London, May 4 - Britain's biggest chemicals firm ICI Plc beat forecasts with an 8 percent increase in first-quarter profit on Thursday, sending its shares over 5 percent higher as it unveiled plans to cut 2,300 jobs.
Imperial Chemical Industries Plc, which makes Dulux paint, said it planned the job losses as part of a programme to cut 170 million pounds ($311.9 million) of annual costs by 2011.
ICI made 91 million pounds underlying profit before tax in the first quarter of 2006, up from 84 million a year earlier and ahead of analysts' forecasts averaging around 80 million.
UBS analysts said the uplift had been driven by the group's paint business and its starch business, which makes everything from food ingredients to adhesives.
"Across the divisions, paints and National Starch trading profit were well ahead of forecasts," they said in a research note. "Paints continue to benefit from strong performance in Asia and Latin America."
ICI shares jumped 5.7 percent to 391 pence by 0742 GMT, valuing the group at around 4.6 billion pounds.
John Dawson, head of investor relations, declined to say when and where jobs would be cut, but added: "We have a fairly lengthy consultation process to go through."
ICI said it planned to invest 340 million pounds in cost-cutting measures in five areas: manufacturing efficiency; streamlining the supply chain; improving its sales force; rationalising its back office; and improving its IT platform.
"ICI has started 2006 well," said Chief Executive John McAdam. "The outlook for the balance of 2006 remains positive and in line with previous expectations."
Dawson said the possible sale of ICI's oleochemical business, Uniqema, was progressing well, with the level of interest slightly higher than anticipated.
"There's a range of interest, from the financial market to trade buyers," he said.
ICI said the group's future growth would largely be driven by expansion in Asia.