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ICI CHAIRMAN CALLS FOR WESTERN CHEMICAL INDUSTRY TO FACE THE CHALLENGE OF ASIA PACIFIC

 ICI CHAIRMAN CALLS FOR WESTERN CHEMICAL INDUSTRY
 TO FACE THE CHALLENGE OF ASIA PACIFIC
 NEWPORT BEACH, Calif., Sept. 14 /PRNewswire/ -- Sir Denys Henderson, chairman of ICI, today urged Western governments to follow the example of those in Asia Pacific in supporting industry.
 And he warned the chemical industry in the West that it must act quickly to ensure that it remains competitive with producers in Asia Pacific.
 In a speech to the Second World Chemical Congress here, Sir Denys said he expected the fledgling chemical industries of the Asia Pacific countries to be net exporters of chemicals by the end of the decade, posing a clear threat to the industry in North America and Europe.
 "Not only will they be looking to establish strong chemical markets for themselves in the West, but they will be vigorously pursuing new markets in Asia Pacific, thus making it more difficult for Western companies to maintain current exports and to break through to participate fully in the region's future growth," he told delegates.
 Sir Denys said although -- for the time being -- the chemical industry in Asia Pacific is relatively fragmented, most companies in the region have powerful growth ambitions, with a growing customer demand for chemicals right on their doorstep.
 There is already evidence that the Japanese and others recognize the need for restructuring, including mergers and strategic relationships, said Sir Denys, and there has been heavy and growing investment in chemicals by South Korea, Japan and Hong Kong.
 "Overall, I see danger in a restructured and increasingly powerful Asia Pacific chemical industry being able to consolidate its position in China and the rest of that region, if the West is not very fast on its feet. And outside the region, its expanding chemical companies will want to invest overseas, as Japan is already doing, to broaden their technological base, and to increase their market share of world chemical trade," he added.
 Western governments too face challenges, said Sir Denys, as our chemical companies try to restructure their industry in the face of lower growth and sharpening competition.
 "In the Asia Pacific region there is a clear understanding that the source of national prosperity lies in wealth-creating industry. There is a degree of partnership between government and industry which is virtually unknown in the West."
 Sir Denys said he completely agreed with EE Industry Commissioner Martin Bangemann, who wrote earlier this year, "We seriously need to discard ideology and relax the relationship between industry and politics."
 Historically in the West the commercial tradition is that of letting the markets decide, a marked contrast to Asia Pacific where government intervention and support are both normal and effective, said Sir Denys. There was no better example than the latest massive Japanese government package of measures to stimulate their economy, which was announced last month.
 "Western governments need to take note of this pragmatic approach and should be equally practical in the way they judge proposals for industrial restructuring...at the end of the day, we in the West must structure the chemical industry in a way which ensures its ongoing competitiveness with the Asia Pacific producers," he added.
 Sir Denys summed up ICI's approach to the Asia Pacific challenge by the example of its activity in Japan, where the company has around 2,000 employees and a local turnover of 700 million pounds sterling.
 During the many years in which ICI has been involved in the Japanese market it has found it possible to overcome difficulties, to work with our Japanese partners and to benefit from their technological and manufacturing skills. Sir Denys gave three successful examples of cooperation in Japan:
 -- A films plant opened in 1990 at Ibaraki which manufactures products at a quality probably higher than ICI achieves anywhere else in the world.
 -- ICI Pharma, which manufactures near Osaka and has annual sales in Japan of 180 million pounds. Japan is now the second largest world market for ICI's pharmaceuticals products.
 -- A joint venture between ICI Paints in Malaysia and a Japanese company, which has successfully captured the business of Japanese firms such as Matsushita and Sanyo in Singapore and Malaysia.
 -- Sir Denys urged Western governments to follow those in Asia Pacific in supporting industry, and he warned chemical producers in the West they must act quickly to stay competitive.
 -- He said he expected the Asia Pacific chemical industries to be net exporters of chemicals by the end of the decade, posing a threat to the industry in North America and Europe.
 -- As well as facing competition at home, Western producers would find it difficult to maintain current exports to Asia Pacific. The Japanese and others are restructuring and looking at mergers and strategic relationships. He sees danger in a restructured and increasingly powerful Asia Pacific chemical industry being able to consolidate its position in China and the rest of that region, if the West is not fast on its feet.
 -- Asia Pacific also benefits from a degree of partnership between government and industry virtually unknown in the West. Sir Denys quoted as an example the latest Japanese government package of measures to stimulate their economy and agreed with EC Commissioner Martin Bangemann, who recently wrote that ideology should be discarded and the relationship between industry and politics needed to be relaxed.
 -- Western governments should be equally practical in the way they judged proposals for industrial restructuring, and the West must structure the chemical industry to be competitive with Asia Pacific producers, he added.
 -- Western chemical producers had the option of forging alliances with emerging producers or erect political and trade barriers. Sir Denys suggested it was too late for the latter course.
 -- New and significant challenges for the West's chemical industry are already arising in Asia Pacific. They must not be ignored, Sir Denys concluded.
 Sir Denys said there were two options for Western chemical producers -- to forge alliances with emerging local producers, or to lose patience and seek to erect political and trade barriers to close off Western markets to them. He suggested that it was now too late for the latter course.
 He set out a ten-point check plan for success by Western business, which he said should aim to be competitive, quality conscious, price- flexible, committed suppliers, and patient in building relationships, as well as vocationally skilled, well-educated, consistently willing to work to long timescale horizons, market and market share focused and dedicated to achieving high productivity in western markets, as well as in Asia Pacific.
 "In conclusion, the Asia Pacific region is already a formidable international competitor to Western business. Its chemical industry will prove no exception, although I cannot predict the scale or timing of its expansion. A short speech cannot cover every eventuality and there will be periods of interruption on the growth curve. But new and significant challenges for the Western chemical industry are already arising in the Asia Pacific region, and which are both positive and negative. They must not be ignored," concluded Sir Denys.
 Imperial Chemical Industries PLC (ICI), based in London, U.K., is one of the world's leading science-based companies with manufacturing operations in 40 countries. Annual worldwide sales for the ICI group of companies are about $23 billion. In North America, including the United States, Canada and Mexico, ICI associated companies employ about 26,000 people and have annual sales of more than $6 billion.
 -0- 9/14/92
 /CONTACT: Bill Warelis of ICI, 302-886-3638/
 (ICI) CO: Imperial Chemical Industries PLC ST: IN: CHM SU:


KD-PS -- NY050 -- 9179 09/14/92 13:00 EDT
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