Imperial Chemical Industries
Imperial Chemical Industries was a British chemical company. It was, for much of its history, the largest manufacturer in Britain. Its headquarters were at Millbank in London. ICI was listed on the London Stock Exchange and was a constituent of the FT 30 and later the FTSE 100 indices.
ICI was formed in 1926 as a result of the merger of four of Britain's leading chemical companies. From the onset, it was involved in the production of various chemicals, explosives, fertilisers, insecticides, dyestuffs, non-ferrous metals, and paints; the firm soon became involved in plastics and a variety of speciality products, including food ingredients, polymers, electronic materials, fragrances and flavourings. During the Second World War, ICI's subsidiary ICI Nobel produced munitions for Britain's war effort; the wider company was also involved with Britain's nuclear weapons programme codenamed Tube Alloys. Throughout the 1940s and 1950s, ICI greatly expanded its activities in the pharmaceutic sector; cumulating in the formation of a dedicated subsidiary, ICI Pharmaceuticals, in 1957.
During 1960, ICI's first outsider to serve as chairman, Paul Chambers, was appointed. Chambers reorganised the company, but fell out of favour following an unsuccessful takeover bid of rival firm Courtaulds. Between 1968 and 1971, Peter Allen was chairman of ICI, during which time Viyella was purchased, the subsidiary Cleveland Potash Ltd was created, and profits dipped. Major moves in the 1970s included the acquisition of the American competitor Atlas Chemical Industries Inc. and the divestment of Imperial Metal Industries. By the late 1980s, ICI which had continued to acquire entities such as the Beatrice Chemical Division and Glidden Coatings & Resins, increasing competition and rising internal complexity were driving ICI towards major restructuring plans, including a demerger.
Considerable changes at ICI came about during the 1990s, particularly in the aftermath of an unsuccessful acquisition attempt in 1991 by Hanson of the firm in what would have been the biggest takeover in British history. That same year, ICI sold its agricultural and merchandising operations of BritAg and Scottish Agricultural Industries to Norsk Hydro; it sold its nylon business to DuPont one year later. In 1993, the firm also de-merged its pharmaceutical bio-science businesses as Zeneca. During 1997, ICI's Australian subsidiary, ICI Australia, was sold in exchange for £1 billion. During 2008, ICI was acquired by AkzoNobel for £8 billion; shortly thereafter, portions of ICI were sold off to Henkel while its remaining operations were integrated within AkzoNobel's existing organisation.
History
Development of the business (1926–1944)
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. ICI established its head office at Millbank in London in 1928. Competing with DuPont and IG Farben, the new company produced chemicals, explosives, fertilisers, insecticides, dyestuffs, non-ferrous metals, and paints. In its first year, turnover was £27 million.During the 1920s and 1930s, the company played a key role in the development of new chemical products, including the dyestuff phthalocyanine, the acrylic plastic Perspex, Dulux paints, polyethylene, and polyethylene terephthalate fibre known as Terylene. In 1940, ICI started British Nylon Spinners as a joint venture with Courtaulds.
ICI also owned the Sunbeam motorcycle business, which had come with Nobel Industries, and continued to build motorcycles until 1937.
During the Second World War, ICI was a major participant in Britain's war economy; its subsidiary ICI Nobel was involved in the production of munitions. The company was involved with the United Kingdom's nuclear weapons programme codenamed Tube Alloys.
Postwar innovation (1945–1990)
In the 1940s and 1950s, the company established its pharmaceutical business and developed a number of key products, including Paludrine, halothane, propofol, Inderal, tamoxifen, and PEEK.During the 1950s, ICI developed a material as Crimplene, a thick polyester yarn that was used to make a fabric of the same name. The resulting cloth is heavy and 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 United States.
During 1960, Paul Chambers became the first chairman appointed from outside the company.
Chambers employed the consultancy firm McKinsey to help with reorganising the company. Export sales doubled during his eight-year tenure export, however, Chambers' reputation was severely damaged by a failed takeover bid for Courtaulds in 1961–1962.
On 1 August 1962, ICI's operations in Burma were nationalised following a military coup in the country.
In 1964, ICI acquired British Nylon Spinners, the company it had jointly set up in 1940 with Courtaulds. ICI surrendered its 37.5 per cent holding in Courtaulds and paid Courtaulds £2 million a year for five years, "to take account of the future development expenditure of Courtaulds in the nylon field." In return, Courtaulds transferred to ICI their 50 per cent holding in BNS.
Early pesticide development under ICI Plant Protection Division, with its plant at Yalding, Kent, research station at Jealott's Hill and HQ at Fernhurst Research Station included paraquat, the insecticides pirimiphos-methyl in 1967 and pirimicarb in 1970, brodifacoum was developed in 1974; in the late 1970s, ICI was involved in the early development of synthetic pyrethroid insecticides such as lambda-cyhalothrin.
Peter Allen was appointed chairman between 1968 and 1971. He presided over the purchase of Viyella. Profits shrank under his tenure. During his tenure, ICI created the wholly owned subsidiary Cleveland Potash Ltd, for the construction of Boulby Mine in Redcar and Cleveland, North Yorkshire. The first shaft was dug in 1968, with full production from 1976. ICI jointly owned the mine with Anglo American, and then with De Beers, before complete ownership was transferred to Israel Chemicals Ltd in 2002.
Between 1971 and 1975, Jack Callard held the position of chairman at the firm. Amid Callard's tenure, company profits almost doubled between 1972 and 1974 while ICI became Britain's largest exporter. In 1971, the company acquired Atlas Chemical Industries Inc., a major American competitor. In 1977, Imperial Metal Industries was divested as an independent quoted company.
Between 1982 and 1987, the company was headed by the charismatic John Harvey-Jones. In 1985, ICI acquired the Beatrice Chemical Division; during the following year, it also bought Glidden Coatings & Resins, a leading paints business.
Reorganisation of the business (1991–2007)
By the early 1990s, plans were carried out to demerge the company, as a result of increasing competition and internal complexity that caused heavy retrenchment and slowing innovation. In 1991, ICI sold the agricultural and merchandising operations of BritAg and Scottish Agricultural Industries to Norsk Hydro. It also divested its soda ash products arm to Brunner Mond, ending an association with the trade that had existed since the company's inception, one that had been inherited from the original Brunner, Mond & Co. Ltd.During mid 1991, ICI was subject to an attempted acquisition Hanson; by this point, ICI was commonly being viewed by investors as having been in decline and thus its valuation was depressed, making it more vulnerable to such takeover attempt. Hanson had acquired a 2.8 per cent stake in the company as part of its hostile takeover attempt, which ICI's management team chose to oppose. The envisioned acquisition became hotly contested and controversial, partially as it would have been the biggest takeover in British history at that point. In October 1991, Hanson opted to not proceed with the deal.
In 1992, the company sold its nylon business to DuPont. During 1993, the company de-merged its pharmaceutical bio-science businesses: pharmaceuticals, agrochemicals, specialities, seeds and biological products were all transferred into a new and independent company called Zeneca. Zeneca subsequently merged with Astra AB to form AstraZeneca.
In 1994, Charles Miller Smith was appointed CEO of ICI, one of the few times that an external figure had been appointed to lead the firm, Miller-Smith 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 its historical reliance on commodity chemicals. During 1995, ICI acquired the American paint companies Devoe Paints, Fuller-O'Brien Paints and Grow Group. In 1997, ICI acquired National Starch & Chemical, Quest International, Unichema, and Crosfield, the speciality chemicals businesses of Unilever in exchange for $8 billion. This step was part of a strategy to move away from cyclical bulk chemicals and to progress up the value chain to become a higher growth, higher margin business. Later that same year, it went on to buy Rutz & Huber, a Swiss paints business.
Having taken on some £4 billion of debt to finance these acquisitions, the company was soon compelled 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 £1 billion in 1997, and of its polyester chemicals business to DuPont for $3 billion also in 1997.
- In 1998, it bought Acheson Industries Inc., an electronic chemicals business.
- In 2000, ICI sold its diisocyanate, advanced materials, and speciality chemicals businesses on Teesside and worldwide, and Tioxide, its titanium dioxide subsidiary, to Huntsman Corporation for £1.7 billion. It also sold the last of its industrial chemicals businesses to Ineos for £325 million.
- In 2002, the ICI wholly transferred ownership of Boulby Mine to Israel Chemicals Ltd.
- In 2006, the Company sold Quest International, its flavours and fragrances business, to Givaudan, for £1.2 billion and Uniqema, its oleochemical business, to Croda International, for £410 million.