ICI in talks on powder coatings sale

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The Independent Online
IMPERIAL Chemical Industries is discussing the sale of its powder coatings business to Ferro Corporation, the US group with which it was discussing a joint venture a year ago.

The powder coatings business has sales of about dollars 100m ( pounds 70m) a year, split between the US and Europe, and is believed to be making only a small profit. Its products are used mainly for coating washing machines and other domestic appliances.

Ferro's business is a similar size and together they would form the world's largest powder coatings specialist, with a 16 per cent market share, overtaking Courtaulds, which has about 9 per cent of the market.

The two groups started joint venture talks in August 1991, but these were abandoned five months later. Analysts say this was because of a disagreement over which company should take the dominant role - ICI wanted a 51 per cent stake in the combined company.

An ICI spokesman said yesterday that although the joint venture was abandoned the rationale remained. 'You need to put the two together to be big enough to compete globally,' he said.

ICI's paints division, which contributes about pounds 1.5bn of the group's pounds 12bn turnover, is focusing on three areas: decorative paints, re- finishing for repairing car bodies and packaging and coatings.

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