31/07/2003

ICI axes 1,400 on ‘uncertain future’

Chemicals giant ICI are to cut another 1,400 jobs worldwide, with a further 300 of the axed jobs to go in the UK.

This will bring the total jobs shed by ICI in the UK this year to around 600. ICI has not ruled out compulsory redundancies, but the company hope to make most of the cuts through natural wastage and a programme of voluntary redundancies.

The announcement followed the company’s second quarter results that revealed a 27% drop in profits to £48 million, and revenue down from £82 million to £60 million.

ICI announced the introduction of the second phase of a restructuring that outlines measures which will save ICI upward of £100 million by 2006.

John McAdam, Chief Executive, said that “profits remain disappointing overall, and the economic outlook remains uncertain”. He said: “Action is therefore required to further reduce costs”.

However, he said: “ICI’s performance improved from the first to the second quarter. Paints continued to perform well, and National Starch improved considerably, delivering comparable trading profit in line with last year for the quarter. Results for both Quest and Uniqema were somewhat better than Q1, and discretionary costs were reduced across the Group.”

The second stage of the structural cost reduction programme initiated last quarter was implemented.

The ICI Chief Executive: “These plans are far-reaching, impacting each of the International Businesses and the Corporate Centre. We intend to fund them by reducing capital expenditure and by making a number of small divestments. The total programme, including the initiatives announced at Q1, is expected to deliver savings of more than £100 million per annum by 2005, equivalent to around 2% of today’s sales."

Also announced as part of an overall re-financing package, was a funding investment for Ineos Chlor. ICI will invest £60 million in the business in which it holds a 15% stake, while the UK government will invest £50 million as part of a Regional Selective Finance package to rescue the business and safeguard 8,000 jobs in the industrial chemicals manufacturing business.

(SP)

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