Presented by:

Annus Azhar, Hamza Shafique, Haris Yousaf, Habiba Ahsan and Sami
Rasheed

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 TABLE OF CONTENTS

Mission Statement…………………………………………………..
Company Profile………………………………………………………

1: Company Information.
1.1 Competitors……………………………………………………………………………………………….
1.2 Industry Norms…………………………………………………………………………………………..

2: Products and Services.

2.1 Paints…………………………………………………………………………………………………………
2.2 Intended Benefits………………………………………………………………………………………

3: SWOT Analysis.
3.1 Strength……………………………………………………………………………………………………..
3.2 Weaknesses………………………………………………………………………………………………..
3.3 Opportunities……………………………………………………………………………………………..
3.4 Threats……………………………………………………………………………………………………….
3.5 Conclusion………………………………………………………………………………………………….

4: Sale And Profit increase methods…………………………….

5: Financial Documents and Analysis……………………………..

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Mission Statement
Our ICI Paints team intends to remain market leaders in the Paints Business. We wish to be
recognized for offering the best products and excellent customer service. We will run a high
quality, profitable and growth oriented business in an exciting and safe environment

Company Headquarters in Karachi

Company Profile
The Company was founded in December 1926 by way of the merger of four companies —
Brunner Mond, Nobel Explosives, the United Alkali Company, and British Dyestuffs Corporation.
It established its Head Office at Milbank in London in 1928

Competing with DuPont and IG Farben, the new company produced chemicals, explosives,
fertilizers, insecticides, dyestuffs, non-ferrous metals, and paints. In its first year turnover was
£27m

Imperial Chemical Industries (ICI) is a British chemical subsidiary of a Dutch conglomerate

and one of the largest chemical producers in the world. It is based in Slough, UK. It produces
paints and specialty products (including ingredients for foods, specialty polymers, electronic

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materials, fragrances and flavors). It employs around 29,000 people and had a turnover of just
over £4.8 billion in 2006.

Imperial Chemical Industries (ICI) is a British company that enriches our everyday lives and
environment. The specialty chemical company designs, develops, and sells substances used in
the composition of sanitation products, as well as fragrances and paints. These activities are
dealt with in five entities: National Starch & Chemical produces adhesives, starch products for
the food industry and certain papers, and polymers notably for materials used in electronics.
Quest creates aromas and perfumes for care and hygiene products. Uniqema propose products
that improve the features and performance of certain consumer goods such as body creams
and lubricants. ICI Paints manufactures and sells paint (decorative and protective, for both
interior and exterior needs) under well-known brands such as Dulux, Valentine, and Glidden.
Finally, Regional & Industrial Business develops the group's activities in India, Pakistan, and
Argentina. ICI is a real emperor in specialty chemicals.

Since the beginning of 2008 we have been part of Akzo Nobel, one of the world's leading
industrial companies. We are the biggest global coatings manufacturer and the number one in
decorative paints and performance coatings, as well as being a major worldwide supplier of
specialty chemicals

“We employ around 60,000 people in more than 80 countries and are committed to
developing innovative products and cutting-edge technologies, with a heavy emphasis on
sustainability. We have the scale and expertise to deliver whatever our customers require,
wherever and whenever they need it."

As mentioned group is involved in many different businesses however I CI Paints: account for
40% of company sales.

SALES PER GEOGRAPHIC AREA

North America 33%
South America 7%
Asia Pacific 22%
Europe 34%

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ICI Pakistan Limited
ICI Pakistan Limited (Imperial Chemical Industries) is located in Karachi, Pakistan. The company is a
75.81% owned subsidiary of ICI Plc, UK. It was set up as a public limited company in Pakistan in 1952

ICI Pakistan operates a diverse portfolio of businesses.

It has sales of over Rs 50 billion, equivalent to 1 percent of the country’s GDP. With this diverse
portfolio, ICI provides services to a number of diverse industries in the Country. To name a few, they are
Textiles, Glass, Pharmaceuticals, Agriculture and Livestock, Construction, Automobiles, Chemicals,
Cement, Fertilizer, Rubber, Detergents, Footwear, Food, Beverages and Leather.

Today ICI Pakistan’s five businesses, Polyester, Soda Ash, Paints, Life Sciences and Chemicals
manufacture and sell a range of industrial a CI Pakistan is one of the largest quoted companies on the
Karachi, Lahore and Islamabad Stock Exchanges with a paid up share capital of Rs 1.39 billion.

The company has around 1,294 permanent employees and the same numbers of people provide
services through contractual arrangements and consumer product

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Management Hierarchy of ICI paint Pakistan

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Competitors:

ICI paint Pakistan is facing strong competition in Pakistan from the Following:

Direct Competitors Berger Paints

Master
Diamond
Marvell
Buxluy
Silky
Indirect Competitors Tiles
Wood peeling
Wallpapers
Rockwall
Paint Puree

Because of these competitors, ICI paint Pakistan is facing a serious problem in attracting new
customers and retain their existing customer. In order to meet the competitors ICI paint
Pakistan has to spent more money on advertising, promotional activities and area coverage for
their customer satisfaction. Recently new competitors are coming in this industry, which is the
sign of the Growth of paint industry. According to industry analysts, this tough competition,
High promotion strategies and increasing trend toward paint industry are the Clear chances of
the high growth in the paint industry.

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INDUSTRY NORMS

MARKET TRENDS OF INDUSTRY

One of the greatest opportunities for paints producer is that now a day's people are very much
conscious about the quality of the paints. They are aware of the fact that good quality paint is
long lasting for their houses and businesses. Paints Producers are also investing heavy in
advertisement. As a result customers are getting aware of the importance of paint and their
trends are moving from Traditional white wash (KALI) to quality paints products. As producer
companies of paints will more focus on the TQM; it will increase the demand of products. There
is also a great opportunity for paint industry; the housing rate in Pakistan is flourishing very
rapidly, especially after the Earth Quake in Pakistan. Paint Industry can target these customers

MARKET GROWTH OF INDUSTRY

There are huge opportunities for the growth of paint industry in Pakistan. And this industry also
has shown very good results in last decades. But due to Economical recessions and bad political
condition of Pakistan this business has declined by the 10%. The new government has increases
the general sales tax from 15% to 16%. This Increase can hurt the growth of the paint industry.
Recently this industry has Increase the 1% share but new government policies can again hurt
this industry. The increase in tax, energy crisis in Pakistan and high prices of the decorative
Paint products are major hurdles in the growth of this industry. Current Political situation of
Pakistan has also proved to be a hurdle in the development of the paint industry. Government
should focus on this Industry because it is generating lots of revenues for the country

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Following Graph shows market share of different firms in Paint Industry:

As seen from the graph ICI is the leader in paint industry followed by Berger, Master paints and
other small competitors

 50 million households, all over the world, use ICI paints every year.

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Page 11 of 24
Paints
 Decorative
o Dulux brand,
o Dulux Weather shield Fresh range
o Pentalite Classic
o Dulux Odorless range
o Dulux Wood care range
 Refinish & Industrial
 Automotive
 ICI business boasts a host of world renowned brands in its product portfolio, including
Sikkens, International, Interpon, Palbond, Fine Cleaners, DynaCoat ICI Industrial Coatings
and ICI Auto Paints.

REASONS FOR THIS COMPANY’S SELECTION

ICI Pakistan is one of the leading paint companies of the Pakistan (accounting for 1% of
country’s GDP).It enjoys the trust of both the people and the government. Pakistan’s economy
greatly benefits from the Technology that ICI Paints brings in its field. Despite being the leader
in the paint industry, the company operates ethically and professionally. The company knows
its position in the community that is why it is spending its resources for the betterment of the
community. Company is actively involved in giving out to the community in its role of
“Corporate Social Responsibility”, especially in the field of Health, Education, training, etc. With
its diverse portfolio ICI is providing training to large number of employees which they can use to
enrich their jobs and can use that training for the rest of the lives. Also huge foreign exchange is
earned by selling ICI paints.ICI has promoted competition in the paints market which has set the
standards in the industry of supplying quality paint at affordable prices.

Keeping in view these factors ICI has been chosen to represent Paint Industry of Pakistan

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SWOT Analysis

The overall evaluation of a company’s strength, weaknesses, opportunities and threats is called
SWOT analysis. It involves monitoring the external and internal marketing environment.
External environment includes opportunities and threats, whereas internal environment
includes strength and weaknesses. ICI paint is setting up new corporate identity as a result of
dynamic changes in paint industry. The SWOT analysis is an extremely useful tool for
understanding and decision-making for all sorts of situations in business and organizations.
SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats.

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Strengths
 The major strength of ICI’s paint Pakistan is affiliation with ICI Global Network and its
latest technology.
 Another strength is large amount of color and latest color scheme
 Quality of its product is also major strength because ICI paint is providing high range of
products.
 ICI paints covers almost all major markets of Pakistan

Weaknesses
 Promotion: Promotion is most important tool is order to attract customer to your
product but this factor forms significant part of ICI’s costs
 Price factor: Price factor is another weakness of ICI paint because its competitors are
offering fewer prices and other attractive incentives to their customers so it has to give
weight to this factor.
.
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Opportunities
 Increase Promotion: ICI paint has opportunity to increase its promotion in order to
interact with people and to increase their sales volume and it should invest in order to
make their new products familiar to customers.
 Increase market: ICI paint can increase its coverage through the country in order make
its product available in areas not reached before.
 Decrease Price: ICI paint can increase its sales by
Decreasing its prices of its products and it is a great opportunity for it to expand its
market.

Threats
 Increasing competition: The competition is increasing in this industry; many niches are
present in the market and will likely be filled by competitors ICI paint has to take this
factor into account.
 Political Instability: It is another major threat for all the industries present in Pakistani
market. Now a day’s political instability in our country as at its peak and this factor will
influence all the businesses including that of ICI Paints.

Conclusion of SWOT ANAYLSIS:

Since ICI paint has decent strengths and opportunities in the market, its market share is
increasing and it is expanding its network rapidly, so the situation tells us that ICI paint is
adopting and implementing on Sustenance and Growth Strategy.

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How ICI Paints Can Increase Its Sale and Profits?
Sales can be increased by following:-

1- Increasing market share

ICI paint should try to capture the urban as well as remote area market. To get more market
share it needs qualitative products with innovation styles and aggressive market activities to
create awareness among public regarding their products (focusing on Total Quality
Management).ICI Paint has to provide more values to its consumers and more facilities to their
customers at their doorstep by increasing their dealers. One way of increasing dealers is to give
out more licenses or by opening up more Company Operated Outlets. Another way of
effectively increasing market share is to identify NICHE Markets (markets not yet catered for)
and then selling goods in those markets. One way of going at it can be by launching new brands
also can be an effective tool here. Increased market share means more sales and revenue.

2- Promotion
“Promotion means an activity that communicates the merits of the product and persuades
target customers to buy it”. Good Promotion always plays an important role in the success of
any product. A good product can fail if not properly promoted. Differentiation strategy can
be used, in that strategy the company makes its products or services differ to the other
companies. This creates Brand Loyalty so that customers keep buying ICI’s products.
One way of promoting the product is in the moral way is Corporate Social Responsibility
(CSR).This can improve the company’s image and increase its sale at the same time.
Promotion makes the demand for the product Price Inelastic which will allow ICI to
increase its price without losing many customers. The Increase in revenue is more than
enough to outset any decrease resulting from few loss in customer numbers. This leads
to more profits then before

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ICI paints can use following advertising strategies:

• to inform customers about

Informative new products

• to remind customers of
existing products
Reminder

• to convince customers to
Persuasive buy existing products

Electronic and print media should be used to promote ICI’s

products.

3- Reducing costs
ICI Paint has to consider its cost to improve its profitability ratio. As the profitability ratio will
increase, ICI Paint can become stronger and invest more. This investment can be used to
improve the technology. This can lead to improvement in quality of paints this will ensure high
demand from consumers. Also new technology is helpful in cutting down costs. Machines can
replace labor so operational expenses can be reduced.
Profit=Sales-Expenses
Once expenses are reduced it can clearly be seen from above equation that profits will
increase. The results can be breakthrough products that respond to new and anticipated
demands, as well as more efficient manufacturing processes that cut down on delivery time,
costs and taking the company’s sales and profits to an all time high and at the same time
satisfying all the stakeholders of the company.

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FINANCIAL DOCUMENTS AND ANALYSIS

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Continued

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Ratio

Ratios 2006 2007

1 Current Ratio 1.29 1.45
2 Quick Ratio 0.83 0.98
3 Gross Profit Margin 29.41% 29.84%
Net Profit Margin 6.60% 6.87%
Earnings Per Share 10.49 12.86
5 Average Collection Period 21 days 25 days
Inventory Turnover Ratio(times) 5.074 6.25

Interpretation of Ratios
The Liquidity Position of the Company is good Because Assets are more than Liabilities.
Company's Current Assets are more than current Liabilities which is not risky and company may
not be solvent in the short run. There is an upward trend in Quick Ratio Which Shows good
performance so 2007 year is considered best for both Current and Quick Ratio. Inventory
Turnover is worse in 2007 As compared to 2006 because spending on manufacturing has
increased where as sales are not fast enough. The time to realize receivables has increased
which means we are getting our amounts late (Ratio5).

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Overall Performance of the Company

Calculations (2007 Ratios)

Current Ratio:- Current Assets/Current 9058107/6276103 = 1.443

Liabilities
Quick Ratio:-Current Assets-Stock/Current 9058107-2916816/6176103 = 0.98
Liabilities
Average Collection Period:-Account 1707953/(25973009/360) = 25 days
Receivable/Average sales per day
Inventory Turnover(times):-Cost of Goods 18223615/2916816 = 6025
Sold/Inventory

Following figure compares financial ratio of ICI with that of industry and then evaluation is
given on these ratios

Ratios 2007 2006 Industry Avg Evaluation

Current Ratio 1.443 1.29 1.21 Good
Quick Ratio 0.98 0.83 0.80 Good
Inventory 58 71 35 Good
Turnover (Days)
Average 25 21 23 OK
Collection Period
(Days)
Total Assets 1.381 1.3 0.7 Poor
Turnover
Debt Ratio 1.8% 1.7% 4.30% Good
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Gross Profit 29.84% 29.41% 19.70% Good
Margin
Net Profit 6.87% 6.60% 6.90% Poor
Margin
Earnings per 12.86 10.49 14.97 OK
Share
Return on 9.5% 8.6% 5.05% Poor
Investment
Return on equity 15.66% 14.20% 14.70% OK
Price/Earnings 0.7776 0.9533 9.51 Poor
ratio

Financial Analysis
Company has low external debt which means that company can borrow easily. Company is
attractive to investors as they see their funds safe and company’s future less risky. There is
significant Difference in Gross and Net Profit Margin Ratios (23%) which shows company’s
expenses are high, these expenses should be kept in check so that more profit can be earned.
Earnings per Share shows answer of 12.86 which means on average a shareholder earned
Rs.12.86 on a company’s share

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