Amsterdam, the Netherlands
YEAR ESTABLISHED: 1994
HEADCOUNT: 57,060 t (2008: 58,300)
Coatings REVENUEs: $12.154 billion t (2008: $14.124)
TotaL REVENUEs: $19.375 billion t (2008: $22.658)
net income: $397 million s (2008: $1.6 billion loss)
R&D Budget: $465 million t (2008: $521)
• Decorative Paints: 34%
• Performance Coatings: 29%
• Specialty Chemicals: 37%
Hans Wijers, CEO and chairman of the board of management; Tex Gunning, managing director of AkzoNobel Decorative Paints; Leif Darner, board member responsible for Performance Coatings.
In 2009 AkzoNobel was not immune to the effects of the financial and economic crisis. The largest global paint and coatings company saw its coatings revenue fall to $12 billion from $14 billion the year before. Lower demand in Decorative Paints—Europe, Americas and Asia—for the full-year resulted in nine percent lower volumes than 2008. In Performance Coatings—Marine and Protective Coatings, Car Refinishes, Industrial Coatings, Wood Finishes and Adhesives, and Powder Coatings—revenue was down 12 percent, due to lower demand across all businesses.
After its acquisition of ICI in 2008, AkzoNobel became the largest global supplier of decorative paints with a 15 percent market share. In addition to integrating the ICI business, a key strategy for Akzo in 2009 was a continued focus on expanding in emerging economies to offset weak demand in mature markets. More than 35 percent of revenue was recorded from high growth markets.
AkzoNobel continued its push into high growth markets. In Brazil, AkzoNobel’s Packaging Coatings business increased its reactor capacity while the Decorative Paints unit is investing in the “Tudo de Cor” (Everything in Color) program. This aims to build strong relationships with local communities and add color to peoples’ lives by, for example, painting buildings in deprived neighborhoods.
Emerging Europe is another high growth region AkzoNobel has targeted for expansion. The new solvent-based Decorative Paints plant in Pilawa, Poland, has been successfully scaled up while acquisitions were completed for Wood Adhesives in the Czech Republic/Romania and Slovakia.
During the year, plans were announced to build new capacity for Specialty Plastics and Coil Coatings in India.
In China, the largest growth market of all, the roll out of 184 new controlled Decorative Paints stores was completed. The new Protective Coatings factory in Suhzou, which opened in late 2008, is running at full capacity and the firm increased its footprint in the country with a new technology center for Powder Coatings that opened in Ningbo.
In the broader Asia Pacific region AkzoNobel invested in a new R&D laboratory in Singapore for its Marine and Protective Coatings business. Investment in increased distribution and sales strength were also made in Decorative Paints Indonesia and Vietnam.
On the acquisition and divestiture front, in Decorative Paints, AkzoNobel acquired two distributors during 2009 in Continental Europe. In Performance Coatings, Akzo divested Chemcraft Brazil and the non-stick businesses. It also completed the acquisitions of SABA and Kronospan in East Europe and announced the acquisition of the Dow Powder Coatings assets.
The general industrial market for coating metal is large and fragmented. AkzoNobel is focusing on powder coatings because this is the most sustainable form of coating for metal in this particular market. During the year, Akzo announced the acquisition of the Dow Chemical Company’s powder coatings business. Originally purchased by Dow in 2009 as part of its acquisition of Rohm and Haas, the business brings key technological know-how and synergy potential to AkzoNobel’s powder coatings activities. It will also enhance the company’s position in the U.S. The acquired business has global sales of several hundred million dollars and employs approximately 700 people, operating factories in the U.S., Europe and China. As well as complementing AkzoNobel’s position in key strategic markets—especially the U.S., automotive and trade coaters—the deal also introduces MDF and thermoplastic capabilities to AkzoNobel’s powder coatings portfolio.
Also during 2009, AkzoNobel inaugurated its Powder Coatings Technology Centre in Ningbo, Zhejiang province, China. This R&D center has a state-of-the-art laboratory and will have an initial team of 20 scientists and technicians organized in centers of expertise for the strategic market sectors. The new facility is located at the existing AkzoNobel powder coatings manufacturing site in Ningbo. All the centers of expertise—automotive, architectural, furniture, domestic appliance, IT and general industrial—and their corresponding marketing teams will be located at the center. AkzoNobel, owner of the brands Interpon and Resicoat, is the world’s largest manufacturer of powder coatings.