CHEMICAL group ICI is blaming price wars and the strong pound for a sharp drop in profits.

Pre-tax profits at the firm, which employs more than 500 at its plants in Darwen and Clitheroe, slumped to £65 million from £202 million.

But turnover fell less sharply to £2.4 billion from £2.5 billion in the first quarter of its financial year.

Chairman Sir Ronald Hampel said demand was strong for most of the company's products, with the paints and explosives divisions bucking the general downward trend to report improved profits.

But a cyclical downturn in prices hit the industrial chemicals and materials divisions.

However, the company said that prices increases for some of the division's products were expected in the second quarter.

Sir Ronald summed up the double bind which price competition and sterling put ICI in during the first three months of 1997, saying: "Sales volumes were generally strong and we achieved further productivity savings, but profits were reduced by intense price competition and the strong pound."

Converted for the new archive on 14 July 2000. Some images and formatting may have been lost in the conversion.