ICI Pakistan Limited operates under the umbrella of the Yunus Brothers Group, which also owns the country’s largest cement company, Lucky Cement Limited.

The group acquired three-quarter shares of ICI Pakistan for Rs14.4bn a few years back.

The company now operates in four diverse businesses: polyester, soda ash, chemicals and life sciences.

In its quest to expand its scope in various business areas, the company announced last week that it was considering the potential acquisition of certain assets representing the life sciences business portfolio of the pharmaceutical firm, Wyeth Pakistan Limited, subject to regulatory approvals.

Both companies held back information regarding the terms of sale/purchase, which were perhaps still getting finalised.

Asif Jooma, the Chief Executive Officer of ICI Pakistan, while discussing the potential acquisition of Wyeth, told this writer last Thursday that his company was vying to broaden the range of products in the life science business.

“ICI would be equipped with its own manufacturing facility for pharmaceutical products following the buyout of Wyeth and Cirin”, he said.

In its quest to expand its scope in various business areas, the company announced last week that it was considering the potential acquisition of Wyeth Pakistan

During the quarter ended Sept 30, the ICI Board approved the acquisition of 100pc shareholding of Cirin Pharmaceuticals Private Limited, a local pharmaceutical company.

Mr Jooma said that this move would enable the company to expand its footprint through a pharmaceutical manufacturing base of its own; an important move forward which was in alignment with the company’s growth ambitions”.

He further stated that due diligence of Cirin had been carried out and the deal was expected to close in the next 10 days.

Soda ash is the company’s core business, responsible for the biggest share of revenue. The company is a market leader in the soda ash segment with a total capacity of 350,000 tonne per annum.

“We have been permitted to expand the capacity of soda ash by 150,000 tonnes in two phases, with the first phase of 75,000 tonnes expected to come on stream in 2018 and the other phase in the six months following the first”, said Mr Jooma.

He added that the growth potential of soda ash is huge; in line with the growth of the construction industry.

ICI Pakistan also operates the second largest Polyester Staple Fibre (PSF) plant in the country, accounting for 21pc of total industry production.

While agreeing that PSF was the bane of the company due to the glut in the market, together with dumping from Chinese producers, the ICI chief contended that things were on the mend.

He affirmed: “The first two quarters (July to Dec) are lean periods for the PSF business. Yet, relative to 2015, there was improvement in profitability and margins this year”.

The local industry succeeded in convincing the authorities to clamp an anti-dumping duty on PSF imports, but margins were still wafer thin. The slump in exports of blended textiles — the major user of the product, was also responsible for low demand.

The company also has a management stake in the infant milk formula company by the name of NutriCo Pakistan Private Limited.

ICI Pakistan’s investment in ‘NutriCo Pakistan (Pvt) Ltd’ initially amounted to Rs720m, representing a 30pc interest in Morinaga’s (infant food formula) distribution business. The stake was further raised to 40pc in NutriCo.

“A substantial upside potential is seen, considering Morinaga’s specialisation in the nutrition business and Pakistan’s rapidly growing consumers market”, said a sector watcher.

For the latest quarter ended Sept 30, ICI Pakistan earned unconsolidated profit after tax at Rs617m, representing 30pc growth over the earnings in the same period last year.

Operating profit for the period stood at Rs871m, 24pc higher than the earlier year, on the back of improved performance of the Polyester and Life Sciences businesses.

Net turnover amounted to Rs9.26bn, reflecting an increase of 9pc over the corresponding period of the previous year. “This was primarily due to a 37pc increase in sales revenue in the life sciences business, which witnessed strong growth in its Animal Health and Agri divisions”, directors said in their report for the quarter.

For FY16, the company’s total turnover amounted to Rs42.7bn, of which polyester contributed 33pc; followed closely by soda ash 32pc; life sciences 24pc and chemicals 11pc.

At the close of the financial year 2016, the company had non-current assets amounting to Rs17.1bn; current assets at Rs11.7bn and total assets at Rs30.6bn. Paid-up capital stood at Rs 924m. The huge un-appropriated profit of Rs13.2bn produced total equity at Rs14.4bn.

Published in Dawn, Business & Finance weekly, December 19th, 2016