Research Analyst
Mar 16 - 22, 2009

ICI Pakistan Limited's principal activity is manufacturing of polyester staple fibre, POY chips, soda ash, paints, specialty chemicals, sodium bicarbonate and polyurethanes. The group is also into marketing of seeds, toll manufacturing, and importing of pharmaceuticals and animal health products and purchasing of general chemicals.

ICI operates through six business segments: Polyester, Soda Ash, Paints, Life Sciences, Chemicals and Others. On 2 Jan 2008, AkzoNobel made a formal offer for the acquisition of ICI Plc, which was approved by the shareholders of both companies as well as regulatory authorities, and the takeover process was completed, making AkzoNobel the ultimate holding company of ICI Pakistan. ICI Pakistan now operates as an independent business unit within AkzoNobel and as a part of its specialty chemicals portfolio.



Paints Business operates in the decorative, industrial and the refinish segments and markets a wide range of quality products and services. ICI is the number one paints and coatings' company in Pakistan with a brand Dulux, a household name.

ICI is also the leading paint company in Pakistan and drives operations with a relentless focus on the needs of its customers.


ICI is the largest player in the soda ash market in Pakistan, producing and catering to approximately 70% of the country's requirement for this commodity. Soda ash is used in manufacturing of glass, soap, detergent, and paper. It also produces sodium bicarbonate at the same facility.

The company began commercial production in 1944 with the nameplate capacity of 18ktpa. Since then, the company has been modernized and expanded manifolds. The last expansion of 50ktpa in 2007 has taken the company to the annual capacity of 285 ktpa. Another back to back expansion of 65 ktpa is underway and expected to be on line in April 2009. This will take the plant to a total annual capacity of 350 ktpa.


ICI has a leading market position and is known for unrivaled technical service and product quality. It manufactures and markets polyester staple fiber (PSF), a synthetic cotton, mainly used in the textile industry for producing (blended with cotton) polyester rich yarn, fabrics and clothing.


Its life sciences business comprises of pharmaceuticals, hybrid seeds, animal health, and the recently launched vegetable seeds segment. The pharmaceuticals segment markets a portfolio of leading prescription drugs sourced from reputed principals and has launched a range of branded generics.

The animal health segment markets superior quality of veterinary medicines of world-renowned companies and its own brands for livestock and poultry industry.

Seed segment is one of the leading providers of hybrid seeds in the country and a market leader in both the hybrid sunflower and fodder segments. The vegetable seeds segment has recently entered the market with OPVs-Open Pollinated Varieties.


ICI's chemicals business comprises of diversified portfolios encompassing general chemicals, specialty chemicals, and starch products. The general chemicals business imports, blends, distributes and sells over 250 products and variants. The specialty chemicals business manufactures and markets textile auxiliaries, adhesives, paint lattices, crop protection emulsifiers, and a range of process chemicals.


(Rs mn )

Turnover 31,921.9 25,988.4 23%
Net Sales Income 27,963.9 23,024.1 21%
Gross Profit 5,647.3 4,818.8 17%
Operating Result 3,352.4 2,984.0 12%
Profit Before Tax 3,129.9 2,768.5 13%
Profit After Tax 2,068.9 1,784.8 16%
EPS (Rs) 14.9 12.9 16%
Source: ICI

The company sailed through the 2008 without any major injury (lost time case) to the company employees, supervised contractors or other contractors. Net sales income and gross profits were 21% and 17% higher respectively compared to last year. As a result, the company crossed Rs 2 bn after tax profit mark for the first time, registering a growth of 16% over last year.

Soda ash and life sciences businesses posted highest ever operating results, which was higher than 2007, by 41% and 21% respectively. Dividend of 40% i.e. Rs 4 per share of Rs 10 of the issued was given to the shareholders. This, including the interim dividend of 25%, makes a total dividend of 65%. The paid-up capital was Rs 1,388,023,000.


Domestic business conditions during the year remained extremely challenging without any substantial sign of improvement. Security concerns, extended energy outages, high inflation, hike in interest rates, depreciation of the Pak rupee, coupled with recession in the developed world put the domestic economy under immense pressure and affected the demand supply dynamics of the business environment.

Despite extremely difficult trading environment, the full-year operating results were 12% higher compared to 2007. All businesses, except paints, contributed towards this growth with improved unit margins driven by efficiency improvement, initiatives, and sustainable increase in selling prices. Paints business achieved double-digit volume growth on the back of strong sales in the decorative and refinish segments however, its overall operating result was marred by one off-provisioning amounting to Rs 115.2 million.


ICI delivered a strong set of results despite tough business conditions in the later half of 2008. The upsurge and spread of security incidents, growing energy deficit, higher interest rates and inflation, sharp slowdown of domestic economic growth and recession in the developed world pose challenges for the future. The company has a strong track record of overcoming tough business conditions.

ICI should focus on controlling costs, savings, manufacturing, and improving of supply chain efficiencies.