsidiary, ICI Australia, for £1bn in 1997, and of its polyester chemicals business to DuPont for $3bn also in 1997.
Then the following year it bought Acheson, an electronic chemicals business.
In 2000 ICI sold its petroleum business at Teesside and Tioxide, its titanium dioxide subsidiary, to Huntsman Corporation for £1.7bn. It also sold the last of its industrial chemicals businesses to Ineos for £0.3bn.
In 2006 the Company sold Quest Fragrance, its flavours business, to Givaudan, for £1.2bn and Uniqema, its skincare business, to Croda International, for £410m.
Takeover by Akzo Nobel
Dutch firm Akzo Nobel (owner of Crown Berger paints) bid £7.2 billion (€10.66 billion or $14.5 billion US) for ICI in June 2007. An area of concern about a potential deal was ICI's British pension fund, which had future liabilities of more than £9 billion at the time. Regulatory issues in the UK and other markets where Dulux and Crown Paints brands each have significant market share were also a cause for concern for the boards of ICI and Akzo Nobel. In the UK, any combined operation without divestments would have seen Akzo Nobel have a 54% market share in the paint market. The initial bid was rejected by the ICI board and the majority of shareholders. However, a subsequent bid for £8 billion (€11.82 billion) was accepted by ICI in August 2007, pending approval by regulators.
As of 8.00am on 2 January 2008 ICI PLC became a subsidiary of Akzo Nobel NV. Shareholders of ICI received either £6.70 in cash or Akzo Nobel loan notes to the value of £6.70 per 1 nominal ICI share. The adhesives business of ICI was transferred to Henkel as a result of the deal, while Akzo agreed to sell its Crown Paints subsidiary to satisfy the concerns of the European Commissioner for Competition.
The areas of concern regarding the ICI UK pension scheme were addressed by ICI and Akzo.
Operations
ICI operated a number of chemical sites around the world. In the UK the main plants were situated as follows:
- Blackley (in Manchester): ICI used the site to manufacture dyestuffs. The dye business, known as the ICI Dyestuffs Division in the 1960's, went through several reorganizations. Through the years it was combined with other specialty chemicals businesses and became ICI Colours and Fine Chemicals and then ICI Specialties.
- Runcorn (in Cheshire): ICI used the site to manufacture chlorine and caustic soda. For many years it was known as ICI Mond Division but later became part of the ICI Chemicals and Polymers Division. The Runcorn site was also responsible for the development of the HiGEE and Spinning Disc Reactor concepts, which were developed by Professor Colin Ramshaw and which led to the concept of Process Intensification: research into these novel technologies is now being pursued by the Process Intensification Group at Newcastle University.
- Ardeer (in Stevenston, Ayrshire): ICI Nobel used the site to manufacture dynamite and other explosives and nitrocellulose-based products. For a time, the site also produced nylon and nitric acid. Nobel Enterprises sold in 2002 to Inabata.
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