P2
Over time, and as the process of slimming down progressed, there emerged the concept a two pronged Burmah Castrol, consisting of related businesses. One prong was the Castrol business which, throughout all this turmoil, was continuing to develop as a very successful global business with an increasingly powerful brand. The other prong was Chemicals, which it was planned could provide a substantial counter weight for Castrol. From the later 1970s/early 1980s onwards, a portfolio of speciality chemicals businesses was put together, taking some of the businesses inherited from the past as the foundation and adding to them by buying in highquality speciality businesses as additions to the portfolio. The emerging rationale for Burmah Castrol that resulted was that the Group’s business was the sale and marketing of speciality oil and chemical products. The argument was that we were good at managing Castrol and that we would be able to demonstrate to shareholders and the market that we could also very successfully manage chemical businesses whose style and approach to the market would be in certain key respects similar to that followed by Castrol. We also argued that management had skill in spotting both good managers and sound investment opportunities: the combination would enable all the Group’s businesses to prosper and grow. There was sufficient similarity in terms of key factors for success between Castrol and the Chemicals businesses to enable senior management to add value across the portfolio. The idea that Burmah Castrol, as slimmed down, was a conglomerate per se was resisted.

Whilst the process of simultaneous slimming down and building up the chemical portfolio proceeded, the market’s response, as measured by improvement in the share price, was satisfactory. Castrol continued to perform strongly.

There was, however, internal questioning,