Latin America Reports

AkzoNobel to expand via strong sales in Brazil

By Charles W. Thurston | September 15, 2010

On the heels of increased capacity expansion plans and marketing initiatives, AkzoNobel is poised to gain market share in Brazil.

AkzoNobel Brasil is expected to earn $1 billion on a double-digit sales increase this year as the result of strong sales in architectural, automotive, industrial and maritime paint and coatings. Plans are to plow the income into capacity expansion and marketing, company officials said. Brazilian sales are estimated to represent about five percent of AkzoNobel global sales.
The company hopes to increase its production capacity by one-third, including new investment in technology, according to Fernando Macedo, AkzoNobel's director of maritime paints and coatings in Brazil. While no specific segment destination was cited, the company is reported to be planning to invest $56 million this year, evenly split between new capacity and marketing. AkzoNobel spent about $100 million in Brazil over a three-year period ending in 2008.
One key destination of the new investment is expected to be in architectural capacity, especially to support the Coral premium brand paint. Premium paint sales represent 30 percent of all architectural paint sales for AkzoNobel, which has an estimated 25 percent share of the premium paints market, according to a report by Valor Economico. The company hopes to increase its market share by several points this year, in part by increasing points of sales to 23,000 locations, up from 16,000 last year, another report indicated.
In 2008, AkzoNobel acquired the Coral brand from ICI, adding to its portfolio of brands including Dulux, Sikkens, Wanda, Ypiranga, Interpon, International and Glidden.
Jaap Kuiper, president of Akzo Brasil, recently appeared on Brazilian television to launch the company's “Everything in Color for You” campaign for architectural paints. Lately, the company has been donating its Corel brand paint for sprucing up historic buildings and for hillside slums in Brazil, called “favelas.”
The company is also localizing its campaign with city-specific projects, like the “Everything in Color for Sao Paulo” drive to help augment paint use in the capital of Sao Paulo state.
AkzoNobel produces automobile, architectural and industrial paints and coatings at its Itupeva, Sao Paulo state facility. Maritime paints are produced at Sao Goncalo, in Rio de Janeiro state. New sub-lines of the Coral architectural and Sparlack wood finishes brands have recently been released, including zero-VOC products. Among architectural color launches this year, “Céu Californiano,” or California Sky, is a major campaign.
AkzoNobel Brasil adheres to the Global Reporting Initiative to report its corporate citizenship and sustainability practices, which is strongly followed in Brazil. The company describes its waste, energy, community, air quality, services and transportation practices on a segment-specific level. Among goals of the company are to increase zero- and low-VOC products to a level of 30 percent of all sales by 2015, compared to 22 percent in 2009.
AkzoNobel also produces and/or sells paint regionally in the Southern Cone of South America in Argentina, Bolivia, Chile and Uruguay.