AkzoNobel will divest its decorative paints stores for professionals in Germany to independent wholesale distributors.
The move is intended to strengthen the performance of the company’s German Decorative Paints business by focusing its activities on the distribution and marketing of paint under brands such as Sikkens, Herbol and Consolan.
"We are changing the marketing strategy of our German Decorative Paints business to focus on our key organizational strengths of marketing and distributing our strong paint brands," said Ruud Joosten, the company's executive committee member responsible for Decorative Paints. "This is part of our ongoing efforts to strengthen both our organizational efficiency and our profitability in Germany."
The company currently operates 72 German stores selling professional paint and third party products, with the Decorative Paints organization employing around 950 people in Germany. In total, AkzoNobel's Decorative Paints, Performance Coatings and Specialty Chemicals businesses have 3,900 employees in Germany, along with 17 manufacturing plants and eight offices, generating revenue of close to €1.3 billion in the country in 2012.
The new set-up will allow AkzoNobel to select the most efficient distribution channels for its professional paint products, rather than operating its own stores. The company intends to enter into strategic partnership agreements with the future shop owners, as well as strengthening its relationship with its existing network of independent distributors.
Commenting on the company's plans, Werner Fuhrmann, the Executive Committee member responsible for Specialty Chemicals and Germany, said: "Germany has always been, and will remain, an important market for AkzoNobel. The company is continuing to invest in Germany, evidenced by recent acquisitions including Schramm (2011), Lindgens Metal Decorating Coatings (2010), Dow Chemicals' Rohm & Haas business (2010) and LII Europe (2009). A total of €140 million is also being invested in new technology at a chemicals plant in Frankfurt, which is expected to go on stream in the first quarter of 2014."
AkzoNobel will also be reviewing its office footprint in Germany. "These improvements are intended to reduce complexity and further improve the operational efficiency of our German activities," added Fuhrmann. "They will boost our competitiveness and help us to greater success for our businesses in Germany going forward."