Imperial Chemical Industries

Imperial Chemical Industries

Industry	Chemicals
Founded	1926
Defunct	2008
Headquarters	London, England, UK
Key people	Hans Wijers (CEO AkzoNobel)
Products	Paints & speciality chemicals
Revenue	£4,845 million GBP (2006)
Operating income	£502 million GBP (2006)
Net income	£295 million GBP (2006)
Owner(s)	AkzoNobel
Employees	29,130 (2006)
Website	Imperial Chemical Industries

Imperial Chemical Industries (ICI) was a British chemical company, taken over by AkzoNobel, a Dutch conglomerate, one of the largest chemical producers in the world. In its heyday, ICI was the largest manufacturing company in the British Empire, and commonly regarded as a "bellwether of the British economy".^[1] It produced paints and speciality products (including ingredients for foods, specialty polymers, electronic materials, fragrances and flavours). It employed around 29,000 people and had a turnover of just over £4.8 billion in 2006. The company was independent from 1926 to 2008, headquartered for most of that time in Millbank, London, and was a constituent of the FT30 Index and FTSE 100 Index. After the January 2008 change of ownership, AkzoNobel fully integrated ICI's operations.^[2][3][4]

Contents 1 History 1.1 Development of the business 1.2 From 1991 till 2007, Reorganisation of the business 1.3 2007, Takeover by Akzo Nobel 2 Operations 3 See also 4 References 5 External links

History

Development of the business

The Company was founded in December 1926 from the merger of four companies – Brunner Mond, Nobel Explosives, the United Alkali Company, and British Dyestuffs Corporation.^[5] It established its Head Office at Millbank in London in 1928.^[5]

Competing with DuPont and IG Farben, the new company produced chemicals, explosives, fertilisers, insecticides, dyestuffs, non-ferrous metals, and paints.^[5] In its first year turnover was £27 million.^[5]

In the 1920s and '30s the company played a key role in the development of new chemical products, including the dyestuff phthalocyanine (1929), the acrylic plastic Perspex (1932),^[5] Dulux paints (1932, co-developed with DuPont),^[5] polyethylene (1937)^[5] and Polyethylene terephthalate fibre known as Terylene (1941).^[5]

ICI also owned the Sunbeam motorcycle business, which had come with Nobel Industries, and continued to build motorcycles until 1937.^[6]

In the 1940s and '50s the Company established its pharmaceutical business and developed a number of key products including Paludrine (1940s, an anti-malarial drug),^[5] halothane (1951, an anaesthetic agent), Inderal (1965, a beta-blocker),^[5] Tamoxifen (1978, a frequently used drug for breast cancer),^[7] and PEEK (1979, a high performance thermoplastic).^[5] ICI formed ICI Pharmaceuticals in 1957.

ICI developed a fabric in the 1950s known as crimplene. Crimplene is a thick, polyester yarn used to make a fabric of the same name. The resulting cloth is heavy, wrinkle-resistant and retains its shape well. The California-based fashion designer Edith Flagg was the first to import this fabric from Britain to the USA. During the first two years, ICI gave Flagg a large advertising budget to popularise the fabric across America.

Early pesticide development included: Gramoxone (1962, a herbicide),^[5] the insecticides pirimiphos-methyl in 1967 and pirimicarb in 1970, brodifacoum (a rodenticide) was developed in 1974; in the late 1970s, ICI was involved in the early development of synthetic pyrethroid insecticides such as lambda-cyhalothrin.

ICI was confronted with the nationalisation of its operations in Burma on 1 August 1962 as a consequence of the military coup.^[8] The Company acquired Atlas Chemical Industries Inc., a major US competitor in 1971.^[5]

During the 1980s (from 1982 to 1987,) the Company was led by the charismatic John Harvey Jones.^[9] Under his leadership the Company acquired the Beatrice Chemical Division in 1985 and Glidden Coatings & Resins, a leading paints business in 1986.^[10]

From 1991 till 2007, Reorganisation of the business

In 1991 ICI sold the agricultural and merchandising operations of BritAg and Scottish Agricultural Industries to Norsk Hydro.^[11]

In 1991, the company successfully fought off a hostile takeover bid from the Hanson plc conglomerate.^[12] It also divested its Soda Ash Products arm to Brunner Mond, ending an association with the trade which had existed from the company's inception (inherited from the original Brunner, Mond & Co. Ltd).

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).^[13]

In 1994 Charles Miller Smith was appointed Chief Executive Officer. This was one of the few times that a 'non-ICI man' had led the company, he having previously been a Director at Unilever. Shortly afterwards the company acquired a number of former Unilever businesses, in an attempt to move away from the company's historical reliance on commodity chemicals. In 1997 ICI acquired National Starch & Chemical, the specialty chemicals business of Unilever for $8bn.^[14] 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.^[5] Later that year it went on to buy Rutz & Huber, a Swiss paints business.^[15]

Having taken on some £4 billion of debt to finance these acquisitions, the company had to sell off its commodity chemicals businesses.

• Disposals of bulk chemicals businesses at that time included the sale of its Australian subsidiary, ICI Australia, for £1bn in 1997,^[16] and of its polyester chemicals business to DuPont for $3 billion also in 1997.^[17]
• The following year it bought Acheson, an electronic chemicals business.^[18]
• In 2000 ICI sold its petroleum business at Teesside and Tioxide, its titanium dioxide subsidiary, to Huntsman Corporation for £1.7 billion.^[19] It also sold the last of its industrial chemicals businesses to Ineos for £0.3 billion.^[20]
• In 2006 the Company sold Quest International, its flavours and Fragrances business, to Givaudan, for £1.2 billion^[21] and Uniqema, its textile auxillaries business, to Croda International, for £410 million.^[22]

Having sold off much of its historically profitable commodities businesses, and many of the new speciality businesses, which it had failed to integrate, the company consisted mainly of the Dulux paints business, which quickly found itself the subject of a takeover by Akzo Nobel.

2007, 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.^[23] 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.^[24] The initial bid was rejected by the ICI board and the majority of shareholders.^[25] However, a subsequent bid for £8 billion (€11.82 billion) was accepted by ICI in August 2007, pending approval by regulators.^[26]

At 8.00am on 2 January 2008 completion of the takeover of ICI PLC by Akzo Nobel NV was announced.^[2] 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,^[27] while Akzo agreed to sell its Crown Paints subsidiary to satisfy the concerns of the European Commissioner for Competition.^[28]

The areas of concern regarding the ICI UK pension scheme were addressed by ICI and Akzo.^[29]

Operations

ICI operated a number of chemical sites around the world. In the UK the main plants were situated as follows:

• Billingham (in Stockton-on-Tees) and Wilton (in present day Redcar and Cleveland): ICI used the site to manufacture fertilisers in the 1920s and went on to produce plastics at Billingham in 1934. During World War II it manufactured synthetic ammonia for explosives.^[30] The ICI Billingham Division was split into the ICI Heavy Organic Chemicals Division and ICI Agricultural Division in the 1960s. From 1971 to 1988 ICI Physics and Radioisotopes Section (later known as Tracerco) operated a small General Atomics TRIGA Mark I nuclear reactor at its Billingham factory for the production of radioisotopes used in flow and level instruments etc.^[31]

• Blackley (in Manchester): ICI used the site to manufacture dyestuffs. The dye business, known as the ICI Dyestuffs Division in the 1960s, 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.^[32]

• Runcorn (in Cheshire): ICI used the site to manufacture chlorine and caustic soda.^[33] 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.^[34]

• Winnington and Wallerscote (in Northwich, Cheshire): It was here that ICI manufactured sodium carbonate (soda ash) and its various by-products such as bicarbonate of soda, and sodium sesquicarbonate. The Winnington site, first built in 1873 by the entrepreneurs John Tomlinson Brunner and Ludwig Mond, was also the base for the former the company Brunner, Mond & Co. Ltd and, after the merger which created ICI, the powerful and influential Alkali Division. It was at the laboratories here, in 1933, that polythene was first discovered by accident during experiments into high pressure reactions.^[35] Wallerscote was built in 1926, its construction delayed by the First World War, and became one of the largest factories devoted to a single product (soda ash) in the world.^[36] However, the decreasing relevance of the soda ash trade to ICI in favour of newer products such as paints and plastics, meant that by 1984 the Wallerscote site was closed, and thereafter mostly demolished. The laboratory where polythene was discovered was sold off and became home to a variety of businesses including a go-kart track and paintballing, and the Winnington Works were divested to the newly formed company, Brunner Mond, in 1991.

• 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 was sold in 2002 to Inabata.^[37]

• Slough (in Berkshire): Headquarters of ICI Paints Division.^[38]

• Welwyn Garden City (in Hertfordshire): Headquarters of ICI Plastics Division until the early 1990s.^[39]

See also

• Eley Brothers
• IMI plc
• Kynoch
• Pharmaceutical industry in the United Kingdom

References

External links

• Official site
• Dulux
• National Starch and Chemical Company ICI subsidiary.
• Yahoo! profile
• Orica

Chairmen of Imperial Chemical Industries Lord Melchett (1926–1930) · Lord McGowan (1930–1950) · Lord Fleck (1953–1960) · Sir Paul Chambers (1960–1968) · Sir Peter Allen (1968–1971) · Sir Jack Callard (1971–1975?) · Sir John Harvey-Jones (1982–1987) · Sir Denys Henderson (1987–1995) · Sir Ronnie Hampel (1995–1999) · Charles Miller Smith (1999–2001) · Lord Trotman (2002–2003) · Peter Ellwood (2004–2008)

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