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AkzoNobel to raise production capacity in China

October 31, 2011

AkzoNobel said it is investing around €60 million to increase the production capacity of its automotive and aerospace coatings business in China. This investment will provide additional momentum for the company's accelerated growth strategy of achieving revenue of $3 billion in China by 2015, and strengthen its leadership position in the country's automotive refinishes market.

As well as constructing a new production facility in Changzhou, the company will build related warehousing, quality control laboratories, support facilities and offices on the new site. The project will increase capacity by around 25 million liters and the site is projected to be operational in early 2014.

"This investment builds on last year's acquisition of Prime Automotive and is all about meeting rapidly increasing customer demand," said Leif Darner, AkzoNobel's executive committee member responsible for performance coatings. "We are also seizing an ideal opportunity to further strengthen our leadership position."

"The automotive and aerospace market in China is forecast to further increase steeply in the coming years and this investment will allow us to capture our share of this growth,” said Jim Rees, managing director of AkzoNobel's automotive and aerospace coatings business. Changzhou is the ideal location for this facility as there is a good infrastructure already in place and it is ideally situated in the coatings 'center' of China, with close access to many of our customers."

AkzoNobel currently employs around 6,700 people in China, with revenue for 2010 totaling €1.3 billion, with a majority of the revenue generated from local demand. The new site in Changzhou will be the company's 29th manufacturing location in China.

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