ICL to dispose of plants

ICL, once the UK's flagship computer manufacturer, will shortly announce the sale of its factories. Keith Todd, the chief executive, said last week that the deal will be completed "before the end of the year". Observers believe the buyer will be a US or Far Eastern company, because the factories have been sending an increasing proportion of their output to these regions.

The manufacturing operation, D2D, has factories at Kidsgrove, near Stoke- on-Trent, and in Manchester. D2D employs more than 2,500 people and made sales of pounds 360m in 1995. The plants have picked up several awards, and last month won the fifth quality award in five years from Sun Microsystems.

But the fact that they manufacture for Sun reflects D2D's changing role. ICL describes it as "the world's sixth largest contract electronics manufacturer". Less than half its output goes into ICL machines - the rest is bought by companies such as Hewlett Packard, Dell, ABB and Acorn Computers.

Mr Todd announced in March that he wanted to sell a majority stake in D2D. His aim was to reinforce the path he had chosen for ICL as "the best European-based systems and services business". Shedding the factories is a way of demonstrating that "old ICL" is no more. "Our mission is to improve our customers' business, not to sell computer equipment," he said.

In the summer ICL's Pathway consortium won a $1bn (pounds 610m) contract to automate Britain's post offices, and in September it agreed to develop an Internet-based service for the BBC. It has just submitted a bid to take over part of the DSS's computer system in an outsourcing contract worth up to pounds 2bn.