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April 29, 1994

ICL EXTENDS PAYMENT TO SUPPLIERS TO 60 TO 90 DAYS, WITH INTEREST THEREAFTER

By CBR Staff Writer

At ICL Plc’s 1994 Vendors Conference, under the slogan Together in Partnership, the Putney company did its best to play down the confusion created by its recent restructuring, and announced new payment terms for its suppliers. The question and answer session was dominated by confusion over the company’s break-up into smaller, largely autonomous businesses. Dave King, Intel Corp’s UK regional manager, complained: Sometimes we can’t keep track of how they reorganise. It’s sometimes hard to find out from the ICL viewpoint who has ownership of the contract. He quipped that the biggest gainer from the reorganisations, so far, had been British Airways Plc. However, ICL stood firm behind the reorganisation, which it claims has helped to cut operating costs by UKP100m in the increasingly low-margin computer business, and reassured delegates that its 26 specialist individual businesses can effect ties with individual vendors, as long as they are accredited by the central procurement policy. Keith Todd, director of finance and business strategy, stressed the continued need for business partners to focus on lowering their operating costs to maintain present margins. Small companies have been complaining bitterly that the customers on which they depend treat themselves to free credit by delaying paying their bills – but big companies can be victims too, and ICL is biting back. It has set new payment guidelines and targets: On average we get paid by our customers in 60 days, said Todd. We have today average payment terms of 30 days and this is too short, he said. Henceforth, ICL will pay suppliers within between 60 and 90 days; after this, procurement managers will be authorised to pay interest on any outstanding sums. Todd made a commitment to pay to terms and sought to allay vendors’ fears that devolved businesses would be less prompt. David Mills, managing director of client-server systems, also assured vendors that ICL maintained a very arm’s length relationship with Fujitsu Ltd, and that where Fujitsu and partners competed for ICL’s favour in the same markets, products would purchased purely on the basis of quality, cost, and overall service.

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