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INTERNSHIP REPORT
ICI Pakistan Limited
Submitted to:
Prof. Dr. Liaqat Ali
Submitted by:
Bilal Ahmed Roll no 99 (Morning)
M.comSession 2009-2011
Hailey College of CommerceUniversity of the Punjab Lahore
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LETTER OF TRANSMITTAL
To: Muhammad Ramzan,
Assistant Professor,Hailey College of Commerce,University of the Punjab, Lahore.
From: Bilal Ahmed
Respected Sir:
Here is the report on ICI Pakistan Limited that has been authorized me by the
department to prepare as a part of my internship assignment on Sept 2010.
As you will see that the report provides a cavernous insight of the organization. I
have discussed the working of concerned department and external and internal
environment of company in detail.
I would like to thank Mr. Saad Karim (Finance Manager), Mr. Khalid Mehmood
Qureshi (Finance Officer), Mr. Muhammad Ramzan (Finance Officer), Mr. Rizwan
Aziez (HR Manager), Mr. Awais Zaid (FTO), Mr. Asif (Cash Officer), Miss Memoona
(FTO), Mr. Amir Jamil, Mr. Waqar Khawaja and others for their invaluable
contribution in making this report. I also appreciate your help and guidance in
preparing this report.
It is a pleasure to accomplish this work and I learned valuable lesson in preparing
formal report. I am submitting this report on September 05, 2011.
Yours sincerely,Bilal AhmedRoll # 99 M.Com
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ACKNOWLEDGEMENT
‘In the name of Allah, the most Gracious, the most merciful’
Every word of praise and gratitude goes to Allah Almighty whose blessings and
bounties are innumerable to realize and count, and due respect to Holy Prophet
(peace be upon Him) who enables us to recognize our creator and whose
teachings are a role model for us to follow in the time of darkness and despair.
All thanks to Allah Almighty, who blessed me with the power and capabilities with
the help of which I am able to successfully complete my internship. I am very much
thankful to my loving parents with their support and prayers I am able to complete
my internship successfully.
I appreciate all those instructors who managed to deliver lectures even they were
packed by the work load. I will not forget to pay regards to all those persons who
helped me learning about the processes even they were not bound to tell me and
guide me, Especially Mr. Khalid Mehmood Qureshi to enhance and polish my skills
and knowledge under a qualitative supervision. Their encouraging response and
guidance to make my internship as a real learning experience. I am grateful for all I
have learnt from them. Internship remained a great experience for me as it added a
lot to my knowledge. It was great experience for me and it helped me in realizing
where my potential lies.
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P REFACE
The internship is an essential part of M.Com degree program because through this
training students come to know the real difference between theory and practice and
they are also introduced to the outside business world. An important requirement of
this training program is to compile a report about the activities of that organization in
which the student has done the internship.
The internship provided me great opportunity to equip myself with knowledge,
techniques, application and tools used in an organization.The purpose of this
Internship Report is to share the process of learning and experience that I
underwent during the course of my Internship with ICI Pakistan Limited.
My Internship was in the Finance Department at the ICI Soda Ash Khewra.
Internship mainly consisted of work related to Finance. During the 6 weeks of
internship I was able to grasp the procedures, processes and dynamic tasks of the
Finance activities.
My this experience in ICI will definitely help me a lot to make my foundation to enter
into a professional field and where I can apply my this experience diligently. This
period has a key importance in my career life because I gained a lot through this
internship and I will try to apply it in my future job. In future correspondence, my
internship period guide me to choose my career path because it enables me to know
the work nature of multinationals. I learnt practically a lot during this internship period
which assists me to choose my practical field in future.
I hope this report will help in understanding various aspects and features of ICI
Pakistan Limited and will be equally important for commerce students and persons
making future careers in multinationals.
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EXECUTIVE SUMMARY
ICI was established in 1926, while it started its Pakistan chapter by establishing
Soda Ash Plant at Khewra, Distt. Jhelum in 1944. It is one of the oldest and fully
automated companies of Pakistan. ICI has currently five business in Pakistan in
which Soda Ash Business is the oldest and important one.
ICI was incorporated in 1953 and listed on Karachi Stock Exchange in 1957 as
Khewra Soda Ash Company and this name was changed to ICI Pakistan Limited in
1987. Now ICI is operating as a subsidiary of AkzoNobel which is the chemical
industry leader around the globe.
Main purpose of the internship was to extract practical knowledge by working in a
dynamic organization in order to apply the knowledge acquired during M.Com
Program. Report include in depth analysis of the organization and carry financial,
technical, and managerial aspects which have been evaluated to analyze the current
position of the organization.
I have evaluated the company by different techniques like financial analysis and
SWOT analysis by calculating Profitability, Activity and Debt ratios. These ratios are
showing constructive signs for the future prospects of the company. Management is
capably utilizing the assets of the company in order to generate sales. Overall
financial position is adequate. Further supportive material regarding the financial
situation of the company is also included in the report.
I am sure that this report will provide you a complete and clear image of
organization.
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VISION STATEMENT
Often people achieve only incremental progress, because their view of
tomorrow is determined by what they see today. We believe the future belongs
to those smart enough to challenge it. We believe that real progress belongs
to those who not only think with courage, but also have the courage to deliver
on the thought.
Tomorrow’s answers, delivered today.
What drives us is knowing that what is good for our customers today is not
necessarily good enough for them tomorrow. What excites us is asking the
unasked question. What inspires us is seeing the opportunity others cannot.
What unites us is the intelligence to deliver where others have not. This
benefits our customers because we sustain their future competitiveness and
meet the consumers’ unspoken needs. This ambition defines us. This is the
way we work. This is why we come to work.
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MISSION STATEMENT
To be the partner of first choice for customers and suppliers, ensuring
sustained leadership positions in the markets where we compete, delivering
long-term business value through a high performance culture, innovation,
ethics and responsible care.
Strategic Thrust
To achieve our mission we will:
Give highest priority to health, safety, environment and ethical matters
Ensure our products deliver maximum value to customers by maintaining
dependable supply, consistent quality, and reliability
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Uphold excellent service levels to foster long-term relationships with
customers and suppliers
Achieve the highest possible operating efficiencies and lowest costs, and
expand the business through selective capacity increase and new product
launches
Develop and retain a team of highly capable people dedicated to delivering
the mission
Statement from Chief Executive
Our rigorous efforts to maintain our competitiveness were underpinned by a strict
focus on operational effectiveness, specifically concentrated on “Customers, Costs
and Cash”. We can look ahead to 2011 with confidence, hope and resilience. We
know that there are challenges ahead, but we also know that we have the right
resources to meet those challenges.
Board of Directors
ICI Board consists of ten members, headed
by the Chairman of the board. Currently is
comprised of six non-executive directors and
four executive directors. Mr. M. J. Jaffer (non-
executive directors) is the current chairman of the board and Mr. Waqar A. Malik is
the chief executive of the company.
Main responsibilities of the board is to guide the company and form policies
consistent with objectives of the company i.e. being the industry leader in creating
value for the customers and shareholders.
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Executive Management Team
The management of ICI is done through an executive team headed by the Chief
Executive of the company. Team includes head of the management team from each
business (generally Vice President or General Manager) and also includes Chief
Financial Officer and G.M. Human Resources. So the team of eight members is
formed which manage the overall business of the ICI Pakistan Ltd.
The Executive Management Team is responsible for delivering the Group’s two
major strategic thrusts of driving performance and reshaping the portfolio. The
members of the team have an in-depth experience of managing complex
international businesses and functions within ICI and other leading companies.
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ORGANIZATIONAL CHARTSODA ASH BUSINESS
BUSINESS STRATEGY OF ICI SODA ASH
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VICEPRESIDENT
OperationsManager
ProductionManager
MedicalSuperin-
tend
H.RManager
MaterialsManager
MarketingManager
FinanceManager
TechnicalManager
FinanceDept.
Accounts & Store
I.T.Dept.
Right PeopleRight PlaceRight Time
Right Motivation
Employee Communicat
ion
Succession
Planning
Job ProfilingQualification
SkillsExperience
Competencies
Recruitment Appointmen
tCarrier
DevelopmentPotential Appraisal
Employee
Information
system
TrainingLearning And
Education
Performance Managemen
t
Reward and
Recog-nition
Specialist HelpChange
ManagementDispute
ResolutionDiversity
Management
People Performing to Full potential
Output Aligned to Business Objectives
Organization and workforces Requirement
Business Strategy
Technical
Engineering
INTRODUCTION
ICI has consistently developed new and innovative areas of business since its
formation in December 1926, by the merger of four of the largest chemical
companies in the UK. ICI today is a collection of world-class businesses, many of
them leaders in their sectors. They are strongly led, technologically sophisticated
with healthy and sustainable long-term growth prospects.
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ICI Pakistan Limited was set up as a public limited company in Pakistan in 1952.
ICI’s presence in this part of the world, however, predates the formation of the public
limited company and indeed, Pakistan itself. The Khewra Soda Ash Company, a
predecessor of ICI Pakistan Limited, set up a soda ash manufacturing facility in
Khewra in 1944 with a capacity of 18,000 tonnes per annum. This facility was sited
next to the salt range as rock salt and limestone; two key raw materials for
manufacturing soda ash were available here in abundance.
Today ICI Pakistan’s five businesses, Polyester, Soda Ash, Paints, Chemicals
and Life Sciences, manufacture and sell a range of industrial and consumer
products. These include Polyester Staple Fibres, POY Chips, Light and Dense Soda
Ash, Sodium Bicarbonate, Paints for the Decorative, Automotive, Refinish segments,
for Industrial use and Projects, Specialty Chemicals, Polyurethanes, and Adhesives
and arranges manufacture on a toll basis of Pharmaceutical and Animal Health
products. It also markets Seeds and in addition is engaged in trading in various
specialized chemicals for use in industries in Pakistan.
In 1995 ICI Pakistan Limited set up a USD 490 million PTA manufacturing facility at
Port Qasim, near Karachi, which was commissioned in 1998. In 2000, the business
was de-merged to form Pakistan PTA Limited, which was at the time a subsidiary of
ICI Plc UK.
The turnover of ICI Pakistan Limited in 2010 was Rs 39,533 million and the profit
before tax crossed Rs. 3,732 million. It is one of the largest quoted companies on
the Karachi, Lahore and Islamabad Stock Exchanges with a paid up share capital of
Rs 1,388,023,000. The company has around 1300 permanent employees
Company from Foundation till Now
Year Achievements
1944It establishes its first manufacturing site for the production of Soda Ash at Khewra.
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1953The Khewra Soda Ash Company is Incorporated as a Public Limited Company.
1957The Khewra Soda Ash Company is listed on Karachi Stock Exchange (G) Limited.
1965ICI Plc acquires 50% shares of Fuller Paints
1966The name of Khewra Soda Ash Company changes to ICI Pakistan Manufacturers Limited.
1966ICI Pakistan Manufacturers Limited increases capacity of Soda Ash Plant to 45,000 tons.
1968ICI Pakistan Manufacturers Limited commissions its Speciality Chemicals Plant at Karachi.
1970ICI Pakistan Manufacturers Limited sets up its Pharmaceutical Processing Unit in Dhaka (formerly East Pakistan)
1973Fuller Paints changes its name to Paintex Limited.
1979ICI Pakistan Manufacturers Limited increases capacity of Soda Ash Plant to 65,000 tons.
1980ICI Pakistan Manufacturers Limited is listed on Lahore Stock Exchange (G) Limited.
1982ICI Pakistan Manufacturers Limited sets up Polyester plant at Sheikhupura with a capacity of 12,000 tons.
1982ICI Pakistan Manufacturers Limited Commissions new Dense Ash Plant at Khewra.
1985Imperial Chemicals Industries (Pakistan) (Private) Limited and Paintex Limited merge into ICI Pakistan Manufacturers Limited.
1987The company name changes to ICI Pakistan Ltd.
1987ICI Pakistan increases capacity of Polyester Plant to 19,000 tons.
1991ICI Pakistan PowerGen Limited is incorporated as a Public Limited Company.
1991ICI Pakistan launches its Seeds Business.
1991ICI Pakistan Foundation is registered as a charitable trust.
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1991ICI Pakistan increases capacity of Soda Ash Plant to 100,000 tons.
1992ICI Pakistan Paints Business introduces Dulux Range of natural white colours with added fragrance.
1993ICI Pakistan commissions a plant for manufacturing of specialized automotive paints.
1993ICI Pakistan adds Polyol blending facility to its Speciality Chemical Plant.
1994ICI Pakistan increases capacity of Soda Ash plant by 50,000 tonnes to 185,000 tonnes.
1994ICI Pakistan marks the 50th anniversary of Soda Ash production at Khewra.
1995ICI Pakistan’s operating profit crosses the one billion rupee mark for the first time.
1995ICI Pakistan commissions Sodium Bicarbonate plant.
1995ICI Pakistan launches SHE (Safety, Health & Environment) Challenge 2000.
1996ICI Pakistan increases Polyester fibre capacity to 60,000 tonnes and polymerization capacity to 91,000.
1997ICI Pakistan Limited is listed on Islamabad Stock Exchange (G) Limited.
1998ICI Pakistan commissions its PTA plant.
1999ICI Pakistan is awarded second position for “Best Corporate Accounts” in the non-financial sector for its 1998 Annual Report by the South Asian Federation of Accountants.
2000ICI Pakistan PTA Business demerges into a separate entity, Pakistan PTA Limited.
2001ICI Pakistan launches ERP (SAP) implementation.
2002ICI Pakistan increases capacity of Polyester Plant by 44kpta completed through Fayzan Manufacturing Modaraba.
2004Zestril of ICI Pakistan’s Pharmaceutical Division become the top selling ace-inhibitor in Pakistan.
2006As a part of an asset modernization and improvement plan the Polyester Business commissions a sixth processing line.
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2006ICI Pakistan launches seven core values – set of belief and principles, which the employees live and work by.
2006ICI Pakistan crosses the Rs. 2 billion mark in operating result for the first time.
2006ICI Pakistan’s Pharmaceutical Division enters the anti-infective segment with its first branded generic “Icef”.
2006ICI Pakistan achieves compliance with Section 404 of the Sarbanes Oxley Act.
2006ICI Pakistan’s Paints business launches is first super premium range – 5 in 1 technology brand Dulux Pentalite Classic.
2007ICI Pakistan announces 65kpta expansion of its Soda Ash Plant.
2007ICI Pakistan is awarded the Third Best Corporate Report award for the year 2006 by the Institute of Chartered Accountants of Pakistan an the Institute of Cost and Management Accounts of Pakistan.
2007ICI Pakistan completes 50 years of continuous listing on Karachi Stock Exchange (G) Limited.
2008Akzo Nobel becomes the ultimate holding company of ICI Pakistan Limited.
2009MAP excellence award.
2010Enabling smarter business collaboration through tools such as video conference, web meetings etc.
2010Developing McAfee End Point to enhance security of information assets.
Code of Conduct & values
We have always had a strong sense of business principles and high ethical standards for the conduct of our business. Our business principles and ethical standards are enshrined in the ICI Pakistan Code of Conduct.
A brief overview of the code
Business principles
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Each employee should implement our core values, comply with and observe applicable laws, support fundamental human rights and give due regard to health, safety and environment
Business integrity
Bribery and any other form of unethical business practices are prohibited
We promote free enterprise and require strict compliance with competition
laws
As responsible corporate citizens, we encourage participation in community
activities and take all measures for the safety and health of our employees as
well as for the protection of the environment
Employees are expected to maintain confidentiality and to act in the
Company’s interests at all times
Company responsibilities
The Code encourages us to:
adopt the spirit of open communication
provide equal opportunities and a healthy, safe and secure environment
ensure the rights of employees to join unions/ associations
protect personal data of employees
engage in an active performance and development dialog
Employee responsibilities
The Code provides employees guidance on their responsibilities.
Media relations and disclosures
Inside information
Corporate identity
Protecting our intellectual property
Internet use
Business travel policy
Prohibition on substance abuse
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Values
Focusing on our customer’s future first
Embracing entrepreneurial thinking
Developing the talents of our people
The courage and curiosity to question
Integrity and responsibility in our actions
Company information
Board of Directors
M J Jaffer Chairman Non-Executive
James R Rees Non-Executive
Waqar A Malik Chief Executive
Feroz Rizvi Executive
Mueen Afzal Non-Executive
Rogier M G Roelen Non-Executive
Ali A Aga Executive
M Nawaz Tiwana Non-Executive
Bart Kaster Non-Executive
Derek W Welch Non-Executive
Audit & Remuneration Sub Commitees of the Board
Audit sub committee
M J Jaffer Chairman Non-Executive
Mueen Afzal Non-Executive
Bart Kaster Non-Executive
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Remuneration sub committee
M Nawaz Tiwana Chairman Non-Executive
James R Rees Non-Executive
Chief Financial Officer
Feroz Rizvi
Company Secretary
Saira Nishtar
Executive Management Team
Waqar A Malik Chief Executive
Suhail Aslam Khan Vice President, Polyester Business
Ali A Aga Vice President, Soda Ash Business
M Asif Malik Vice President, Corporate HR & Life Sciences
Khalid Alvi Vice President, Chemicals Business
Feroz Rizvi Chief Financial Officer
Jehanzeb Khan Vice President, Paints Business
Bankers
Askari Bank Limited
MCB Bank Limited
Bank Al Habib Limited
Meezan Bank Limited
Bank Alfalah Limited
National Bank of Pakistan
Citibank N.A.
Oman International Bank
Deutsche Bank
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AG Samba Bank Limited
Faysal Bank Limited
Standard Chartered Bank (Pakistan) Limited
Habib Bank Limited
United Bank Limited
HSBC Bank Middle East Limited
Habib Metropolitan Bank Limited
Auditors
Internal Auditors
Ernst & Young Ford Rhodes Sidat Hyder, Chartered Accountants
External Auditors
KPMG Taseer Hadi & Co., Chartered Accountants
Registered office
ICI House, 5 West Wharf, Karachi-74000.
Tel # 111-100-200, (021) 32313717-22
Fax # 32311739
Website: www.akzonobel.com/pk
Email: [email protected]
Shares Registrar
FAMCO Associates (Pvt) Ltd
1st Floor, State Life Building 1-A,
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I.I Chundrigar Road, Karachi-74000
Tel : (021) 32427012, 32426597, 32420755, 32475606, 32425467
Fax : (021) 32426752
About AkzoNobel
Look around you and chances are you'll see AkzoNobel's influence. The company’s
products can be found everywhere from the Beijing Olympic arenas and Sydney
Harbor Bridge to, quite possibly, the house next door to you.
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AkzoNobel is the largest global paints and Coatings Company and a major producer
of specialty chemicals. Headquartered in Amsterdam, the Netherlands, AkzoNobel is
a Global Fortune 500 company consistently ranked as one of the leaders on the
Dow Jones Sustainability Index. With operations in more than 80 countries, it has
55,000 people around the world committed to excellence and delivering ‘Tomorrow’s
Answers Today™.
AkzoNobel supplies industries and consumers worldwide with innovative products,
and is passionate about developing sustainable answers for its customers. Its
portfolio includes well known brands such as Dulux®, Sikkens®, International® and
Eka®. ICI Pakistan was acquired by AkzoNobel on January 2, 2008. We are proud
to be part of a group that is committed to innovation, introducing new ideas and
developing sustainable answers for our customers every day. We look forward to a
bright and exciting future as one strong company with the drive to deliver
‘Tomorrow’s Answers Today’™.
History Of AkzoNobel
AkzoNobel has a long and distinguished history. Since our inception in 1646 we’ve constantly delivered technical and product innovation. For example, in the 19th century we pioneered industrial-scale chemical manufacture. More recently we’ve led the way with high tech coatings and artificial fibers.
Here are some more of the highlights over the years:
1646
Bofors forge is founded in Sweden.
1777
Det Holmbladske Selskab, now Sadolin, is founded in Denmark.
1792
Painter and decorator Wiert Willem Sikkens starts making Sikkens lacquers in the Dutch town of Groningen.
1871
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KemaNobel is established in Sweden. More than a hundred years later, in 1984, KemaNobel will merge with Bofors to form Nobel Industries, which will in turn be acquired by Akzo in
1895
Alfred Nobel (the man behind the Nobel Prize) founds Elektrokemiska Aktiebolaget – known as Eka – in Bengtsfors, Sweden. Its aim is to make chlorine and alkali. Today Eka Chemicals is AkzoNobel's Pulp & Paper Chemicals business.
1918
Koninklijke Nederlandse Zoutindustrie (KZO) kick-starts the Dutch salt industry in response to salt shortages during World War I.
1923
Saal van Zwanenberg establishes Organon to produce insulin from the pancreases of animals.
1968
UK man-made fiber company Courtaulds acquires International Paints.
1969
Algemeene Kunstzijde Unie NV (AKU) merges with Koninklijke Zwanenberg Organon (KZO) to form AKZO.
1994
Akzo and Nobel Industries merge to form AkzoNobel.
1998
AkzoNobel acquires UK company Courtaulds. Their products include high-tech industrial coatings and man-made fibers such as Courtelle and Tencel.
2007
AkzoNobel sells Organon BioSciences NV to Schering-Plough Corporation.
2008
AkzoNobel acquires Imperial Chemical Industries PLC (ICI). Please find all reports relating to the former ICI
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Walmart selects AkzoNobel as primary paint supplier for US stores
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Acquisition by AkzoNobel
It was announced on 13th August 2007 that Akzo Nobel and ICI Plc. had reached an
agreement on the terms of a recommended cash offer by Akzo Nobel for ownership
of ICI Plc. In October 2007, an agenda and accompanying Shareholder’s Circular
were published stating that, subject to the approval of the shareholders of Akzo
Nobel and ICI Plc, completion of the ICI deal was to take place on 2nd January, 2008.
During the month of November, Extraordinary General Meeting of the shareholders
of both Akzo Nobel and ICI Plc were held, during which Akzo Nobel and ICI Plc
shareholders voted 79% and 92.5% respectively in favor of the acquisition. On 2nd
January, 2008 the acquisition of ICI Plc by Akzo Nobel was officially completed and
the two companies became one.
On 2nd January 2008, the acquisition of ICI by Akzo Nobel was officially completed
and the two companies became one creating a leading industrial company in coating
and chemicals. All businesses of ICI Pakistan have become a part of Akzo Nobel’s
continuing coating and chemicals portfolio. With a sold standing in the market, ICI
Pakistan are excited to be a part of this new company and are well posed to capture
the dynamic avenues it offer for future growth in coatings and chemicals and are set
to become bigger, better and more focused ever before.
Akzo Nobel has the distinction of being Fortune 500 Company and listed on the
Euronext Amsterdam Stock Exchange. Complementing its long history dating back
to 1777 is the endless application of Akzo Nobel’s products across many
downstream industries. Akzo Nobel is the Chemicals industry leader on the Dow
Jones Sustainability Indexes as well as being included on the FTSE4 Good Index.
The new company has a presence in over 80 countries in the world, and is the
largest single industrial Company in decorative coatings. It stands on a solid platform
of combined global presence, technologies, products, brands and expertise that will
benefit their customers and drive the new Company to even greater success.
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ICI Pakistan Businesses
Soda Ash Business:
Soda Ash Business produces and caters to approximately 70% of the Country’s
requirement for this commodity. Soda Ash has a wide variety of applications in
construction, hygiene, packaging and the paper industry and, therefore, it is an
important intermediate product to the end manufacturing industry. Situated in
Khewra the plant began commercial production in 1944.
Polyester Business:
The Polyester Business manufactures and markets polyester staple fibre (PSF), a
synthetic cotton, mainly used in the textile industry for producing blended (with
cotton) polyester rich yarn, fabrics and clothing. ICI Pakistan started
Paints Business:
The Paints Business operates in the Decorative, Industrial and the Refinish
segments. Wide range quality products and services, innovation and a legacy of
strong brands such as Dulux have been the foundations of this enterprise. Based in
Lahore, the Paints plant was acquired by ICI Plc in 1965.
Life Sciences Business:
The Life Sciences Business comprises three divisions: Pharmaceuticals, Animal
Health and Seeds. The Pharmaceuticals Division markets a portfolio of leading
prescription drugs sourced from renowned principals and has launched a range of
branded generics. The Animal Health Division markets superior quality veterinary
medicines for livestock and poultry from world-renowned companies as well as some
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of its own brands. The Seeds Division is one of the leading providers of hybrid seeds
in the Country and a market leader in both the hybrid sunflower and fodder
segments.
Chemicals Business:
The Chemicals business comprises a unique and diversified portfolio encompassing
General Chemicals, Specialty Chemicals, and National Starch products. The
General Chemicals Business imports, blends, distributes and sells over 250
products/ variants from sixteen well-reputed international trading partners serving
every key industry in Pakistan. The Specialty Chemicals Business manufactures and
markets textile auxiliaries, adhesives, paint lattices, crop protection emulsifiers and a
range of process chemicals. Based in Karachi the plant has been operational since
1968.
PRODUCTS
Polyester Fibres
SD- Semi Dull PSF
SCD - Single Component Dyeing
SDOB - Semi Dull Optical Bright
EHT - Extra High Tenacity
Super Bright
Low Pill
1.0 Denier Microfibre
Soda Ash
Light Soda Ash (Na2CO3)
Dense Soda Ash (Na2CO3)
Sodium Bicarbonate (NaHCO3)
Paints:
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Decorative Refinish & Industrial Automotive
Chemicals: Fuel Oil Petrochemicals Motor Oil Additives
Paint Additives
Water Treatment Additives Adhesives Chlorinated Solids Ceramic Additives Acrylic Plastics Hydregenation Additives Explosives PVC Stabilizers Iron Coatings Filteration Aids Textile Auxiliaries Heat Treatment Salts Color Additives PVC Foaming Agents
Life Sciences:
Life Sciences-Pharmaceuticals Division
CARDIOVASCULAR
Tenormin
Tenoret 50 Zestril Zestoretic Inderal Etizem
ONCOLOGY Nolvadex Zoladex Arimidex Cosadex
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NSAIDS
Proxen
Synflex
ANAESTHETIC Diprivan (EDTA)
ANTIBIOTIC Meronem
CNS Zomig Seroquel
ANTHELMINTIC Ketress
GASTRO-INTESTINAL Etipro
RESPIRATORY Accolate
ANTI-INFECTIVES Icef
Life Sciences-Animal Health Division ANTHELMINTICS
Nilverm Nilzan Nilzan Bolus Zanil Systamex Oxfenda XC Endectin
INTRAMAMMARY
Spectrazol
ANTIPROTOZOALS Butalex Imizol
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ANTIBIOTIC Amoxivet
VACCINE Decivac FMD
INJECTABLE Somatech
Life Sciences-Seeds Division CANOLA
Hyola 401
CORN SEED (For Spring Season) Garst 8464 Garst 8288
CORN SEED (For Autumn Season) Hycorn 11 Plus Hycorn 984
SUNFLOWER Hysun 33 Hysun 38 Hysun 39
FODDER Sweet Jumbo Rambo
Soda Ash Business
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"We will remain market leaders in Soda Ash and derivatives business in
Pakistan by strengthening our customer base while being the lowest cost
producer in the region and the most reliable supplier of quality products."
ICI Pakistan’s Soda Ash Business caters to approximately 70% of the Country’s total
requirement for this commodity. The Business mainly uses indigenous raw materials
and locally made equipment, thereby accruing savings to the Nation’s foreign
exchange reserves through import substitution. The major raw materials used are
Salt, supplied by the Pakistan Mineral Development Corporation from the Khewra
mines, PUNJMIN (Punjab Mineral Development Corporation) and other private
suppliers, and Limestone from ICI Pakistan’s own quarries in Tobar and Dandot as
well as some private suppliers.
In addition Coke, an essential raw material, is being imported from China because of
its non availability from local supplier Pakistan Steel Mills. The water for the plant
comes from Watli, a natural spring as well as the river Jhelum. The plant generates
approximately 11.0 MW of its own electric power and uses around 1.0 MW of
WAPDA power, which is backed up by diesel generators.
As the production capabilities have changed, so have the various markets and
applications for Soda Ash. Today Soda Ash consistently ranks as one of the top 10
inorganic chemicals produced in the world and is an essential raw material to a
variety of industries. In the Pakistani market it is largely consumed as a raw material.
Soda Ash is used as a builder or filler in formulation of soaps, detergents, and other
cleaning compounds.
The principal use of Soda Ash in the glass industry is to bring down the melting
temperature of silica sand (the main raw material). Soda Ash, with its low melting
point and reactivity, acts as a flux for other ingredients, primarily Silica and other
oxides, allowing them to be melted at reasonable temperatures. In the paper
industry Soda Ash is used in the preparation of the sodium sulphite buffer liquid
used in the pulp manufacturing process. Soda Ash even finds application in the
water treatment segment by adjusting the pH of water when it is in acidic condition.
ICI Pakistan’s Soda Ash business is committed to remain the preferred supplier for
its customers and strives to maintain its competitive advantage through the
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relentless pursuit of manufacturing excellence and by delivering quality products
through a world-class plant.
The Soda Ash market in Pakistan is continuing to grow and ICI’s experience in the
Soda Ash Business in these 62 years is an asset to the Company in the face of
changing markets and emergent competition. The Company uses this competitive
advantage along with continued improvement in efficiencies, control over fixed costs,
improved productivity and above all a sustained market share and strong customer
loyalty to continue to be the market leader in the Soda Ash industry in Pakistan. ICI
Pakistan’s Soda Ash plant expansion and modernisation at Khewra has placed the
Business in a position of strength to face these challenges.
The Company continues its endeavour to make a meaningful contribution to the
people of Khewra in the health, education and environment sectors. This symbolises
ICI’s commitment to growth and success and demonstrates its continued focus
towards improving the quality of service to its customers and the community.
- 33 -
SSH&E
EthicsValuing People
ICI Pakistan Limited, Soda Ash Business
We Live Our Values
VALUES
Employees of ICI Pakistan work and live by the following values based on the belief
and principles. These are:
The foundation of our organization
Not open to compromise
- 34 -
BusinessExcellenc
e
CustomerObsession
Trans-parency
Innovation
Timeless
All equal in importance
1: SSH&E - “Nothing We Do is Worth Getting Hurt for”
2: Valuing People – “Our Competitive Edge”
3: Innovation – “Creativity for Improvement”
4: Business Excellence – “Better, Faster and Best Value”
5: Customer Obsession – “They Pay Our Bills”
6: Transparency – “Beyond Reproach”
7: Ethics – “Un-compromising Integrity”
Our Behaviour (ICI Pakistan Ltd)
ICI believes that based on our values, our behaviour is consistent and corresponds
to the following:
Acting Responsibly
Responsibility
Boldness
Development Orientation
Intellectual Honesty
Meeting Commitments
No Shortcuts
Respect for the Individual
Safety Consciousness
Team-orientation
Tolerance
MARKETING
- 35 -
Marketing Environment
Competition:
Soda Ash is produced on the base of mass scale production in order to achieve low
cost because in this sector, low cost matters a lot. That’s why it is not such a
segment in which many producer enter because if this happen, every one will have
either surplus production if he operates on mass production or have high cost in he
operates as per demand of the market. That’s why in this sector, mainly there are
two industries which are production Soda Ash. First one is the ICI Pakistan Ltd,
Soda Ash Business, Khewra and second one is the Olympia Chemicals Limited.
So ICI the only competitor ICI has to face is the Olympia Chemicals Ltd who has
setup his plant in Warcha Distt. Khoshab. ICI has a clear domination in this segment
over his competitors due to many reasons. First is that ICI has established its plant
in 1944 while Olympia is new in this segment. Further their capacity is only 140
tons/day which is very less than the ICI. That’s why market share also reflects this
distinction and ICI holds 70% of the market, while Olympia has only 30% of the
market share.
Target Market
(a) Consumer or Industrial: Soda Ash is mainly an industrial product, that’s why
target market for the Soda Ash is the industries and especially the Distributors
and the Dealers. Mostly market is in the hands of ICI and there is no close
substitute of the products, that’s why consumers are targeted for the product.
Further industries which do not require it in huge amounts also prefer to buy it
from the dealers. That’s why main target market is the dealers and industries
which require it in huge amounts and consumers are not influenced through
mass media.
- 36 -
Another thing is that two products out of three are industrial nature, and only
Sodium Bicarbonate is used by home consumers as Baking Soda. That’s why
industry has more importance than the house holds.
(b) Buying Characteristics: Soda Ash is purchased in bulk amount by the
industries and dealers. Purchase orders are not of small quantities (e.g. 5, 6
bags) but are in tons. Transportation also matters because plant is situated in
Khewra. So purchase orders are usually in tons.
(c) Market Potential: Due to high growth in the industrial sectors in Pakistan,
there is huge market potential. Soda Ash is raw material for different
industries, e.g. Paper, Textile, Detergents, FMCG Products, etc. That’s plant
operates at its full capacity and when one expansion project completes,
second starts.
Product
ICI Pakistan produces the following products at the
Soda Ash Plant in Khewra:
Light Soda Ash (Na2CO3)
Light Soda Ash is used as a raw material in Detergents, Papers,
Silicate, Chemicals and Textile Industries.
Dense Soda Ash (Na2CO3)
It is used a raw material in Glass Industry
- 37 -
Sodium Bicarbonate (NaHCO3)
Used as a baking soda
Poultry, Cattle Feed, Leather Tanning and Textiles.
Classification:
Soda Ash is generally classified as an Industrial Product. It includes two products
mentioned above. Two out of three and generally used in industrial. Only one has a
limited use as a Baking Soda in house holds.
Packing and Labelling:
As far the packing and labelling is concerned, all three
types of Soda Ash are packed in Poly Propylene Bag.
Bags are purchased from foreign countries in bulk
quantities usually in more than .2 million while they are printed by the plant itself
during the packing. Each bag is contains information regarding its category, its
weight, ICI logo and “Made in Pakistan” logo.
However there is difference in the Packing weight of the all three types. ICI recently
has issued new packing. Weight of their packing is as follow:
Type Weight Size of Bag
Light Soda Ash 50 Kg 24 x 43 inch
Dense Soda Ash 50 Kg 20 x 35 inch
By Corp (Metha Soda) 25 Kg 19 x 26 inch
- 38 -
Distribution
ICI has more than 70% share in the Soda Ash business in Pakistan. This is because
of its vast market coverage through the powerful distribution network of its
distributions. Mainly Soda Ash is mainly distributed through the network of
distributors through Pakistan. Different regions are assigned to different distributors.
They purchase Soda Ash from ICI and distributed it to different consumers and
industries in their areas which contact them for sale.
Along with the distribution network, big industries also purchase directly from the ICI
as they need it is bulk amounts. These include glass and chemicals industries. They
directly contact sale department of the ICI Soda Ash business and purchase it from
there at market price or if they is a discount agreement then at discounted price
rather than the distributors.
This is al for the local sale. However ICI is also involved in international sale. Further
ICI is also distributor of the some Soda Ash manufacturers in Pakistan in order to
fulfil the demand of soda ash in Pakistan and abroad. Sale agreement is the duty of
marketing department. Then purchase department arrange the delivery of the soda
ash from Khewra to the destination with help of the Karachi Head Office. Channel is
selected with the mutual understanding with the customer depending upon the need
of the customer i.e. Urgent or normal. On this base it is decided whether it would be
sent through Air Mail, or through Voyage. Further the clearing agents and shipping
companies are selected and consignments are fully insured.
Pricing
Prices are fixed at cost plus margin. For distributors, a margin is fixed on the market
price. They get it at discounted price and sale it on the market price to the
consumers. However ICI also has discount agreements with its value able
customers. For that company offers them a discount percentage for some period
(i.e. 6 month, 1 year) etc. and this discount is carried on with mutual understanding.
- 39 -
Promotion
ICI has a proper marking department with a fully experienced team. A proper budget
is allotted for the sale activities. However sale is not done through advertisement in
news papers, television, radio etc because of the nature of the products. That’s why
selling are mostly based on relationship with the dealers.
However company spends a lot on building the image of the company. For that a lot
of activities are done in fulfil the corporate social responsibilities. Through this the
brand name is introduced with the people and image of the company is
strengthened.
Meeting of the dealers is arranged frequently. Further best performing dealers are
also awarded cash prized and trips to different local and foreign countries. This
boosts up their moral and they deliver their best in order to achieve high targets.
Customer Satisfaction Programme:
Customer satisfaction teams are formed to tackle quality related issues prompted by
customer’s complaints. Each team comprise of operators, technicians, contract staff
and mangers and are allocated different aspect of quality control in order to focus on
all problem areas. The teams met on a monthly basis and implement original
solutions to improve quality. This focused approach pay off in the form of reduced
number of complaints and result in end user satisfaction.
PRODUCTION AND OPERATIONS
Products:
- 40 -
Soda Ash Plant manufacturers three type of core products:
Light Soda Ash (Na2CO3)
Dense Soda Ash (Na2CO3)
Sodium Bicarbonate (NaHCO3)
Production System:
ICI’s Soda Ash production plant is situation in Khewra Distt. Jhelum. In this system,
main raw materials are Salt, Lime Stone, Coke and Ammonia Anhydrous. Due to
location of the plant in Khewra most raw materials are readily available. Further ICI
has his own quarry for limestone production.
In Soda Ash production, these raw materials are converted into Soda Ash through
different processes. Currently plant is operating at a capacity of 235,000 tons per
year and an expansion project of 50,000 tons is recently completed.
Further ICI Pakistan Ltd has further started expansion of its Soda Ash plant by an
additional 65,000 tons. This further investment in Soda Ash is fully in line with ICI
Pakistan’s continued commitment towards the development of import substitution
industries to cater to the local demand.
The total nameplate capacity of the plant after completion of the current expansion
will be around 350,000 tons in 2009. ICI conveyed the information to investors
presumably under the listing regulations of the stock exchangers.
- 41 -
Solvay Process for Soda Ash Manufacturing
- 42 -
Raw Materials:
Salt (NaCl): Salt is the main raw material for the Soda Ash production. So salt is
purchased main from the PMDC (Pakistan Mineral Development Corporation) in
Khewra and some portion is also purchased from the private mines in Khewra
and nearby areas. Further ICI also has an agreement to collect the rain water
that is accumulated in the pools of the Salt Mine of Khewra. This saves a lot of
time and working for the plant.
Lime Stone: Lime stone is partially collected from the own Quarries at Tobar &
Dandot. ICI has acquired the quarries in order to get the high quality lime stone
timely and rest is purchased from the local contractors and miners. 30-35 days
buffer stock is always maintained at the work.
Coke: Coke is purchased from Pakistan Steel Near Karachi on Advance
payment through Karachi Head Office. Steel is purchased and handed over to
contractors for processing as this coke is 80mm in size. They process it and
required size coke (30-35mm) is sent to the plant. 35-40 days stock is always
maintained at the plant.
Ammonia Anhydrous: It is purchased from the fertilizer plant having surplus
stock. It is generally purchased from M/s Dawood Hercules & Pak China
Fertilizers, Haripur.
Other Chemicals: Further some other chemicals are also involved which are
Sodium Sulphide
Ammonium Sulphate
Hydro Caloric Acid
Nalco Water
These chemicals are first purchased from the local market. Some of them are not
available in Pakistan. So these are purchased from foreign countries.
- 43 -
Use of Computer / Technology in the Production Environment:
There is a lot of computer technology involved in the production. There is a
control room form where production activities are observed and controlled.
Further system is greatly influenced by the computer and robot technology and
some process are based on Mechatronics technology which is automated robot
system controlled by the centre control room.
Quality Assurance System:
Quality assurance is an important part of the productions. Quality Insurance
Team make is sure that processes are as per quality standards. Production is
also observed and a fixed portion of each batch is tested in order to assure
quality. ICI have high quality standards and never compromise on quality.
Warehousing and Storage:
Ware house is also located at the site area. When Soda is manufactured, it is
packed and labelled. Then these bags are brought in the ware house where they
are recorded and stored and then sent to the different destinations in the country
and outside the country.
SSH&E Programme (Safety, Security, Health & Environment)
Goal of ICI is to be the industry leader in the production and sale of products,
which benefit society. They provide a safe and healthy work place for both staff
and contractors, and act responsibly towards the communities and environment
in which they operate.
This is achieved by the continuous improvement of their first class SSHE
performance through corporate leadership, the dedication of their staff and the
application of the highest professional standards in their work.
- 44 -
SSHE Logo:
Good, safety, health and environmental performance
are essential to the long-term success of ICI.
Recognizing this and to build on the progress already
made, the SHE symbol has been developed to
encourage a unity of purpose across the Group.
There are three key elements to the symbol:
Unity of Purpose: Represented by the sculpture’s form of a circle to
signify the common SHE goals of the businesses and the ICI Group
worldwide.
People: Depicted by the face, representing ICI staff, all intent on
improving all aspects of safety, health and environment, and supporting
strong ethical values.
Care: The hand represents care for oneself, for others and the
environment. It shows personal responsibility.
SSHE Policy:
ICI will ensure that:
(a) Its activities are conducted safely;
(b) The health of its employees, its customers and the public will be protected;
(c) Environmental performance will meet contemporary requirements;
(d) Its operations are run in a manner acceptable to the local communities;
(e) Employees, capital, information and other assets will be protected from
deliberate harm, damage or loss.
SSHE OBJECTIVES:
- 45 -
Safety
Health
Energy
Greenhouse Gases
Ozone Generators
Water use
Aquatic Oxygen Demand
Non-hazardous Waste
Bio diversity
Land Assessment
Reduce Hazardous Substances to Air
Acid Gases
Systems
Distribution Incidents
Suppliers
FINANCE
- 46 -
Major Highlights of 2010
2010 turnover growth at 22 percent
2010 gross profit growth at 18 percent
2010 profit after tax growth at 19 percent
2010 earnings per share: Rs 17.50 (2009: Rs 14.73)
Total dividend per share for 2010: Rs 17.50 (2009: Rs 8.00) proposed
Turnover
- 47 -
(Rs. Millions)
Gross Profit(Rs. Millions)
RATIO ANALYSIS
- 48 -
Ratio refers the one number in terms of another. The purpose of ratio analysis
depends upon the event for which the analysis is made. Management likes
to know about the operational efficiency and think of such ratios as return
on investment, turnover of fixed assets, and net profit to sales etc.
Creditors like to know the ability of the company to meet its current
obligations and therefore, think of current and liquid ratios, turnover of
receivables, and coverage of interest by the level of earnings. So ratio
analysis is important from all perspective.
Liquidity Ratios
Current Ratio
= Current Assets / Current Liabilities
= 11,878,300,000 / 5,482,000,000
= 2.17
Generally, the higher the current ratio, the more liquid the firm is
considered to be. A current ratio of 2.0 is occasionally sited as
acceptable, but a value’s acceptability depends on the industry in which
the firm operates. ICI is involved in different businesses so the current
ratio of 2.17 is acceptable.
1) Quick Ratio
- 49 -
Year Ratio
2006 1.29
2007 1.44
2008 1.81
2009 1.92
2010 2.17
= (Current Assets - Inventory) / Current Liabilities
= (11,878,300,000 – 4,258,320,000) / 5,482,000,000
= 1.39(Times)
The quick ratio is similar to the current ratio except that it excludes
inventory, which is generally the least liquid current asset. A quick ratio of
1.0 is occasionally recommended, but as with the current ratio, what value
is acceptable depends on the industry. The quick ratio provides a better
measure of all overall liquidity only when a firm’s inventory cannot be
easily converted into cash. If inventory is liquid, the current ratio is a
preferred measure of overall liquidity.
Activity Ratios
- 50 -
Year Times
2006 0.73
2007 0.97
2008 1.02
2009 1.27
2010 1.39
Inventory Turnover
= Cost of Goods Sold / Inventory
= 28,443,690,000 / 4,258,320,000
= 6.68(Times)
Inventory turnover commonly measure the activity or liquidity of a firm’s
inventory. The resulting turnover is meaningful only when i is compared
with that of other firms in the same industry or to the firm’s past inventory
turnover. In ICI the inventory turnover is increasing that is good for the
company.
Average Collection Period
- 51 -
Year Times
2006 5.07
2007 6.24
2008 6.39
2009 6.08
2010 6.68
= Accounts Receivable / Average Sales per Day
= 792,867,000 / 96,246,575
= 8.24(Days)
The average collection period, or average age of accounts receivable, is
useful in evaluating credit and collection policies. The average collection
period of ICI is 8.24 days; it means that on the average it takes 8.24 days
to collect an account receivable. The average collection period is
meaningful only in relation to the firm’s credit terms. The credit period
offered by the ICI to customers is 30 days, average collection period of
8.24 days is quite acceptable. Comparing with last years the ICI is
recovering its amounts earlier from its customers. It reduces the risk of
bad debts.
Total Asset Turnover
- 52 -
Year Days
2006 12.84
2007 13.65
2008 11.81
2009 11.08
2010 8.24
= Sales / Total Assets
= 35,130,000,000 / 22,030,672,000
= 1.59(Times)
The total asset turnover indicates the efficiency with which the firm uses
its assets to generate sales. The total asset turnover of ICI is 1.59 times.
This means that the company turns over its assets 1.59 times a year.
Generally, the higher a firm’s total asset turnover, the more efficiently its
assets have been used. Total asset turnover of ICI is increasing which
indicates its stronger position.
Debt Ratio
- 53 -
Year Times
2006 1.16
2007 1.23
2008 1.51
2009 1.33
2010 1.59
= Total Liabilities / Total Assets
= 6,575,227,000 / 22,030,672,000
= 29.85%
The debt ratio measures the proportional of assets financed by the firm’s
creditors. The higher this ratio, the greater the amount of other people’s
money being used to generate profits. The debt ratio of ICI is 29.85%
which indicates the degree of indebtedness. The debt ratio of the ICI is
decreased by the last year; it means that the level of indebtedness is
- 54 -
Year Ratio
2009 32.71
2010 29.85
decreased by the company. Decrease in debt ratio shows the positive
progress of company.
Profitability Ratios
Gross Profit Margin
= (Sales – Cost of Goods Sold) / Sales
= (35,130,000,000 – 28,443,700,000) / 35,130,000,000
= 19.03%
The gross profit margin measures the percentage of each sales dollar remaining
after the firm has paid for its goods. The higher the gross profit margin, the better
- 55 -
Year %
2006 20.85
2007 20.93
2008 19.77
2009 19.96
2010 19.03
(that is, the lower the relative cost of merchandise sold). This is very significant
ratio for small retailers, especially during times of inflationary prices. If the owner
of the firm does not increase the price when cost of sales is increased, the gross
profit margin will decrease. The gross profit margin of the ICI is lower as
compared to last years, it means that the manufacturing cost of the goods is
increased and the sale price is not increased.
Operating Profit Margin
= Operating Profits / Sales
= 3,712,600,000 / 35,130,000,000
= 10.57%
The operating profit margin measures the percentage of each sales dollar
remaining after all costs and expenses other than interest, and taxes, and
preferred stock dividends are deducted. It represents the pure profits earned on
- 56 -
Year %
2006 12.66
2007 12.96
2008 10.98
2009 10.65
2010 10.57
each sales dollar. A high operating profit margin is preferred. Operating profit
margin of ICI is 10.57% which is decreased as compared to last year operating
profit.
Net Profit Margin
= Earnings Available for Common Stockholders / Sales
= 2,428,826,000 / 35,130,000,000
= 6.91%
The net profit margin measures the percentage of each sales dollar remaining
after all costs and expenses, including interests, taxes and preferred stock
- 57 -
Year %
2006 7.44
2007 7.75
2008 6.70
2009 7.19
2010 6.91
dividends have been deducted. The higher the firm’s net profit margin, the better.
Along with gross profit margin and operating profit margin the net profit margin of
the ICI is also decreasing which predicts a negative impact on shareholders.
Earnings per Share
= Earnings Available for Common Stockholders / No. of
Common Stock Outstanding
= 2,428,826,000 / 138,802,300
= Rs. 17.50
The firm’s earnings per share is generally of interest to present to
prospective stockholders and management. Earnings per share represent
the dollar amount earned on behalf of each outstanding share of common
- 58 -
Year Rs.
2006 10.49
2007 12.86
2008 13.42
2009 14.73
2010 17.50
stock. The dollar amount of cash actually distributed to each shareholder
is the dividend per share. The earnings per share of ICI is Rs. 17.50, it
means that the shareholder is earning Rs. 17.50 on each share. The
earnings per share is increasing which means that shareholders are
earning more than the last year. Earnings per share is closely watched by
the investing public and is considered an important indicator of corporate
success.
Return on Assets
= Earning Available for Common Stockholders / Total
Assets
= 2,428,826,000 / 22,030,672,000
= 11.02%
- 59 -
Year %
2006 8.60
2007 9.51
2008 10.08
2009 9.54
2010 11.02
The return on total assets (ROA), often called the return on investment (ROI),
measure the overall effectiveness of management is generating profits with its
available assets. The higher the firm’s return on total assets, the better. The
return on assets of ICI is 11.02% which shows that company is earning 11.02%
on each Rs. of asset investment. It is increasing as compared to last year which
is showing its better performance.
Return on Equity
= Earnings Available for Common Stockholders /
Common Stock Equity
= 2,428,826,000 / 14,548,093,000
= 16.70%
- 60 -
Year %
2006 14.18
2007 15.70
2008 14.96
2009 15.17
2010 16.70
The return on common stock equity (ROE) measures the return on the common
stockholders’ investment in the firm. Generally, the higher this return, the better
off is the owners. The return on equity for ICI is 16.70% which is increased as
compared to last year. The calculated ROE of 16.70% indicates that during 2010
ICI earned 16.70% on each Rs. of common stock equity.
Market Ratios
Price Earnings Ratio
= Market Price per Share of Common Stock / Earning
per Share
= 144.24 / 17.50
= Rs. 8.24
- 61 -
Year Rs.
2006 11.01
2007 15.29
2008 5.12
2009 11.44
2010 8.24
The price earnings ratio is commonly used to assess the owners’ appraisal of
share value. The P/E ratio measures the amount that investors are willing to pay
for each Rs. of firm’s earnings. The level of this ratio indicates the degree of
confidence that investors have in the firm’s future performance. The higher the
P/E ratio, the greater the investors’ confidence. The P/E ratio of ICI is Rs. 8.24,
which means that investors are paying Rs. 8.24 for each Rs. 1 of earnings. It is
decreased by last year which indicates that investors have to pay less for more
earnings.
Book Value per Share
= Common Stock Equity / No. of Common Stock
Outstanding
= 14,548,093,000 / 138,802,300
= Rs. 104.81
- 62 -
Year Rs.
2006 73.95
2007 81.91
2008 89.68
2009 97.14
2010 104.81
Book value per share of common stock shows the value of the stock which
is written in the books of accounts. In ICI the book value per share of the
common stock is increasing over years.
Market Book Ratio
= Market Price per Share of Common Stock / Book
Value per Share of Common Stock
= 144.24 / 104.81
= 1.38
- 63 -
Year Ratio
2006 2.26
2007 4.44
2008 4.50
2009 1.28
2010 0.96
The market book ratio provides an assessment of how investors view the firm’s
performance. It relates the market value of the firm’s shares to their book-strict
accounting value. The market book ratio of the ICI is 1.38. It means that investors
are paying Rs. 1.38 for each Rs. 1 of book value of ICI company stock. Clearly,
ICI future prospects are being viewed favourably by investors, who are willing to
pay more than its book value for the firm’s shares.
VERTICAL ANALYSIS
Vertical Analysis 2006 2007 2008 2009 2010
% % % % %
PROFIT AND LOSS ACCOUNT
Net sales, commission & total income 100 100 100 100 100
Cost of sales 79.1 79.1 80.2 80.0 81.0
Gross profit 20.9 20.9 19.8 20.0 19.0
Administration & gen expenses 3.7 3.3 4.1 4.1 3.7
Selling & dist expenses 4.5 4.7 4.7 5.2 4.8
Operating result 12.7 13.0 11.0 10.6 10.6
Financial charges 1.6 0.6 0.8 0.6 0.5
- 64 -
Other operating charges 0.9 1.0 0.8 0.9 0.9
Other operating income 0.7 0.7 0.8 1.6 1.4
Profit before taxation 10.8 12.0 10.1 10.8 10.6
Taxation 3.4 4.3 3.4 3.6 3.7
Profit after taxation 7.4 7.8 6.7 7.2 6.9
VERTICAL ANALYSIS
Vertical Analysis 2006 2007 2008 2009 2010
% % % % %
BALANCE SHEET
Total equity and revaluation reserve 67 66 73 67 70
Non current liabilities 1 1 3 6 5
Current liabilities 32 33 24 27 25
Total equity and liabilities 100 100 100 100 100
- 65 -
Non current assets 59 52 56 48 46
Current assets 41 48 44 52 54
Total assets 100 100 100 100 100
HORIZONTAL ANALYSIS
Horizontal Analysis 2006 2007 2008 2009 2010
% % % % %
PROFIT AND LOSS ACCOUNT
Net sales, commission & total income 5.9 17.6 20.7 2.3 23.6
Cost of sales 2.4 17.5 22.5 2.0 25.0
Gross profit 21.8 18.1 14.0 3.3 17.8
Administration & gen expenses 4.7 4.7 48.1 4.6 10.3
Selling & dist expenses 7.4 22.7 22.6 11.6 13.9
Operating result 34.5 20.4 2.3 -0.8 22.6
- 66 -
Financial charges 11.2 -54.1 49.8 -23.6 -2.2
Other operating charges 58.5 29.9 5.1 5.9 22.6
Other operating income -21.7 18.6 39.2 15.5 5.7
Profit before taxation 31.3 30.7 1.6 9.2 21.4
Taxation 49.5 48.6 -3.4 8.2 26.7
Profit after taxation -7.4 22.6 4.4 9.8 18.8
HORIZONTAL ANALYSIS
Horizontal Analysis 2006 2007 2008 2009 2010
% % % % %
BALANCE SHEET
Total equity and revaluation reserve 14 9 8 7 7
Non current liabilities 15 15 413 97 -10
Current liabilities -8 15 -29 30 -5
Total equity and liabilities 6 11 -2 16 3
- 67 -
Non current assets 5 -2 7 -1 -1
Current assets 8 28 -11 38 7
Total assets 6 11 -2 16 3
HUMAN RESOURCE MANAGEMENT
Human Resource Management is an important factor in supporting the
achievement of company business, meeting results and the attraction of those
with the potential to contribute to business performance i.e. to be seen as a
Preferred Employer.
A compensation and benefits strategy supporting drive for a more efficient, flatter
structure, with increased employee involvement and improved communication
was developed at ICI. Efforts continue for ensuring that the total compensation
remained competitive in the Pakistan labour market and represented value for
money for the company.
Compensation and benefits practices are regularly compared with other
employers to develop the company’s compensation and benefits. Any salary
- 68 -
review is then based on market practices, company and employee performance,
relative job size and skill scarcity.
HR Department at ICI is one of the strongest HR departments in Pakistan. Some
local companies think that HR is not such a productive department, but the loss
of money and resources but ICI is well aware of the benefits of the HR
Departments. That’s why it has a fully establish setup. No of employees of the
Soda Ash Business are as follow:
Managerial Staff : 96
Non-managerial Staff : 320
Recruitment Procedure
For Managerial Staff:
To hire the managerial staff, following procedure is followed:
- 69 -
Advertise
Applications
Short Listing
Interview
Final Interview with VPMedical Check-up
First of all, post is advertised in the news papers and the official website of the
company and applications are invited. After dead line, all applications are
processed by HR department and candidates are short listed with the
consultation of the Head of the concerned people. Then these short listed
candidates are interviewed.
Then comes the final interview with the Vice President of the company and final
candidates if selected. After this candidate has to prove his Medical fitness and
passing the medical, he/she is selected.
Non-managerial Staff:
For non-managerial staff, process depends upon the importance of the post. If
the post is important one, then previous procedure is followed. However if the
post is not of such important e.g. un-skilled labour, etc. then they are hired
through referrals etc.
Performance Evaluation
For the purpose of performance evaluation, employees are allocated objectives
in the start of the year. These objectives are clearly explained to the employees.
Now performance of the employees is judged by comparing their performance
with the objectives and task assigned to them. These objectives are decided in
light of the discussion with the employees and are realistic.
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Many benefits like salary increments, bonuses etc. are linked with this
performance evaluation. If all tasks assigned are completed and objects are
meeting, there is a huge increment in the salary of the employee and bonuses
are also announced for the shinning one. However these benefits can be cut
down, if employee’s performance remains below the standards.
However the reasons behind this failure are also studies. It is checked whether
these objectives were un-realistic or there were other reasons behind this. If
employees need any training, he is fully provided a chance to improve his skills
by training.
Problems encounters
When an employee faces any problem regarding HR department or in case of
grievance, he can directly contact Human Resource Department and can bring
his view in from of the staff. HR staff is required to solve his problem as early as
possible. However if employees is not satisfied with the HR department at
Khewra, further he can contact HR Combined Services in Head Office. Even now
if he is not satisfied, he can directly contact ICI Plc Ltd, London through “Speak
up Programme”. Through this programme, employees are allowed to contact
the parent company in United Kingdom for his problem.
Compensation & Benefits
Provident Fund: Provident fund is provided to both management staff and non-
management staff at the time of retirement or leaving the company. However
employee has to serve a fix time period in the company in order to claim for the
provident fund in case of leaving the company.
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Gratuity: Employees are also awarded gratuity at the time of retirement or
leaving the company. However no gratuity is awarded in case of the dismissal
from the company.
Pension: Pension is awarded in case of the management staff. Further they can
also claim for the benefits under the provision of the Employees Old Age Benefits
Institute and as per laws. However in came of non-management staff, no pension
is awarded. Such employees can only claim for the Employees Old Age Benefits.
Non-Work Related Facilities and Benefits:
Wheat system: They are providing wheat to their employee’s @Rs.6 per
40 KG to self and to the employee’s children till the age of 18 years of son
and till marriage of daughter.
Staff Colony: There is a staff colony for the employees of the company
these houses are furnished according to the grade as follows.
Air Conditioner
Telephone
Geezers
Heaters
Refrigerator
Water, Gas and Electricity
White wash etc. etc.
House Allowance: House allowance to those employees who are not
living in the staff colony.
Pick and Drop Service: Pick and drop service to those employees who
are not living in the colony and are away from the site.
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Car and Motor cycle Loan: They also provide motor cycle loans to those
employees who are willing to buy that and is deducted from there pays as
instalment @ Rs.1000 per month.
Winington Hospital: A full time working fully equipped 20 beds Hospital
with 1 doctor and 1 lady doctor supported by other visiting doctors and
other well trained medical staff for employees.
Medical Allowance: Medical allowance to those who are referred by the
doctor outside.
Self (Employee and His wife) @ 100%
Dependent (Children and Parents) @ 80%
Winington School: A very well established school up to class 10th.
Fair Price Shop: A Fair Price Shop for employees who deliver things at
cost (No profit no loss).
Ladies Welfare Centre: Ladies welfare centre for training of ladies like
tailoring cooking etc.
Alkali Supports Club: Alkali supports club for refreshment of workers
(non-management staff).
Winington Club: Winington club for refreshment of management staff.
Guest House: A well furnished guest house.
Employees Creational Programmes
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Employees at ICI are considered the main ingredient for the success. So in order
to over come some barriers, keep employees motivated and reducing the stress
of work on the employees, ICI Soda Ash Business arranges different events
frequently. These are:
Musical Nights: There are musical shows are conducted on different
occasions like 14 August etc. all the employees and their families are
invited on that function.
Drama Shows: Drama shows are also a part of grand show.
Annual Dinner: Annual dinner is a wonderful program which is arranged
by HR. in this program all the management and non management staff get
together and have a sweet dinner.
Bassant Mala (kite festival): Bassant Mala also a very interesting event.
Eid Millan Party: Eid millan party after Eid-ulfitter is a very sweet event.
Annual Games: Annual games are conducted of every type like cricket,
hockey, football, athletics, etc. every department has its own team and
every department has to participate in this event.
Murree Trip: Annual Murree trip is a wonderful event employees go their
have a “mango party” and a lunch by company.
Grievance Management: As the concept of team work is prevailing in ICI
Soda Ash so all the grievances are solved at the lover level and that is the
culture of ICI that if some goes to his boss for a matter that can be solved
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by his college that is considered bad. So all the grievances are
management at the team level unless any serious matter.
Insurance Policy: All the employees are insured from all aspects. That
means if in case of natural death or in case of murder he is insured and if
case his is bodily become disabled in the factory due to any reason his
every body part like finger eyes hands legs etc. these are also insured.
SWOT ANALYSIS
SWOT Analysis is a simple framework for generating strategic alternatives from a
situation analysis. It is applicable to either corporate level or the business unit
level and frequently appears in marketing plans. SWOT stands for Strengths,
Weaknesses, Opportunities and Threats.
As far the SWOT analysis of ICI is concerned, situation show the following facts:
Strengths:
Strong Brand Name
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Good reputation among customers
Cost advantage from proprietary know-how
Exclusive access to high grade natural resources
Favourable access to distribution networks
Resources, Assets and People
Innovation Aspects
Experience, Knowledge & Data
Quality process and procedures
ICI enjoys a good reputation not only in Pakistan but across the globe. Further
recently it is acquired by Akzo Nobel which is also chemical industry leader in the
world. So it strengthens the image of Soda Ash business. Further resources are
readily available in Khewra which is situation among the Salts, Lime Stone and
Coke mines. Innovation and quality control also have been a success for the ICI.
Business has a team of experience people and has a powerful distribution
network across Pakistan.
Weaknesses:
Timescale, Deadlines and pressure
Reliability of Data, plan predictability
Location of the business
Along with the strengths, Soda Ash business also has some weaknesses. First
one is the pressure and deadlines for the plant. Plant is operating at its full
capacity and company cannot afford the breakdown or shutdown of the plant
because demand is always on the higher end. Plant is in remote area, that’s why
in case of any emergency, when expertise and not available in Khewra, it takes
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time to repair any damage to the production. Further production at remote area,
also increased transportation cost to the different areas of the country.
Opportunities:
Market Development
An unfilled customer need
Arrival of new technologies
Loosening of regulations
Removal of international trade barriers
Information and Research
Partnership, Agencies and Distribution
Volume, Production and Economies
There are a lot of opportunities for the Soda Ash Business. Due to high growth of
industry in Pakistan, demand of the Soda Ash is increasing day by day as it is an
important raw material for different industries like glass, textile, paper etc. Further
economy of scale is also an important opportunity. There is only one competitor
for the ICI in Soda Ash and ICI has hold on more than 70% of the market. New
technologies are also helping in order to reduce cost of production.
Threats:
Emergence of substitute products
Political Effects
Shift in consumer tastes away from the firm’s products
Loss of key staff
Environmental Effects
Competitors Intentions
New regulations
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Soda Ash business is also facing some threats in process of conducting
business. Soda Ash is mainly used as raw material in different industries. Due to
growth of production and new technologies, it is possible to substitute some
products from others. So business faces this threat that in future their products
can be replace by some other low cost products. Due to situation if far area,
many employees leave the job when they got an opportunity in some other sector
in main city or move to some other business of ICI in Lahore, Karachi etc.
Further competitors can also expand their capacity or adopt some better
technique in order to produce more quality goods. That’s also another threat for
the business. Environment effects are also important one. Awareness regards
CFC’s is also increasing day by day. Although business has adopted a strategy
in order to reduce CFC’s but it has to make it fast.
Further political situation effect the business a lot, especially the multi national
one. Falling price of rupee against dollar, inflation, increase in raw material,
shortage in electricity are also threats for the industries.
MY WORKING AT ICI
Working at ICI remained a very successful experience for me and it was great
experience for me that I worked with such a dynamic firm. Mainly I worked in the
Finance Department at ICI Soda Ash Business, Khewra, however I also visited
other departments of the company and also interviewed different people. I think I
remained successful in order to grasp the procedures and extract the valuable
knowledge.
I want to appreciate the efforts and their corporation of ICI employees for their
advice and their assistance in helping me to avail this opportunity. I learned a lot
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from these people. They were much experienced and have a great command in
there own work & on policy of ICI. Mainly I worked in the following tasks:
1. Preparation of Landed Cost for Imports
The cost which is incurred on the imports of raw material from the premises of
exporter up to the premises of ICI is called landed cost.
During my internship in ICI I learned how to prepare landed cost for the import of
Coke (Raw Material). I prepared landed cost in excel sheet with the help of
different documents as Purchase Order, GRN (Goods Receipt Note), Sales
Invoice, LC (Letter of Credit) and Insurance Documents etc. I calculated taxes
and excise duties with the help of their rates which were imposed during transit to
find the landed cost.
2. Vendor Clearance
ICI Soda Ash purchases goods from customers and make the payments at the
end of the month. The process in which outstanding balances of the vendors are
cleared is called vendor clearance.
I worked on vendor clearance and calculated outstanding balances of vendors
after deducting discounts.
3. Import Cost Analysis
My supervisor assigned me task to analyze the impost cost of different purchase
orders. I analyzed these costs by making a comparison between the costs of
different purchase orders of the last year with cost of the recent year. I identified
differences between these costs and concluded that, exchange rates were the
main reason for these differences.
4. Reconciliation of Bank Statement
During my internship period I learned how to reconcile the bank statement with
company records. Reconciliation was a lengthy and difficult process. I learned
how to identify differences and how to resolve them.
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5. Management of Sales Tax and WHT (With Holding Tax)
During my internship at ICI Soda Ash, I learned how to calculate and check the
sales tax and WHT (with holding tax) on different sales and purchase orders.
Many times I identified errors which were found by me during the rechecking of
calculation of sales tax and WHT. I conveyed these errors to my supervisor to
rectify them.
6. Creation of Master Data for New Customers
When a new customers enters in the organization, his master data is created in
SAP for further usage. Master data contains the name, address, phone number,
email, fax and NTN of the customer. It also contains the fixed foreign currency
rates, sales tax rates on different items and tax exemptions on different items. I
entered the master data of many new customers in SAP software.
7. Updating Foreign Exchange Rates in SAP
Many times I updated the exchange rates in SAP. In ICI Soda Ash, foreign
exchange rates were updated in system on daily basis so that the transactions
which take place on a day can be settled on that specific day exchange rates. An
email comes to all relevant persons who need exchange rates. The email
contains the exchange rates of all foreign currencies in which ICI Soda Ash is
dealing.
8. Process of Petty Payments
During my internship period I learned how to make petty cash payments for small
expenses such as, transportation, employee funeral expenses and cash
withdrawal for cash office. I also learned how to make entries of these petty
payments in SAP software. Amounts mentioned on these bills were checked
correctly and the vouchers which were prepared for these bills were checked and
signed by three different persons.
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9. Payments of Interest to Customers on Their Securities
I learned that when a customer enters in ICI Soda Ash, he is asked to pay some
amount of money in the shape of security deposit. The purpose of this security
deposit is to reduce the fear of bad debts. If a customer purchases goods on
credit basis and did not pay the cash on specified date, the losses which
occurred can be recovered from his security deposit.
ICI Soda Ash deposits these securities in bank in the shape of fixed deposits. ICI
earns interest on these deposits and pays to customers. I calculated the interest
for customers on their securities and adjusted their securities balances if they
were increased or decreased during the period.
10.Purchase Process
During my stay in ICI, I was briefed about the purchase process that is adopted
by the ICI Soda Ash. I learned how a purchase order takes place and how ICI
imports goods according to that specific purchase order. I practically examined
the documents which were necessary for a purchase order.
11.Management of Record
In ICI I was given a task to check the files and arrange them according to
purchase order number. I examined 32 files and arranged them according to LC
number and purchase order number. I attached all the documents of a specific
purchase order number at one place and arranged all the purchase orders. I
prepared the stickers for those files which contains their PO numbers and LC
numbers. I asked the binder to bind the files according to the stickers in a
sequence. I identified many documents which were missing for many purchase
orders and conveyed to my supervisor.
12.Preparation of Cheques
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I prepared cheques for salary of customers and for welfare program of
customers.
Skills Acquired by Me
SAP Usage Skills
During my internship period, many times I worked in SAP software. I updated the
exchange rates in SAP, created master data for the customers. Some entries
were made by me in SAP. I have an overview of all the SAP software.
Excel Skills
I acquired many excel skills during my internship. I prepared many excel sheets
in Microsoft excel. I learnt many excel formulas which are frequently used in
office work.
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Time Management
I learned how to manage my time. I was explained how to manage the objectives
with the help of important, unimportant, urgent and un urgent quadrant. I learned
how to use my time in efficient manner.
Work Environment
I observed the work environment of an organization. I observed how employees
cooperate with each other in time of need. Confidentiality was an important
factor; I observed how auditors were satisfied without losing the confidentiality of
the company.
CONCLUSIONS
ICI Pakistan Ltd. is an excellent organization. It operates as an independent
business unit with AkzoNobel as a part of its specialty chemical portfolio. The
seed planted in 1926 is now a tree which provides extremely qualitative products
to billions of people all around the world. It is also providing jobs to millions of
people in different countries. The fact can be judged by ICI and AkzoNobel is the
number one chemical manufacturing and processing company of the world and
this fact is recognized by Fortune 500.
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Management of ICI Pakistan is mostly local. Top management involves CEO and
senior mangers (Chief Financial Officer, Production and marketing) while every
business is headed by Vise President of the Company. They all are experienced
people. It is a relatively very old Multinational on the Pakistani established in
1944 it has established a strong footing for itself in the chemical industry.
Apparently, there are no loop holes in the working of the organization, but still
some areas require more attention.
Management has designed rules and regulations which are supposed to be
followed by everyone. Policies have been formulated for major and minor issues
both. Relationship with the employees is maintained at every level. Employees
work with commitment and dedication to achieve the best for the organization.
Job satisfaction soars at a high level.
Due to its innovation technologies, committed employees and best use of the
resources, it has gained a prominent position in the market and is far ahead of its
competitors.
RECOMMENDATIONS
Following recommendations are based on my observation during my internship
at ICI and some have been given during formal and informal interview with the
employees.
Although ICI is offering a lot of incentives to its employees in case
of salary and benefits. However there is a clear different in facilities of
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permanent and contract employees. For example in department I worked,
finance officers were on contract basis and there was more burden of work on
them while they were getting only the basis salary. Facilities like medical
allowance, Pension, Gratuity; Provident Fund is not for the contract
employees. This creates a lot of dissatisfaction among the employees.
Pay increment of people should be according to the work and
duties they perform. In some cases it does not happen and pay is not
increased according to seniority and work base. For example, during my stay
at ICI pay was increased and clerk handling the most work was awarded 20%
increment while other was awarded 40% increment although his work was
less and duties were easy one as compared to first one.
Purchase department is very important department of any company
and production depends a lot on purchased of timely raw material, plant
equipment and other supplies. So purchase department was already facing a
high burden, further quarry department was also added in it and quarry staff
was also working in the same premises producing a lot of difficulties. So Soda
Ash Business should separate the quarry department and it would be most
suitable if it is shifted at the site where quarry is located so that burden on
purchase department decrease and quarry staff also not has to travel daily
between site and purchase department.
Consumer Services Department but couldn’t get what and where it
is. Well the name suggests that it should be most visible and active
department, I wonder if it is there? If it is there it should be organized at a
larger scale and efforts should be made to interact more frequently and at a
personal level with the consumers.
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Last of all I must Thank ICI and HAILEY COLLEGE once again for providing me
the golden opportunity of spending 6 weeks in such a wonderful place where
most people can only dream of. It was an experience of life time. I got the chance
of sitting among the ideal sort of people, professionals whose names are
engraved as pioneers and geniuses of the field. I learned about meeting and
dealing with people. I must say that the integration of this internship program will
definitely a significant improvement in my future professional life.
I end my report here by again thanking Allah Almighty who gave the ability to
complete this tedious task and all other people who have helped me in this task.
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