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01/05/2003
ICI to shed 300 UK jobs after profits slide
Chemicals giant ICI is to shed around 300 jobs in the UK as part of a global restructuring programme.
Up to 700 jobs worldwide could go on the back of a sharp fall in profits. The announcement followed ICI’s latest quarterly profits statement which revealed that the group was “under-performing” with a 21% drop in first quarter profits when compared with the corresponding period last year.
Commenting on the figures ICI Chief Executive John McAdam said: “Although sales and cash flow for the quarter were satisfactory, profit was poor, and the group is under-performing.
"As a consequence, we have undertaken an intensive review of major strategic options and through this process we have reached a number of conclusions.
“Firstly, divestments are not attractive at this point in time, due to the recent underperformance of businesses and potential disposal costs. Secondly, we believe that significant scope exists across the whole group for cost reduction and performance improvement. We believe that pursuing these opportunities will create most value for shareholders.”
ICI announced that it is to address the group’s performance issues in two ways. Initiatives will attempt to restore the market position of ICI’s food division Quest, which has been affected by poor sales, and, in an effort to restore margins in the National Starch unit, a price hike is planned to offset a rise in the cost of raw materials. Also structural cost reductions will be implemented across the group’s business in a bid to save around £30 million a year.
Mr McAdam said he was currently conducting a “radical and rigorous assessment" of structural cost reduction. He said that shareholders would be updated further when the half-year results were in.
However, he warned: “The economic environment for the rest of 2003 is, at best, uncertain, and it is clear that ICI cannot rely on improved market conditions to aid profit growth.”
The group are to set aside some £53 million for the restructuring process.
ICI’s AGM is to be held on 22 May 2003 in London.
(SP)
Up to 700 jobs worldwide could go on the back of a sharp fall in profits. The announcement followed ICI’s latest quarterly profits statement which revealed that the group was “under-performing” with a 21% drop in first quarter profits when compared with the corresponding period last year.
Commenting on the figures ICI Chief Executive John McAdam said: “Although sales and cash flow for the quarter were satisfactory, profit was poor, and the group is under-performing.
"As a consequence, we have undertaken an intensive review of major strategic options and through this process we have reached a number of conclusions.
“Firstly, divestments are not attractive at this point in time, due to the recent underperformance of businesses and potential disposal costs. Secondly, we believe that significant scope exists across the whole group for cost reduction and performance improvement. We believe that pursuing these opportunities will create most value for shareholders.”
ICI announced that it is to address the group’s performance issues in two ways. Initiatives will attempt to restore the market position of ICI’s food division Quest, which has been affected by poor sales, and, in an effort to restore margins in the National Starch unit, a price hike is planned to offset a rise in the cost of raw materials. Also structural cost reductions will be implemented across the group’s business in a bid to save around £30 million a year.
Mr McAdam said he was currently conducting a “radical and rigorous assessment" of structural cost reduction. He said that shareholders would be updated further when the half-year results were in.
However, he warned: “The economic environment for the rest of 2003 is, at best, uncertain, and it is clear that ICI cannot rely on improved market conditions to aid profit growth.”
The group are to set aside some £53 million for the restructuring process.
ICI’s AGM is to be held on 22 May 2003 in London.
(SP)
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