Mr Hampel believes the businesses should achieve an average return of at least 20 per cent, and that returns should not fall below 10 per cent even at the trough of the recession.
Of the 12 businesses that will form part of new ICI - including paints, explosives, titanium dioxide and industrial chemicals - only half are achieving that target, while three more have the potential to do so. The other three are some way from it and it is likely they will be targets for divestment unless their performance markedly improves.
The overall return on new ICI's pounds 4bn capital in 1992, based on trading profit before exceptional charges, was just 3.7 per cent. Although it does not break down net assets by individual business, it is likely that the businesses that do, or could, achieve the target returns would include paints, explosives, titanium dioxide and, eventually, acrylics - all businesses where ICI is number one or two internationally.
But analysts believe that Mr Hampel will carry out further rationalisation in the materials and industrial chemicals division. PaineWebber, the US investment house, believes the candidates for sale or joint venture are the polyester films business, part of materials, regional companies such as ICI Australia, and aromatics interests. Peripheral businesses in core divisions such as the supply of paint for car manufacturers could also be sold.
These areas have already undergone considerable restructuring. In materials, the group has virtually withdrawn from production of advanced materials intended to replace metal in cars and aircraft, and is swapping its nylons business for Du Pont's acrylics operation. It is also taking BASF's acrylics business in exchange for polypropylene, part of industrial chemicals.
Mr Hampel's comments during a press visit to the paints plant in Stowmarket, Suffolk, underline his determination to improve the performance of the group, and to ensure that it can take full advantage of the restructuring he believes is inevitable in the chemical industry in the 1990s.Reuse content