The company, whose share price has plunged by almost 60 per cent in the past year, said it was introducing tougher bonus targets for senior executives and preparing radical cutbacks in support operations.
Brendan O'Neill, ICI's new chief executive, said strengthening the balance sheet was the top priority this year after a series of setbacks in 1998 when US regulators blocked asset disposals worth pounds 1bn.
ICI's aim is to reduce debt from pounds 4.2bn to pounds 3.5bn. Mr O'Neill said ICI still intended to meet its target of raising pounds 5bn from disposals to help pay for the pounds 4.9bn acquisition of Unilever's speciality chemicals business in 1997.
But he gave no indication as to when ICI's remaining industrial chemicals businesses in Runcorn and Wilton would be sold, or how quickly it could resurrect the $1bn disposal of its Tioxide pigments business.
The targets for individual businesses are to raise margins to 15 per cent in speciality chemicals, 10 per cent or more in materials and 9 per cent in paints and decorative coatings.
The final aim is to cut borrowing to 30 to 40 per cent of market capitalisation, now pounds 3.8bn - less than it paid for the Unilever businesses. As margins improve, interest payments would be covered four to five times by earnings, Mr O'Neill projected.
He was speaking as ICI reported a 17 per cent fall in pre-tax, pre-exceptional profits last year to pounds 321m and confirmed it would maintain the dividend at 32p. At that level the dividend is not covered by earnings. The net interest charge was up by pounds 81m to pounds 332m, while the strong pound and Asian downturn together knocked pounds 100m from profits. ICI shares rose 2 per cent to 528p. Analysts are pencilling in full-year profits for 1999 of around pounds 300m.
Alan Spall, ICI finance director, said that for now dividend policy remained "steady as she goes". Some analysts believe ICI will seek to maintain the dividend until it has sold its last bulk chemicals businesses - the petrochemical division on Teesside and the chlorine division at Runcorn. After that it could cut the payout to bring it into line with higher-rated rivals such as Ciba and Clariant.
Mr O'Neill dismissed the idea that ICI could not survive as an independent company and said it had received no takeover approaches from rival chemical groups.
Both main speciality chemicals businesses turned in higher profits, with National Starch recording its 29th successive year of growth and the Quest food flavourings and fragrances division increasing margins to 13 per cent. The industrial chemicals division cut losses from pounds 98m to pounds 41m on turnover down by 26 per cent to pounds 2.46bn.
Mr O'Neill said the move into speciality chemicals meant that ICI's capital spending would fall to about pounds 375m a year compared with pounds 750m in the old ICI.
ICI was planning to make bolt-on acquisitions, he said, but these would be small and carefully selected.