ICI Pakistan Limited - on a Growth Plan

Article excerpt

ICI Pakistan Limited and its predecessors have been operating in the country for almost a hundred years. Its first factory for the manufacture of Soda Ash was set up in Khewra over fifty years ago. In 1957 it was converted into a public company, with ICI, UK holding the majority share. The Group's trading activities were carried out by a separate company, ICI Pakistan Limited. In 1965 ICI, UK acquired a 50 per cent interest in a paints company at Lahore changing its name from Fullers Paints (Pakistan) Limited to Paintex Limited. The three separate companies were merged into a single company, ICI Pakistan Limited, in 1986, covering both manufacturing and trading activities.

Today, ICI Pakistan Limited with a turnover approaching Rs. 6 billion and a market capitalization of over Rs. 11 billion (4th highest on the KSE) is one of the largest and premier private sector companies in which ICI Plc, UK through its subsidiary ICI Omicron B.V. holds 61.46 per cent shares. It is engaged in the manufacture of Polyester Staple Fibre, Soda Ash, Paints, Agrochemicals and Speciality Chemicals while Pharmaceuticals and Animal Health products are being toll manufactured. It also imports bulk Chemicals and markets Hybrid Seeds besides marketing a growing range of locally produced Consumer Products.

BUSINESSES

Polyester Staple Fibre: Polyester Staple Fibre plant of 12,000 tpa capacity at Sheikhupura, near Lahore was commissioned in 1982 at a cost of Rs. 630 million and its capacity was expanded in 1989 by another 7,000 tonnes at a cost of about Rs. 450 million. Polyester Staple Fibre is used by the textile industry for blending with cotton and viscose to produce value-added blended textiles. Besides major foreign exchange savings the product meets a significant proportion of the country's local demand. Production has increased steadily with improvement in efficiencies and today the plant produces around 28,000 tonnes of Polyester Staple Fibre against a rated capacity of 19000 tonnes.

Soda Ash: Currently 200,000 tonnes of Soda Ash is targeted to be manufactured at Khewra, using locally available salt and limestone. The current capacity has been achieved through a number of expansions, the most recent being in 1994 at a cost of Rs. 800 million. Soda Ash is an essential industrial raw material for manufacture of glass, paper, chemicals, soaps and detergents. ICI supplies around 80 per cent of the country's demand. The plant located at Khewra provides accommodation to 300 families in company built and maintained housing. Schooling, hospital, fire fighting and recreational facilities have been built and are being supported through the company's resources. The company has also made arrangements for piping in fresh water from two sources. Access to some of these essential services are also provided to other residents of Khewra.

Paints: In 1965, ICI UK acquired 50 per cent interest in Fullers Paints situated in Lahore and its name was changed to Paintex Limited. It was converted into a public company in 1973 and merged with ICI Pakistan in 1986. The manufacturing capacity of the plant was upgraded and enhanced in 1981, and since then market share has been progressively consolidated such that today it is the largest paints company dealing in decorative, industrial and automotive paints. It has recently commissioned a new plant for the manufacture of pretreatment chemicals and specialised automotive paints in collaboration with Kansai Paint Company Limited, Japan.

Agrochemicals & Seeds: This is one of the fastest developing businesses of the Company directly supporting the agricultural base of the country. Agrochemicals are imported from the UK as well as formulated at the plant located in Sheikhupura. The company has recently established the Seeds Business which has attained a dominant position in the hybrid Sunflower and Fodder seed market.

Pharmaceuticals: Until recently the Company was merchanting life saving drugs through an effective country-wide distribution network. …