July 16, 1999

Millennium Project

PROGRESS HIGHLIGHTS - JUNE 1999

• On our manufacturing sites we have completed all planned work on establishing which devices contain embedded date-sensitive chips and taken the necessary action to replace or modify any systems where date-sensitivity could have resulted in problems. Several thousand pieces of equipment were involved and the programme was completed, on time, at the end of June 1999.

• Our integrated business system, utilising SSA BPCS software, was successfully migrated to a Millennium compliant version and computer in October 1998 and has completed all its Millennium checks satisfactorily.

• Our project to make a range of older in-house mainframe systems compliant is running to schedule and will be signed-off at the end of July 1999. The software updating was completed in 1998 and we have been carrying out integrated user trials of the upgraded systems on a separate IBM MVS mainframe to check out any Millennium effects.

• In co-operation with our service providers IBM, Origin and GE Capital, we have auditing, and where necessary remediated, all our PCs, LANs and servers. All our critical PC-based end-user applications were signed off early in 1999. Our Wide-Area Network links, provided principally by AT&T and Racal, have already been checked but as a result of ICI Group network changes we will complete sign-off in Q3, 1999. Our buildings and any other critical office equipment have been assessed.

• We have maintained active dialogue with our customers and held a 'Millennium Day' in February 1999 which was attended by 70 of the largest companies that we supply. We continue to respond to customer enquiries about the progress on our Millennium programme. As 1999 has proceeded we have focused on establishing customer expectation of product demand over the Millennium roll-over period and in understanding any contingency planning arrangements that they have in place.

• We have worked actively with our critical suppliers of engineering goods and services, shipping and haulage firms, utilities etc. Where appropriate, auditing of suppliers has taken place and we have made use of information available from 'Action 2000' and from industry groups. This dialogue will continue throughout 1999 because no one can give absolute guarantees of compliance in advance.

• In December 1998 we put in place a wide-ranging organisation to prepare and implement special operating regimes and contingency plans for the Millennium cutover weekend and beyond. This has full top management support and involvement. The result has been a defined set of Millennium Operating Regimes and plans for all manufacturing plants and critical areas of the business. Resources have been reserved from within our own staff and critical third-party suppliers (e.g. IT service partners) to give cover over the Millennium and attend to any problems that occur. Our aim is that we will maintain 'business as normal' throughout the period.

• Our programme is subject to regular review by our internal audit function and by KPMG, ICI's external auditors. No significant concerns have been raised by any of these audits. Whenever issues have been raised we have rapidly put in place actions to cover the highlighted areas.

• Our programme will not be considered complete until we have passed both the 1/1/2000 and 29/2/2000 milestones. All our plans are being kept under continuing review and the senior level steering groups continue to meet regularly to monitor progress and reassess if any new risks requiring action have been identified.

OVERALL PROJECT STRUCTURE

The ICI Chlor-Chemicals Millennium Project covers all business areas. Safety, Health and Environment (SHE) are our prime concerns, and it also includes our relationship with our customers and our suppliers. A multi-disciplinary team is addressing Millennium issues in manufacturing, engineering and information technology. Suppliers of raw materials, transport, goods and services have been contacted to avoid business disruption prior to, during and after the Millennium change. Our customers are being kept informed about our progress.

ICI Chlor-Chemicals has adopted the BSI standard definition of Millennium compliance1 for use in its internal processes.

The ICI corporate project is sponsored by the ICI Chief Financial Officer (CFO) and by the Vice President for IT. A Corporate Millennium co-ordinator was appointed in 1997 to oversee the projects in the different ICI Businesses.

In ICI Chlor-Chemicals, the CFO is the overall sponsor for the Millennium project. The Information Systems Manager is the overall co-ordinator. The set of business and functional projects is directed and monitored by two geographical steering groups (Europe/Global and North America) and managers have been appointed to look after each specific Millennium project.

The steering groups meet about every 6 - 8 weeks to discuss progress, to share best practice and learning, and to resolve issues. Each group has representation covering each of the Chlor-Chemicals businesses operating in the region and the functional lead for customer and suppliers, 'enterprise' IT systems, 'legacy' IT systems, 'embedded chip' plant systems, technical and laboratory systems, desktops and networks.

The project in ICI Chlor-Chemicals was started in early 1997 and includes the following different phases :

Inventory

The inventory produced for Millennium covers manufacturing, engineering (including site engineering), laboratory and measurement equipment, services (electricity, water, steam, compressed air etc.), IT infrastructure, core business applications, general office and E-Mail packages, IT services providers, suppliers (services, raw materials, transport, financial institutions, voice and data etc.) and customers. It is believed that components containing microprocessor have been identified and checked for date functions. All items are logged in global databases for further tracking. All critical inventories have been completed in 1998.

Risk assessment

This is seen as an iterative process and is occurring regularly during the project. Based on the inventory, an assessment process was used to identify high risk components, critical raw materials and services suppliers and other items that could have a major impact. The criteria are based on potential SHE risks, substantial loss of production or discontinuity of business processes. These issues are handled with the highest priority. Areas of medium and low risk are also being handled with appropriate priority.

Contact suppliers

All critical contractors, business partners and suppliers, identified by risk analysis and prioritisation, have been contacted with a request for compliance information about the goods and services we purchase. Replies are evaluated on the basis of predetermined criteria and appropriate follow up is being put in place when necessary (e.g. reminders, questions for more information and business risk analysis of suppliers). All actions are registered in global databases.

Evaluation

Supplier statements, information in the public domain, results of internal / external testing and commercial contacts are used to evaluate the compliance status of the items in the inventory, the services and the IT issues. The results of the evaluation are being used in the implementation planning.

Implementation

The implementation of solutions in the different areas including replacement of hardware and software, upgrades, ceases, modification of contractual arrangements, compliance assurances of suppliers etc. have mostly taken place during 1998. All the principal 'enterprise' transaction processing systems used to handle customer orders and supplies of raw materials are now Millennium compliant and running on new Millennium compliant computers. Significant work is progressing to ensure that critical process control equipment in our production plants is compliant. The work to complete this process is scheduled to fit in with the plant periodic maintenance shutdown plan and will be complete in mid-1999. The phased introduction of common standard new equipment across our plants is allowing us efficiently to use resources. Work on completing the integrated testing of the 'back office legacy systems' that run on the ICI mainframe computer will be completed in mid-1999. Work on modifying the 'legacy' applications was completed earlier in 1998.

Project review and Sign Off

Both at company and business level, regular project reviews take place and progress is reported to senior business and corporate management. The executive team of ICI Chlor-Chemicals is being briefed on Millennium issues each quarter and has approved all necessary expenditure.

An internal process will ensure that people involved in the Millennium project will sign off for their different levels of accountabilities resulting in a letter of compliance from the CEO of ICI Chlor-Chemicals to the ICI Group. Internal and external auditors have been involved in the project to evaluate the processes and the progress made towards Millennium readiness compliance. All audits have concluded that our progress is satisfactory and that forward plans are comprehensive and achievable.

The Millennium work in ICI Chlor-Chemicals was simplified by the recent replacement of the core business applications by BPCS, Oracle and Lotus Notes. The introduction of standard policies for PC purchases and the upgrade of the LANs has eliminated a range of potential issues. New purchases and contracts for goods and services containing software do, where commercially possible, contain Millennium clauses.

Contingency & Business Continuity Planning

Business continuity plans for the Millennium, built on our existing emergency planning arrangements, will be developed further early in 1999 in order to prepare for possible problems. We aim to ensure "business as usual" to meet our customer requirements.

We however recognise that ensuring Millennium readiness is an ongoing process based on the awareness of the people in our own organisation and in those of our customers and suppliers. Information campaigns are ensuring that people are kept informed of the planning, the progress and the remaining issues.

The statements made herein should not be construed as representations or warranties that ICI Chlor-Chemicals will be Millennium compliant. All copyrights in this document and in each and every element thereof belong to ICI Chemicals & Polymers Ltd. You are not allowed to reproduce this document, other than for internal use, by any means or method, and you can not make it public by any media, whether in tangible or intangible form or electronically.

Pursuant to the Year 2000 Information and Readiness Disclosure Act of 1998 in the United States, ICI, on its behalf and on behalf of its subsidiary companies, hereby places you on notice that all prior written or oral communications by this company or any of its subsidiaries issued after January 1, 1996, concerning its Year 2000 processing capabilities, its products or services, its plans, objectives or timetables for implementing its Year 2000 processing, including its testing information or operational problems or solutions, or other comments on its Year 2000 processing capabilities, are hereby designated as Year 2000 Statements and Year 2000 Readiness Disclosures under that Act. These statements are entitled to the protections afforded under that Act.

MILLENNIUM INFORMATION ON THE ICI WEBSITE 

For enquiries contact the Press Office:

Craig Welsh
Telephone: 01928 511528
Fax: 01928 569459
Email: craig.welsh@ineoschlor.com