Commercial Agreements a Stepping Stone to an Independent ICI Australia

5th June, 1997

Since Imperial Chemical Industries PLC's announcement on 7 May 1997 of its intention to sell its shareholding in ICI Australia Limited, detailed discussions have taken place between the management teams of the two companies in relation to the commercial relationship which will exist between ICI PLC and ICI Australia following ICI PLC's sell down.

These detailed discussions have now been completed and the two companies have entered into a range of transitional arrangements and ongoing commercial agreements to govern the relationship post ICI PLC sell down. The documents relate, among other things, to intellectual property, technology, supply and distribution arrangements.

ICI Australia Executive Director, Philip Weickhardt said:

"Signing of these agreements means that the first stepping stone is in place for ICI Australia's future as an independent company. We are also satisfied that, with the exception of some one off separation costs the ongoing commercial and technology agreements will be neutral to positive for ICI Australia as it continues to grow its business profitability in the years ahead".

Some of the key features of the agreement are:

• The agreements come into effect from the date upon which ICI PLC's shareholding in ICI Australia falls below 50%.
• ICI Australia retains exclusive rights to use the ICI roundel (registered trade mark) and the "ICI" house mark in Australia, New Zealand and Papua New Guinea for one year. (A further announcement will be made at an appropriate time of ICI Australia's proposals concerning a change in name.)
• ICI Australia owns the key brands in the Paint business in Australia and New Zealand including the "Dulux" brand. ICI Australia will be able to exploit opportunities in paint markets internationally, particularly in Asia. In auto refinish and can coating ICI Australia and ICI PLC have entered into a 7 year agreement to maintain existing co-operative arrangements.
• The arrangements between the companies on Explosives will assist ICI Australia to continue to operate its strong Explosives business in Australia and New Zealand and will provide the company with enhanced opportunities in Asia.
• ICI Australia will continue to export Surfactant products to Asia through ICI PLC companies for a 12 month period.
• For a period of 3 years ICI Australia will continue to act as ICI PLC's distributor for the majority of its resale products in Australia, New Zealand, Papua New Guinea and Fiji.

With regard to technology Mr Weickhardt added:

"We are confident that we have the technology base to enable us to develop our business successfully in the future".

ICI Australia will shortly be writing to shareholders concerning these agreements.