After 13 months, AkzoNobel has reached the halfway point in its two-step plan to split off its paints business from ICI Pakistan and sell off the rest of that business.
The company announced Thursday (June 14) that it had completed the restructuring of its activities in Pakistan by formally establishing AkzoNobel Pakistan Limited (a paints business) as a separate legal entity from ICI Pakistan (comprising polyester fiber, soda ash, life sciences and chemicals).
|Protective coatings maker AkzoNobel sees more profit in paints than in polyester fiber and soda ash.|
As previously announced, the split means that the company has started the formal sale process to divest its 75.81% shareholding in ICI Pakistan.
3 Core Areas
Led by CEO Jehanzeb Khan, the new AkzoNobel Pakistan Limited business is focused on three core areas: Performance Coatings, Specialty Chemicals and Decorative Paints.
“Pakistan offers clear opportunities for the future, and we are committed to realizing our growth ambitions through these more strategically focused activities,” said Leif Darner, AkzoNobel’s Executive Committee member responsible for the Middle East.
“ICI Pakistan remains an attractive proposition with a number of strong businesses, and we are confident that we will find a new owner better suited to achieving their obvious potential.”
In announcing the breakup last year, AkzoNobel called Pakistan “an important market.” The company said it was “committed to developing its ongoing coatings and paints business together with any other opportunities for its core activities in Pakistan.”
The coatings activities of ICI Pakistan were transferred to AkzoNobel Pakistan Limited through a legal process of demerger.
ICI Pakistan has been a subsidiary of AkzoNobel since 2008, when the company acquired Imperial Chemical Industries (ICI) PLC. In 2010, ICI Pakistan’s revenue amounted to €305 million (about $385 million US).
In January, ICI Pakistan was one of 16 paint companies reprimanded by Pakistan’s anti-trust agency for a longstanding practice of hiding monetary tokens for painters in paint packaging.
According to the Competition Commission of Pakistan (CCP), the companies concealed discounts or tokens worth money at the bottom of packs of paint. The value of the tokens varied with the brand and the size of the pack, and end users did not know about them, the commission said.
The companies were ordered to disclose the practice.