CALCUTTA, July 24: ICI India Ltd will move away from bulk industrial chemicals and focus on `light effect' chemicals in line with its British parent's global strategy, but will continue in businesses that are `regional' strengths, managing director Aditya Narayan said.

In the context of Imperial Chemical Industries Plc getting out of industrial chemicals worldwide, Narayan said a `radical transformation' is taking place "with the good old ICI going into history". In effect, there will be "a new ICI for the new century," he told reporters after the company's 43rd annual general meeting here.

Commenting on the fallout of parent ICI Plc's $8.08 billion acquisition of Anglo-Dutch giant Unilever's speciality chemicals business, ICI India chairman Ashok Ganguly said that the ripple effects are "all in the realm of possibility and probability." The businesses acquired are National Starch (industrial adhesives), Quest (food flavours and fragrances), Unichema (chemicals from natural fats) and Crosfiled (detergent ingredients).

Replying to a query on whether ICI India is falling in line and negotiating with Hindustan Lever Ltd, the Indian arm of Unilever, Ganguly said "not yet".

In the context of ICI Plc's sale earlier this month of its titanium dioxide business outside North America to DuPont, the US chemicals giant, Narayan said that in India ICI's titanium dioxide activities were in the nature of a commission trading business and not a core portfolio. ICI Plc also sold its polyester business to DuPont in a move aimed at funding its shift into speciality chemicals and out of industrials.

Top officials from ICI India told The Financial Express that ICI Plc's move would naturally mean the shelving of plans for an Indian plant to make titanium dioxide, the pigment used in white paint. But, with ICI India focusing on paints for its 10X plan of increasing sales 10-fold by 2005, Narayan said the parent's pullout from titanium dioxide does not mean that the Indian outfit will not be allowed to build on regional strengths.

"Paints will be a sizeable part of our portfolio by 2005," Narayan said, adding that the other areas that the company would focus on to get to its 10X goal are: surfactants, acrylics and polyurethanes.

The 20 million litre per annum paint manufacturing plant in Chandigarh will be commissioned in March 98, he added. On ICI's explosives business, Narayan said that its future in the country depended on its performance, besides the parent company's plans for its explosives business.

At the AGM, the chairman said the re-engineering should not be perceived as "asset stripping by ICI with the ultimate aim of exiting from India". Rather, the actual goal was "to disinvest businesses which had outlived their utility in the ICI India core portfolio and aggressively invest in areas which had been starved for a number of years." Simultaneously, there is also a programme to revamp and modernise the sales and distribution network nationwide, Narayan said.

For the year to March 31, 1997, ICI India declared a dividend of 45 per cent - an increase for the sixth consecutive year - as operating profits rose by 26 per cent and profit after tax by 20 per cent.

Recast core team to have dual roles

ICI India has reconstituted its executive team effective June 1, 1997. Executive directors will have dual roles of accountability for a specific business or cluster of businesses and functional responsibilities.

The core team consists of managing director Aditya Narayan, Vinod Bahree, Sekhar Raha, David Carter, Rajiv Jain, Param Bhargava and MR Rajaram. The board, as part of the restructuring exercise, has recently constituted specific committees for nomination, remuneration, audit and "adherence to fiduciary commitments".

Narayan is in charge of overall corporate planning and chairman of the research and technology centre. Vinod Bahree will look after safety, health and environment, operations, engineering and personnel and head the performance chemicals and materials divisions.

Sekhar Raha is in charge of corporate relations. His business portfolio includes regional businesses, rubber chemicals, pharmaceuticals and nitrocellulose. David Carter will shoulder functional responsibilities for finance, information technology, legal and secretarial affairs. Rajiv Jain will oversee corporate costs and explosives business.

Param Bhargava will head research and marketing divisions and paints business, while MR Rajaram will be in charge of planning, mergers and acquisitions and properties.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.