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ICI forms JVC with Orica of Australia

ICI India Limited has decided to tie up with Orica Limited, the largest chemical company of Australia, by setting up a joint venture company in India to pep up its bulk and packaged explosives business.

ICI India would hold 51 per cent of the equity share capital in the JVC and would also have a majority representation on the board, including the positions of chairman and the managing director, company secretary Ajit Yadav said. The JVC would, in fact, materialise through Initiating Explosives Systems India Limited, which itself was a joint venture between ICI and Ensign Bickford of USA, he said.

ICI would transfer its explosive business undertakings and its shareholding in IES India to the JVC, he added. Incidentally, ICI plc, the parent company of ICI India, had divested its explosives business mainly in the US and Europe to Orica in 1997 and it had notched up an annual turnover of US $ 2.7 billion in the last fiscal. It employs about 10,000 people in 27 countries around the world with operations in the Americas, Europe, Asia and the Pacific, Yadav said.

The aggregate net sale of ICI India's explosive business and IES India in 1998--99 was about Rs 1.6 billion, Yadav said, adding that the terms and conditions for transfer of the explosive business undertaking, sale of shareholding in IES and ICI's investment in the share capital of the proposed JVC would be decided by the board later.

Yadav further assured that the employees of its explosive business would be transferred to the JVC on terms and conditions not less favourable than the terms and conditions of their employment with the company at the time of transfer, without interruption in service. ICI India's technical strengths and experience in commercial explosives, combined with its knowledge of customer requirements and supplemented with the best available technology, support and resources of Orica would enable the JVC to offer customers in India and abroad a world class range of products and services in a cost -efficient manner, Yadav claimed.

He said the formation of the JVC would be congruent with ICI India's strategy to strengthen the position of some of its business through alliances with global leaders whilst redeploying resources in other growth businesses to generate best possible returns for the shareholders.

Yadav further said to facilitate the formation of the JVC, upon receipt of all approvals and completion of all other formalities, the company had procured the incorporation of a new company under the name of Indian Explosives Pvt Ltd in West Bengal. A resolution seeking approval of the shareholders to transfer by sale or otherwise, the company's explosives business undertaking comprising manufacture, marketing and sale of packages and bulk explosives and of marketing and sale of initiating explosives systems as a going concern would be placed in its forthcoming annual general meeting.

UNI

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