|1.||Akzo Nobel (The Netherlands)||$6.974 billion|
|2.||Henkel (Germany)||$6.236 billion|
|3.||ICI Group (UK)||$5.817 billion|
|4.||Sherwin-Williams (USA)||$5.728 billion*|
|5.||PPG Industries (USA)||$5.566 billion|
|6.||DuPont (USA)||$3.78 billion*|
|7.||BASF Coatings (Germany)||$2.714 billion|
|8.||Valspar (USA)||$2.713 billion|
|9.||RPM (USA)||$2.556 billion|
|10.||SigmaKalon (The Netherlands)||$2.215 billion|
|11.||3M (USA)||$2 billion*|
|12.||Nippon Paint (Japan)||$1.9 billion*|
|13.||Kansai Paint (Japan)||$1.775 billion|
|14.||H.B. Fuller (USA)||$1.512 billion|
|15.||Sika (Switzerland)||$1.29 billion|
|16.||Masco (USA)||$1.264 billion|
|17.||COMEX (Mexico)||$1.22 billion|
|18.||Rohm and Haas (USA)||$1.158 billion|
|19.||Jotun (Norway)||$1.042 billion|
|20.||Benjamin Moore (USA)||$1 billion*|
|21.||AB. Wilh. Becker (Sweden)||$985 million|
|22.||DAW (Germany)||$952.7 million|
|23.||Hempel (Denmark)||$814.4 million|
|24.||Asian Paints (India)||$774.54 million|
|25.||Dai Nippon Toryo (Japan)||$600 million|
|26.||Tikkurila (Finland)||$569.76 million|
|27.||Brillux (Germany)||$530 million*|
|28.||Forbo (Switzerland)||$505.54 million|
|29.||Orica (Australia)||$434.79 million|
|30.||Barloworld (South Africa)||$404 million|
|31.||Arch (USA)||$358 million|
|32.||Kelly-Moore (USA)||$345 million|
|33.||Wattyl (Australia)||$335.63 million|
|34.||KCC (South Korea)||$312 million|
|35.||Chugoku Marine Paint (Japan)||$310 million*|
|36.||Helios (Slovenia)||$285.9 million|
|37.||Dyrup (Denmark)||$280.96 million|
|38.||Dunn-Edwards (USA)||$280 million*|
|39.||Yasar (Turkey)||$275 million*|
|40.||Berger (India)||$264 million|
|41.||Sico (Canada)||$257.78 million|
|42.||Dainippon Ink and Chemical (Japan)||$254.43 million|
|43.||National Paints (Jordan)||$234.93 million|
|44.||Flugger (Denmark)||$228.64 million|
|45.||Rock Paint (Japan)||$224.79 million|
|46.||CIN (Portugal)||$221.7 million|
|47.||Yung Chi Paint and Varnish (Taiwan)||$220.5 million|
|48.||Altana (Germany)||$218 million|
|49.||Ameron (USA)||$210 million|
|50.||Renner (Brazil)||$209 million*|
|51.||Grebe Group (Germany)||$201.75 million|
|52.||DPI (South Korea)||$190 million|
|53.||Shinto Paint (Japan)||$171.89 million|
|54.||Cloverdale Paint (Canada)||$162 million*|
|55.||Tigerwerk (Austria)||$160 million*|
|56.||M.A.B. Paints (USA)||$150 million|
|57.||Industrias Titan (Spain)||$149 million*|
|58.||Tohpe (Japan)||$142.87 million|
|59.||Ace Paint (USA)||$141 million|
|60.||Vogel Paint (USA)||$140 million|
|61.||Boero Group (Italy)||$133 million|
|62.||Toa Paints (Thailand)||$130 million*|
|63.||Spraylat (USA)||$125 million|
|64.||Empils (Russia)||$115 million|
|65.||RedSpot (USA)||$100 million|
1. AKZO NOBEL
Sales: $6.974 billion
HQ: Arnhem, the Netherlands
Web Site: www.akzonobel.com
Key Personnel: G.J. Hans Wijers, chairman and CEO. General managers: Rinus Rooseboom, car refinishes; Jan Andersson and Leif Abildgaard, decorative coatings; Robert Torba, industrial finishes; Bill McPherson, marine and protective coatings; and Rob Molenaar, powder coatings.
Major Products: Decorative, industrial, marine and protective coatings and automotive refinish paint.
New Products: Sikkens’ Alpha Tacto, textile-effect paint that can reproduce the look and feel of suede, leather or woven fabric; Interchar next generation fireproofing material, which is designed to give unique protection to high-rise structures and public buildings.
Recent Acquisitions: Swiss Lack, Zweihorn, Toide Paint, Coatech, Khimrezerv, Balakom, Sico.
CEO Hans Wijers (back row center) is pictured at the official opening of Akzo Nobel’s new decorative coatings site at Suzhou near Shanghai in China, which took place in June 2005. The plant, which produces water-based wall paint also includes R&D facilities and a warehouse for raw materials and finished goods.
Akzo’s revenue increase was mainly fueled by growth in the emerging markets of Asia Pacific, Eastern Europe and the Middle East, which also reflects the company’s strategy to expand in these areas and offset pressure in mature markets caused by steeply rising raw material costs and difficult economic conditions, especially in Western Europe.
2005 was an active year for the company on the acquisition and expansion front. During the year, Akzo opened two new powder coatings facilities and two new decorative coatings plants in China and Vietnam. It also announced its intention to acquire the Chinese decorative coatings company Guangzhou Toide Paint Manufacturing, established a powder coatings joint venture in Egypt, and invested in the construction of a new powder coatings plant in Russia. At the end of 2005, the emerging markets represented 34% of Akzo Nobel’s worldwide revenues.
Akzo Nobel’s Decorative Coatings unit is made up of the Decorative Coatings Europe and Decorative Coatings International businesses, and accounted for 36% of Akzo Nobel Coatings’ revenue in 2005.
According to the company, Decorative Coatings Europe had a difficult year due to a later than predicted economic recovery and tight margin pressure. In this mature market, Akzo continued to improve its portfolio through selective acquisitions. During 2005, the company agreed to acquire Swiss Lack, the leading supplier of decorative coatings in Switzerland, and also boosted its activities in Germany with the ICI Group’s wood finishes business, Zweihorm GmbH, which is based in Hilden. In addition, it continued to further expand its commercial distribution network of European decorative coatings business by acquiring a number of wholesalers in Germany, the largest market for architectural paint in Europe.
Decorative Coatings International has aggresively accelerated growth in emerging markets. In terms of Deco International’s performance at the country level, Russia and China—the two major growth areas for 2005—both posted double-digit growth. New capacity at the company’s Moscow facility enabled it to make additional investments at the site earlier than expected.
Akzo Nobel also reinforced its commitment to becoming China’s top coatings company by signing an agreement to acquire the coatings activities of Guangzhou Toide Manufacturing Co. Currently ranked as one of the biggest private Chinese manufacturers of emulsion paint, Toide Paint is also active in the wood varnishes sector.
Based in Guangzhou, the company commands a strong market position in southern China, with more than 200 outlets and distributors. It also has a solid presence around Beijing and Shanghai.
“This agreement is a clear indication of our ambition to become the number one coatings company in China,” said Akzo Nobel CEO, Hans Wijers. “We are making a concerted effort to grow our decorative coatings operation and this investment will substantially increase our volumes of emulsion paint, the fastest growing segment on the Chinese paint market.”
Elsewhere, further inroads were made in some of the Central and Eastern European markets. Deco International signed an agreement to acquire a 51% controlling share in the coatings activities of Ukrainian company Khimrezerv.
Additionally, new decorative coatings plants were officially opened in Vietnam and China—one near Ho Chi Minh City, the other in Suzhou near Shanghai.
On the new product front, the company announced that its Decorative Coatings business had developed Alpha Tacto, a textile-effect paint that can reproduce the look and feel of suede, leather or woven fabric. Marketed under the Sikkens line, Alpha Tacto is able to provide two distinct effects, depending on how it is applied to the wall.
The Industrial Activities business unit, which accounted for 31% of Akzo Nobel Coatings’ revenue in 2005, is made up of the Industrial Finishes and Powder Coatings businesses. According to the company, Industrial Activities put in a strong performance, especially in the second half of 2005 due to successful marketing initiatives, which expanded the business base, in addition to the improvement of average pricing in all markets. Operations in the frontier markets of China, India, Brazil and Eastern Europe sustained top-line growth.
Conditions in the global coil coatings business were particularly unfavorable due to volatile steel prices and a hesitant commercial construction industry. Wood coatings benefited from a healthy residential construction industry, which kept demand for coatings for flooring, kitchen cabinetry and building products at a strong level throughout 2005. Consumer electronics and the adhesives business units also improved during the year.
Powder Coatings posted growth in revenues in line with the record year of 2004, achieving good revenue growth in the newly developing powder markets of Central and Eastern Europe, where there is now a need for manufacturing in the region. Akzo, therefore, started construction work on a new powder coatings plant in Russia. Located at Orekhovo-Zuevo, 100 kilometers east of Moscow, the facility will supply markets throughout Russia, Ukraine and Belarus among other countries in the region.
Akzo also invested in the Middle East with the acquisition of a controlling 60% share in Egyptian market leader Coatech. The joint venture company, now known as Akzo Nobel Powder Coatings SAE, operates from the company’s existing modern manufacturing facility near Cairo.
According to Rob Molenaar, general manager of Akzo Nobel’s powder coatings business unit, the acquisition gives Akzo Nobel a much-needed local operation.
“This joint venture gives us the sort of local presence in the Middle East which has so far been lacking in our worldwide activities,” he said. “The combination of our cutting-edge technology and extensive experience in powder coatings, together with Coatech’s established reputation for excellence in quality and service, creates a formidable partnership and one which we are certain will benefit customers throughout the region.”
In China, Akzo Nobel Powder Coatings built a powder coatings facility at Langfang. The new site, located between Beijing and Tianjin, was constructed to replace a former plant in Beijing. Built on a 22,000 square meter site which includes scope for further expansion, the Langfang facility was inaugurated just a few months after the company’s powder coatings business expanded its operations in South China with the opening of a second factory at Baoan in Guangdong Province.
The Marine & Protective Coatings unit, which accounted for 17% of Akzo Nobel Coatings’ revenue in 2005, had another good year. International marine coatings continued to benefit from record levels of ship newbuilding. The company sold record levels of its Intershield for newbuilding, and also during 2005, it coated its 100th vessel with Intersleek, an environmentally-friendly “foul release” antifouling.
International protective coatings felt the squeeze on margins more than other market areas, particularly in the U.S., while positive growth was posted in China, Central and Eastern Europe, and Australasia, according to the company. On the product front, Interchar, a new member of the Chartek family of fire protection products, was launched in 2005. Based on technology created for NASA, Interchar offers the construction industry significant benefits in terms of keeping buildings safer from fire damage.
Yacht coatings fell back from its 2004 peak due to weaker demand in the U.S. market, while aerospace coatings continued to benefit from higher build rates of new aircraft and livery changes on existing ones. Overall, aerospace coatings delivered its best ever results in 2005.
Lasty, the Car Refinishes business unit, which accounted for 16% of Akzo Nobel Coatings’ revenue in 2005, remained under pressure and restructuring programs are being carried out to address the situation. Stagnating growth in the refinishes market in the U.S. and Western Europe during 2005 was partly offset by market growth outside these territtories, notably in Eastern Europe and Asia.
Sales: $6.236 billion
HQ: DUSSELDORF, Germany
Web Site: www.henkel-technologies.com
Key Personnel: Ulrich Lehner, chairman of the management board of Henkel KGaA; Alois Linder, executive vice president, consumer and craftsmen adhesives; and Jochen Krauter, executive vice president, Henkel Technologies.
Major Products: Adhesives and sealant technologies sold in the industrial, professional and DIY markets.
Loctite 3355 is ideal for optical, laser and other assemblies where alignment of small parts is critical.
Recent Acquisition: Chemofast ramcord GmbH, Polybit Industries Ltd., European sealants business for DIY and the professional trades sector from Rhodia, Converter Adhesives & Chemicals Pvt. Ltd.
Henkel’s Consumer and Craftsmen Adhesives business unit, which accounted for 15% of the company’s total sales in 2005, posted a 20.5% increase in sales by the year’s end. A large proportion of this growth is attributable to the acquisition of Sovereign Specialty Chemicals in 2004.
The business sector focuses on two market segments: adhesives and adhesives tapes for home, school and office; and adhesives and sealants for construction, DIY and craftsmen.
Pursuing a dual strategy of combining organic growth through product innovation and regional expansion on the one hand, with selective acquisitions on the other, Henkel is looking to continue growing its presence around the world.
While stagnation in the company’s traditional European core markets persisted, the markets of, in particular, Eastern Europe, Latin America and Asia were strong. The OSI assembly adhesives and sealants business acquired as part of Sovereign in North America exhibited significant growth, the company said.
The company is also targeting investments toward further growth regions exhibiting strong building construction activity. It’s acquisition of Polybit, a leading supplier of relevent products in the United Arab Emirates, is an example of a step in this direction.
Henkel’s sealants operation continued to exhibit dynamic growth in 2005. Having acquired the sealants business of Rhodia at the end of 2005, the company can look forward to not just strengthening its position in the core markets of Europe, but also further growth opportunities in other regional markets arising from access to Rhodia’s technologies.
The tile adhesives business also performed well, particularly in Eastern Europe where the company opened an additional production facility in Romania.
In terms of new products, the Consumer and Craftsmen Adhesives unit launched several products including a new adhesive that combines all the advantages of epoxy and light cure chemistries, but works on colored and opaque substrates such as metals, plastics, glass and ceramics that cannot transmit light. Loctite Pre-Activated Epoxy 3355 adhesive can be applied directly onto an opaque part, cures to fixture strength in minutes and reaches full cure in hours at room temperature. The epoxy adhesive provides excellent bond strength, chemical resistance and high-temperature performance, according to the company. Single component, medium viscosity Loctite 3355 requires no mixing and shrinks very little (<0.7%) during cure, making it ideal for optical, laser and other assemblies where alignment of small parts is critical. Loctite 3355 can be used for bonding and shallow potting of optical connectors, fibers, lasers, lenses, prisms and electronics such as computers, laptops and printers.
The Henkel Technologies business sector, which accounted for 27% of the company’s total sales and supplies adhesives, sealants and surface treatment products for industrial applications, saw its sales increase 17% in 2005. Organic sales rose by 5.5%, with double-digit percentage increases in all regions apart from Western Europe. The low level of growth in Western Europe is primarily attributable to a regional downturn in activity in the automotive and electronics sectors and the weakness of the facade and construction components segment.
In 2005, Henkel expanded its business in the aerospace industry, registering increasing demand for composite adhesives, particularly in the form of high-strength epoxy resin products. Henkel’s adhesives and sealants for this segment passed a major challenge with the inaugural flight of the Airbus A380, the largest passenger airliner in the world.
Henkel’s activities serving the automotive industry profited from the fact that more and more prefabricated components and foam products are being used in order to improve vehicle acoustics. Products offering enhanced coatings and processing capabilities also strengthened this segment. In addition, the acquisition of Orbseal and the development of various new applications, helped boost Henkel’s North American business to the extent that, despite the weakness of the Western European market, the company was able to achieve double-digit percentage growth in the automotive sector worldwide.
Henkel’s operations serving the electronics industry underwent expansion due largley to the successful introduction of its lead-free solder pastes and first-time approvals from globally active customers interested in their use.
The company’s businesses serving the steel industry also experienced further expansion. The introduction of a range of innovative surface protection products enabled Henkel to expand its scope of applications in the European and American markets, as well as in Asia. Henkel also increased its market share in relation to consumer durables, due to innovations in air and water filtering technology and the successful launch of Bonderite NT, a new product for metal pretreatment applications.
The market for consumer goods developed well, especially in the packaging industry, leading to strong organic growth in this segment, according to the company. Its film laminating adhesives business was boosted as well. All regions contributed to the growth achieved, with increased market share in North America ensuing from the Sovereign acquisition, and the acquisition of CAC strengthening its business in India.
Henkel’s activities in the field of industrial maintenance, repair and overhaul also continued to develop well. Major contributory factors in this regard include a significant expansion of its market activities in relation to engineering adhesives and the company’s increased involvement in the renewable energies sector.
Success Story: The use of Henkel’s chromium-free passivation, Passerite 5004, is Voestalpine’s final step to becoming a completely chromium-free steel company.
The European Union is determined to put an end to the use of hexavalent chromium and has issued two directives to enforce this policy. One addresses the automotive industry, the other the household appliance industry. With a third on its way, concerning the construction industry, the pressure will be spread over several industries. However, right now it is mostly felt by the steel industry, especially by companies like Voestalpine.
Voestalpine supplies the automotive industry and the household appliance industry with hot-dip-galvanized and electrolytic galvanized thin sheet. In their effort to comply with the legislation they turned to Henkel. Both companies maintain a long and successful partnership together and Voestalpine’s previous experiences with new technologies from Henkel were very promising. When their request arrived, Henkel had more than five years of experience with chromium-free technology and were happy to accept the challenge to develop a completely chromium-free passivation system for galvanized steel.
The first line trials at Voestalpine were carried out two years ago and were only followed by a few additional tests as well as a little fine-tuning. Last July Passerite 5004 was fully integrated into the production process and Voestalpine’s HDG line 3 became their first chromium-free production line. The other lines were subsequently converted and by the end of January 2006 the transformation was completed.
As a result, Voestalpine has driven out all chromium but maintains the quality of the old process. Salt spray tests, humidity tests and humidity stack tests have shown that Passerite 5004 offers the same level of corrosion protection as chromium (VI)-passivation does. Other tests demonstrated the quality of the steel in additional processing, like welding. On top of that Passerite 5004 enables HDG steel strip production with a perfect surface appearance.
3. ICI GROUP
Sales: $5.817 billion
IMPERIAL CHEMICAL INDUSTRIES PLC
HQ: SLOUGH, UK (ICI PAINTS)
BRIDGEWATER, NJ (National STARCH)
Phone: 44-20-7009-5000 (ICI PAINTS)
908-685-5000 (National Starch)
Web site: www.ici.com • www.nationalstarch.com
Key Personnel: David Hamill, director of ICI and chief executive of ICI Paints, and William Powell, director of ICI and chief executive of National Starch.
Major Products: Paint and coatings (ICI Paints) and adhesives (National Starch).
New Products: Cuprinol Sprayable fence treatment, UK Trade Sterishield, UK Trade Metalshield, This Old House exterior paint, Hammerite, Dulux Supergloss 5-in-1, Cool 200.
ICI’s This Old House exterior paint line.
ICI Paints maintains a global presence with major manufacturing facilities located in the U.S. UK, Brazil, Argentina, Germany, the Netherlands, France, China, India and Malaysia. Additional manufacturing facilities are in 14 other countries. The majority of the company’s sales are generated from North America (39%) and Europe (36%), while Asia (15%) and Latin America (9%) account for the remaining revenue.
In 2005, paint sales were six percent ahead of 2004 on a comparable basis with growth for all regions of the decorative paint business. Sales for Decorative Europe were one percent ahead of 2004 with growth for UK trade sales and sales in Ireland and Eastern Europe partly offset by lower sales in the UK retail market. Decorative North America sales were four percent up on 2004 with growth in all principal market sectors.
Decorative Asia sales were 17% up from 2004 with both volume growth and increased selling prices across the region. Growth was particularly strong in China, India, Pakistan and Vietnam. Sales for Decorative Latin America were nine percent ahead compared with 2004. Packaging coatings also delivered a strong performance, with sales up 14% on 2004.
The decorative paints business has well-established brands in paint, woodcare, metalcare, adhesives and fillers including Dulux, Glidden, Devoe, Valentine, Coral, Alba, Xyladecor, Hammerite, Polycell, Polyfilla and Alabastine.
In 2005, the business launched many new products under these brands such as Cuprinol Sprayable, an award winning water-based spray system for fence treatment; UK Trade Sterishield, a water-based hygiene paint utilizing a silver bactericide; UK Trade Metalshield, which provides eight-year protection for ferrous and non-ferrous metals in a simple system requiring fewer coats than competitive systems; This Old House range in the U.S.—a premium exterior paint; Hammerite direct-to-galvanized-metal paint in Brazil; Dulux Supergloss 5-in-1, launched in India, offering 300 glossy, clean colors, with long-life, anti-yellowing and good coverage properties; and Devoe Regency, a high-solids acrylic enamel.
The adhesives division of National Starch, which is one of the largest producers of specialty industrial adhesives in the world, reported that its sales in 2005 were nine percent ahead of the previous year. Several markets experienced double-digit growth including North America, Latin America and Asia, notably China and India, while in the latter part of the year demand weakened in Europe.
During the year, ICI invested in a new adhesives manufacturing facility in Brazil to meet growing demand for industrial adhesives in the country. The investment introduces local provision of adhesives, some previously imported by the company for the woodworking, packaging and paper converting sectors, some for export, and some to support growth from marketing programs to local accounts.
The factory is operated by National Starch and makes hot-melt, water-based adhesives and emulsion polymers. The largest of its type in the region, the factory is located 34 miles northwest of Sao Paulo on a greenfield site owned by ICI that is scheduled for expansion in output this year.
“This investment and plans for expansion at the Jundiai site reflect our confidence in the future of the markets in Brazil and the region,” said Tom Agin, senior divisional vice president of National Starch’s Latin America and South Africa adhesives business.
Sales: $5.728 billion*
HQ: Cleveland, OH uSA
Web Site: www.sherwin.com
Key Personnel: Christopher M. Connor, chairman and CEO; Sean P. Hennessy, senior vice president, finance and CFO; and Conway G. Ivy, senior vice president, corporate planning and development; John G. Morikis, president; paint store segment; Thomas W. Seitz, president and general manager; consumer segment; Blair P. LaCour, president and general manager, automotive finishes segment; and Alexander Zalesky, president and general manager, international coatings.
Major Products: Architectural and decorative paint, stains and varnishes, wood finishing products, caulks, adhesives, automotive finishes and industrial and marine coatings.
New Products: Duration Home interior paint, ProMar 200 XP, Builders Solution interior paint, Loxon XP waterproofing masonry coating, Sher-Wood BAC wiping stain, Polane SP Polyurethane Enamel, Sher-Nar PVDF, Sher-Wood KemVar Varnish LF, Waterborne CARC, Ultra-Cure Waterborne UV, Dutch Boy Ready to Roll, Dutch Boy Celing Solutions color transforming ceiling paint, Minwax Wood Finish in Red Chestnut and Gunstock, Thompson’s WaterSeal No Drip exterior gel stain, Krylon H20 latex aerosol paint, AWX waterborne coatings, Planet Color.
Founded in 1866, The Sherwin-Williams Company has a long history in the manufacture, distribution and sale of paint, coatings and related products to professional, industrial, commercial and retail customers primarily in North and South America. Shewin-Williams’ consolidated net sales in 2005 topped $7.1 billion, a rise of 17.6% over 2004. (The company’s ranking excludes estimated sales from non-paint items and other administrative items reported by the company.) Sherwin-Williams’ consolidated net income rose 17.8% to $463.3 million.
With coatings sales of approximately $5.728 billion, an increase of roughly $1 billion over the previous year, the company is the leading manufacturer of paint and coatings in North America. Acquisitions, primarily Duron, Inc. and Paint Sundry Brands Corporation acquired in Sept. 2004, contributed to a six percent increase in sales in 2005.
Net sales for Sherwin-Williams’ Paint Stores segment rose 21.9% to $4.84 billion from $3.98 billion in 2004, with comparable store sales improving by 13.6%. Operating profit from the segment increased 23.4% to $592.5 million. According to the company, this increase primarily came from continuing strong domestic architectural paint sales to contractor and DIY customers. Sales from acquisitions also contributed to the segments success.
Sherwin-Williams’ paint stores serve three major market segments in the North American coatings market including architectural paint customers, OEM product finishers and industrial maintenance and marine coatings users. The company reported that it achieved solid growth in all three of these segments.
In 2005, Sherwin-Williams opened 98 new stores, ending the year with 3,081 stores in operation in North America compared to 2,983 stores at the end of 2004.
On the new product front, the Paint Stores segment introduced 18 new products for the architectural, OEM product finishes and industrial maintenance and marine markets in 2005. Some of these new products include Duration Home interior paint, which prevents stains from penetrating and enables easy cleaning with a damp sponge; ProMar 200 XP single coat, which is equal to two coats of traditional eggshell and flat finishes, saving contractors time and labor cost; Builders Solution interior paint, a two-coat system that starts with a high-build surfacer that masks drywall imperfections and establishes a smooth, even surface for topcoat; Loxon XP waterproofing masonry coating, which is applied directly to concrete, eliminating the need for primer; Sher-Wood BAC wiping stain; Polane SP Polyurethane Enamel for heavy equipment; Sher-Nar PVDF for coil and extrusions; Sher-Wood KemVar Varnish LF for kitchen cabinets; Waterborne CARC for military equipment; and, Ultra-Cure Waterborne UV for multiple wood markets.
Net sales in the consumer segment increased 7.7% to $1.4 billion from $1.3 billion in 2004. Acquisitions accounted for all of the sales increase in the cosumer segment. Operating profit for the year declined $18.6 million, or 9.9%, to $169.1 million. Operating profit was adversely affected by increased raw material costs, according to the company.
With roughly 56,000 retail outlets in the U.S. that sell coatings or coatings related products, approximately 35,000 of these outlets offer one or more product lines manufactured by the consumer segment and sold under such brand names as Dutch Boy, Pratt & Lambert, Kryon, Minwax, Thompson’s WaterSeal and Purdy.
In 2005, Sherwin-Williams’ consumer segment introduced the Dutch Boy Ready to Roll paint container, which was recognized as “The Most Innovative Package of the Year” by the Institute of Packaging Professionals. Krylon H20, a latex paint in aerosol form was launched and is ideal for indoor use and cleans up with soap and water. The launch of the Pratt & Lambert Never Compromise Color Sample Selector lets customers explore colore palettes and preview color combinations before they paint an entire room.
Net sales for Sherwin’s automotive finishes segment increased 7.1% to $550.8 million from $514.3 million in 2004. The majority of this increase came from strong international sales, new product line introductions and favorable currency fluctuations, according to the company. Operating profit for 2005 declined $800,000, or 1.4%, to $57.2 million.
During the third quarter of 2005, the automotive finishes segment sold its majority interest in an automotive coatings joint venture in China, resulting in a loss of $7.9 milion, which impacted the company’s operating profit.
Also during 2005, the automotive finishes segment opened seven new branches, bringing its total to 203 in the U.S., Canada, Jamaica, Chile and Peru. The segment also introduced a new automotive waterborne basecoat/clearcoat system called AWX, is formulated to comply with stringent European Union (EU) VOC regulations scheduled to take effect in 2007. The segment also launched Planet Color, a collection of optically enhanced automotive coatings for the custom finishing market.
Net sales for the international coatings segment grew 21.8% to $388 million in 2005 from $318.6 million in 2004. According to the company, favorable currency fluctuations increased sales for the segment by 9.8%. Operating profit in this segment for the year grew to $23.6 million from $18 million in 2004, an increase of 30.6%. The company said this was primarily the result of higher sales volumes, operating efficiencies resulting from manufacturing volume increases and tight expense control.
The international coatings segment made a concerted effort during 2005 to strengthen its brand identity and expand distribution outside North America. In Brazil, it completed an extensive overhaul of its packaging to better align the images of its various brands and strengthen their association with Sherwin-Williams. In Argentina, the segment was listed among the top 60 companies to work for based on an annual survey. In Italy, the segment partnered with an established distributor to relaunch its Ronseal brand wood care coatings line.
On the management side, in July, David F. Hodnik, retired vice president and CEO of Ace Hardware Corporation, was elected to Sherwin-Williams’ board of directors. In addition, once again, Fortune Magazine named Sherwin-Williams to their list of the “100 Best Companies to Work for.”
Success Story: The U.S. General Services Administration (GSA) honored Sherwin-Williams with two awards for outstanding business practices.
The Director’s Award was given to Sherwin-Williams in recognition of its business acumen, cooperation, customer service and contribution to the GSA mission—consistently providing the best value in a fair and competitive manner. The honor also further acknowledged the company for consistency in meeting or exceeding customer expectations, its timely sales reporting and for maintaining up-to-date product and pricing information in the GSA Advantage System.
Sherwin-Williams was also recognized by GSA as a Most Environmentally Friendly Contractor for ongoing research and development of products that meet or exceed environmental standards. The environmental award also recognized Sherwin-Williams’ development of durable products that reduce the amount of waste and chemicals that are released into the environment, have zero or low VOCs, low odor, anti-microbial properties and are silica-free. Sherwin-Williams’ environmentally friendly products meet or exceed GS-11 criteria for coatings used in LEED certified buildings.
5. PPG INDUSTRIES
Sales: $5.566 billion
HQ: PITTSBURGH, PA USA
Web Site: www.PPG.com
Key Personnel: Charles E. Bunch, chairman and CEO; J. Rich Alexander, senior vice president coatings; William A. Wulfsohn, senior vice president, coatings managing director, Europe; Charles Kahle, director, coatings R&D; Dick Beuke, vice president, architectural coatings; Dennis Kovalsky, vice president, automotive coatings; Garry Goudy, senior vice president automotive aftermarket; and Marc Talman, key manager, packaging.
Major Products: Architectural/decorative paint, coatings and stains, automotive OEM and refinish coatings, industrial coatings and packaging coatings.
New Products: Manor Hall Timeless super premium interior paint; CeramiClear clearcoat for automobiles.
Recent Acquisition: Crown Coating Industries.
In 2005, PPG’s coatings sales rose five percent ($291) to $5.566. The company said sales rose three percent across all businesses except automotive due to higher selling prices; one percent due to improved volumes as increases in the company’s aerospace, architectural and OEM businesses offset volume declines in automotive refinish and industrial coatings; and one percent due to the positive effects of foreign currency translation. Operating income decreased $168 million in 2005.
Manor Hall Timeless provides a durable, smooth, non-porous finish, combining effective stain and burnish resistance, washability and antimicrobial additives.
“Our focus on profitable growth, meanwhile, has remained unchanged,” he continued. “We anticipate continued organic growth, as evidenced by the performance of many of our businesses in 2005, including architectural coatings and aerospace products. Furthermore, we want to accelerate that growth through potential acquisitions, leveraging our strong balance sheet and consistent free cash flow.”
PPG’s strategy for accelerating growth and strengthening its businesses is focused heavily on building a presence in emerging markets as well as investing in the manufacturing technologies that meet the demands of the market place.
The Asian coatings market represents a perfect example of the company’s growth strategy in action. Since 1999, PPG’s coatings sales in the region have more than doubled, growing at a rate of 18% per year. To generate additional growth, in 2005, PPG acquired Crown Coating Industries of Singapore, Asia’s leader in radiation-curred coatings for the flooring industry. The company operates facilities in Singapore and Shanghai.
“Crown enables us to provide manufacturers in Asia with local supply of the high-quality coatings that customers have come to expect from PPG,” said J. Rich Alexander, senior vice president, coatings. “It also enables us to grow our presence in the global wood coatings business, where our technology is considered the industry leader.”
In addition, PPG announced it will open a coating application facility in Taiwan for fasteners and small parts in the second quarter of 2006. Today PPG’s Asian coatings sales constitute slightly less than ten percent of the company’s worldwide coatings sales.
In architectural coatings, meanwhile, a business where success relies heavily on distribution, according to the company, PPG expanded its presence in 2005 with the acquisition of 42 service centers in eight Midwestern states from Iowa Paint Manufacturing. In addition, PPG acquired the Iowa and Sterling brands. Since 2001, PPG has added nearly 150 company-owned service centers to its network that now includes nearly 380 locations. In addition, PPG supplies paint to two of the big three home center chains, Lowe’s and Menards, which together added 156 stores in 2005. As a result of the growth in company-owned service centers and home centers, PPG’s architectural coatings sales have increased approximately 14% per year since 1997.
PPG has also added coating capabilities at its Wichita Falls, TX performance glazings plant to meet the growing demand for low-emissivity glass and accomodate future generations of energy efficient, high performance products, the company said. Scheduled to come online in the first half of 2006, the system, which applies thin, transparent coatings to enhance the performance of glass, will become the sixth in the PPG network, increasing the company’s participation in a fast-growing segment of the architectural glass industry.
In terms of new products the company has launched several in 2005 including Manor Hall Timeless super premium interior paint, which is an expansion of its popular super-premium exterior line. Backed by a lifetime guarantee, Timeless does not require extensive and sometimes damaging scrubbing to remove surface dirt. The paint also meets stringent environmental regulations for minimal impact on indoor air quality and a low VOC of less than 50 g/l.
Manor Hall Timeless super premium interior paint is available in matte, eggshell plus and semi-gloss finishes.
PPG has also been actively developing new products based on nanotechnology including CeramiClear clearcoat for automobiles. As the final layer of paint applied to automobiles, CeramiClear clearcoat provides scratch and mar resistance and retention of gloss throughout a vehicle’s life cycle, according to the company.
Sales: $3.78 billion*
HQ: WILMINGTON, DE
Web Site: www.performancecoatings.dupont.com
Key Personnel: Charles O. Holliday, Jr., chairman and CEO; Thomas M. Connelly, Jr., senior vice president and chief science and technology officer; Terry Caloghiris, group vice president, DuPont Coatings & Color Technologies; Douglas L. Moore, vice president/general manager, DuPont Advanced Coatings Systems; Eric G. Melin, vice president/general manager, DuPont Refinish; Marty M. McQuade, vice president/general manager, DuPont Automotive Systems.
Major Products: Automotive OEM and refinish coatings and industrial finishes.
New Products: DuPont Professional Grade driveway products, DuPont 1052R and 1056R.
Recent Acquisition: Powder Coatings de Mexico, Standox-Max.
DuPont’s Coatings and Color Technologies unit recorded sales of $6.2 billion in 2005. Core coatings markets served by the Coatings and Color Technolgies unit include automotive OEM and refinish, industrial coatings and architectural coatings. DuPont’s 2005 coating sales are estimated to be $3.78 billion.
2005 saw a major achievement in the Japanese market as DuPont opened a $10 million laboratory in Aichi Prefecture to facilitate technical services and approvals for automotive OEM coatings used by Japanese auto manufacturers worldwide, and to support their home country assembly operations. The facility is managed by DuPont and DuPont Shinto Automotive Systems, a joint venture between DuPont and Shinto Paint Company.
DuPont’s new $10 million automotive paint laboratory in Aichi, Japan will focus on the development and testing of automotive OEM coatings.
In the Americas, DuPont completed its acquisition of Powder Coatings de Mexico, strengthening the company’s position as a leader in the powder coatings market throughout the Western Hemisphere. Additionally, 2005 saw the acquisition of the Standox-Max joint venture in Mexico, resulting in the opening of an upgraded distribution network.
The DuPont Aviation Finishes brand was also launched in 2005 as a key growth initiative, delivering a complete product line of high-performance coatings for completion and refinishing of aircraft.
On the new product front, Dupont Refinish added DuPont 1052R and 1056R to its unercoat range. The two new productive surfacers have been designed to meet today’s bodyshop demands for productivity; both products feature fast drying and high filling capabilities.
7. BASF COATINGS
Sales: $2.714 billion
HQ: Müenster, Germany
Phone: 49 2501-14-0
Web Site: www.basf-coatings.com
Key Personnel: Jahn Raimer, CEO, BASF Coatings AG; Klaus-Peter Löbbe, member of the board of executive directors responsible for coatings globally; Rainer Blair, group VP, coatings, North America; Jacques Delmoitiez, group VP, automotive refinish/commercial transport coatings; Wolfgang Micklitz, director OEM coatings for Asia-Pacific; Peter Steiert, group VP- industrial coatings solutions/global strategy and regional business unit; and Rui Goerck, VP, coatings South America and head of Decorative Paint Solutions.
Major Products: Automotive OEM and refinish coatings, industrial coatings and decorative paint.
New Products: Glasurit 923-55 MS Clear, Glasurit 923-45 HS Clear scratch resistant VOC 3.5, Jet Black Ultra-Cool SP, R-M 2K aerosol urethane clear coat and epoxy primers, R-M DC5600 CTR Production Clear.
Recent Acquisition: Rhenania Coatings GmbH, BASF Akzo Nobel, BASF NOF Coatings.
In 2005, BASF’s sales increased by $196 million to $2.714 billion. While sales increased in all regions, significantly higher raw material costs put pressure on the company’s margins. As a result, earnings were lower than in 2004.
Glasurit 923-45 HS Clear
While the company increased both volumes and sales of automotive OEM and refinish coatings, higher raw material costs depressed its margins in the automotive OEM coatings business unit. This was compounded by the impact of sluggish growth in the automotive industry in Europe and North America.
In the refinish coatings business, the company’s earnings remained at levels equal to 2004, although margins were lower as well due to changes in the company’s product mix and higher raw material costs. At the same time, BASF achieved above-average increases in exports to the emerging market of Eastern Europe.
As for the industrial coatings business, BASF continued with its efforts to optimize its product portfolio and restructure the business. In the architectural coatings business in South America, BASF strengthened its market position with its Suvinil brand.
2005 was a busy year for BASF on the acquisition front as the company continues to extend its reach around the globe. In East Asia BASF strengthened its business when it signed a contract with NOF Corporation of Japan for BASF to fully acquire BASF NOF Coatings (BNC), a joint venture between the two companies. BASF now operates the company under the name BASF Coatings Japan.
The acquisition includes BNC’s production sites in Totsuka, Kanagawa prefecture, and Ako, Hyogo prefecture, Japan. Formed in 2000, the BNC joint venture produces and markets automotive OEM coatings, refinish coatings and industrial coatings.
“This transaction underlines BASF’s clear commitment to Japan as an important coatings market,” said Klaus-Peter Lobbe, member BASF’s board of executive directors and responsible for the coatings business. “The integration into BASF’s global organization will enable us to enhance the value of our services and products to customers in Japan.”
BASF also announced its plan to develop BASF Coatings Japan as the new regional hub for its coatings business in Asia-Pacific. “Japanese car manufacturers are key players in the global automotive industry,” explained Jean-Pierre Monteny, president of BASF’s coatings division. “BASF Coatings Japan will enable us to expand our partnerships with Japanese car makers in Japan, the Asia-Pacific region and worldwide.”
BASF also bolstered its position in the Australian coatings market, signing an agreement with Akzo Nobel for it to acquire BASF Akzo Nobel, a joint venture between the two companies to market coatings for the automotive industry in Australia.
Also, the company has consolidated its two coatings entities in Australia—the businesses for OEM coatings and refinish coatings—under one company name, BASF Coatings Australia. In addition to more efficient operations, BASF Coatings Australia will offer a broader product portfolio and reinforce its local market presence due to its standing as a global player, according to the company.
Seeking to strengthen its industrial coatings business, BASF acquired the coil coatings business from Rhenania Coatings GmbH and further extends its position in the European coil coatings market. The technologies BASF acquired from Rhenania Coatings are particularly applied to aluminium used by the construction industry, for example, in structures that provide sun protection.
Success Story: The U.S. EPA awarded its Presidential Green Chemistry Challenge Award to BASF’s automotive refinish coatings business for the company’s eco-efficient UV-curable primer.
An eco-efficiency analysis showed that the new primer from BASF cures ten times faster than convetnional thermally cured products. Since UV-curing is light-activated and does not rely on heat, it eliminates the need for bake ovens. As a result the energy consumption in a body shop is reduced by approximately 80%.
“Finding a balance between the economic, environmental and social needs of today’s society without impairing the development opportunities of future generations is one of our essential objectives,” said Rainer Blaie, group vice president for BASF’s coatings businesses in North America and the global automotive coatings solutions business. “The development of this UV-curing primer shows that we not only talk about sustainability, but also act accordingly.”
Sales: $2.713 billion
HQ: Minneapolis, MN USA
Web Site: www.valspar.com
Key Personnel: William L. Mansfield, president and CEO; Steven L. Erdahl, executive VP-coatings; Paul C. Reyelts, executive VP and CFO; Rolf Engh, executive VP, general counsel and secretary; Gary E. Hendrickson, senior VP- architectural, global wood coatings and federal; Donald A. Nolan, senior VP, global packaging and automotive; Kate Bass, vice president-information technology and furniture solutions; Steve Person, vice president, sales and marketing, architectural group.
Major Products: Decorative, protective and industrial paint and coatings, packaging coatings and automotive and fleet refinish products.
New Products: Quikrete professional concrete coatings.
Recent Acquisitions: Corus Packaging Plus, Samuel Cabot Inc.
Valspar’s sales fo