Q&A with Axalta Coating Systems

March 1, 2013

Coatings World had the opportunity to interview the leaders of Axalta Coating Systems, formerly DuPont Performance Coatings.

The Carlyle Group has recently completed its acquisition of DuPont Performance Coatings for $4.9 billion and announced that the company is being renamed Axalta Coating Systems. Axalta Coating Systems is a global supplier of coatings to the transportation and industrial sectors. Coatings World recently had the opportunity to speak with Charlie Shaver, chair and CEO, and John McCool, president of the new company. The two leaders spoke about the impact of the acquisition and the company’s long-term strategy.

Coatings World: Please provide some background on Axalta Coating Systems. When was the company founded? What types of coatings does the company manufacture?
John McCool: Axalta Coating Systems will continue a more than 90 year tradition in the coatings industry. Today, we’re a leading global manufacturer, marketer and distributor of innovative, high performance coatings. We serve the transportation industry as well as other industrial customers such as manufacturers of electrical insulation systems and machined metal.

The coatings business at DuPont began in the early 1920s with brands such as Centari and technological innovations such as the invention of the first mixing machine system. In the early 1970s, we exited the architectural coatings business to focus solely on the industrial and transportation sectors. In a way, our new independence completes that evolution. Our growth accelerated in the 1990s. We introduced Cromax, a basecoat for vehicles that remains a key brand in our portfolio, and we acquired terrific brands like Spies Hecker, Standox and Nason. In the first decade of the new millennium we introduced Cromax Pro, our third generation waterborne technology, a great product that meets both customer and environmental needs. Of course, our latest news is only weeks old. As our new name suggests we are now independent and, quite significantly, can be completely focused on coatings.

For just a rundown of our major product lines: We make both high-bake and low-bake coatings for OEMs. For refinish shops, we have a number of long-standing brands: ChromaBase, ChromaPremier, CromaxPro, Standox and Spies Hecker. We also offer regional brands such as Nason, Duxone, Cromacryl and Max. We serve the liquid industrial business – manufacturers in the rail, heavy duty truck and electrical insulation systems sectors – with our Imron brand and Voltatex electrical insulation systems. Our leading powder brands are ALESTA, NAP-GUARD and ABCITE.

CW: How will the acquisition of DuPont Performance Coatings affect the company?
Charlie Shaver: Fundamentally, what our independence means is that everyone at the company will be able to focus on our passion – coatings – on a full time basis. Our independence will release our full potential and that’s going to convert into ever better products and services for our customers. Behind the scene, our acquisition by The Carlyle Group establishes a great partnership. Carlyle understands our business and our customers. Plus, Carlyle is truly global – just as we are. With offices on six continents, they can provide insights into global trends and opportunities. We can benefit from their insights when we want but are free to run our business as we see fit.

CW: What assets and products were included in the acquisition?
McCool: Quite literally, everything that was part of DuPont Performance Coatings comes with us to Axalta Coating Systems: products, people and plants. We will continue to provide without interruption every single brand, technology tool and service we offered before our sale. Even more importantly, though, every one of the more than 11,000 people that make our organization what is today is coming with us. They’re the heart of the business and the face of our business to our customers. Behind our people we’ll have our 35 manufacturing plants, 42 training centers and seven innovation centers that will continue to operate without a hitch.

CW: What specific market segments will benefit from this acquisition?
Shaver: The benefits of becoming an independent business will be felt by all our customers. As a company that’s now able to focus completely on coatings, we’ll have our ear even better tuned to customer needs and our research focused without distraction (that comes from being part of a larger corporation) on coatings solutions. We’re committed to bring the benefits of independence to all the segments we serve. We’ll maintain our leading global market positions in the refinish and heavy duty truck markets and continue to grow our business in the OEM, powder and other industrial liquid markets.

CW: What is Axalta’s long-term strategy in terms of entering new markets and launching new products and technologies?
McCool: We’re constantly evaluating new market opportunities. Obviously, economic growth in China and Brazil make both markets attractive to us, and we’re well positioned with people, products and plants to seize opportunities. We have a major production facility in Guarulhos, outside of Sao Paulo. In 2008 we opened a new plant in Jiading, outside Shanghai, and our Asia Pacific headquarters are in Shanghai. Just as importantly, we’re continuing to expand our business in the more developed markets with new technologies, such as our new advanced third generation waterborne technology for the refinish market, which provides our customers with a step change in productivity as well as complying with more stringent environmental regulations. In addition, we have a strong pipeline of new products that we believe will continue to benefit our customers and our business for years to come.

CW: What are the company’s more recent plans?
Shaver: Our new name is worth a mention. Today we have a new name and the rest of our corporate visual identity – a logo and other graphics – will be rolled out in the second quarter of 2013. But the name alone speaks volumes. We want everyone to know we are exclusively a coatings company and are in business to serve the interests of customers who depend on superior coatings to run their businesses. We also want a name that says our coating products are part of a complete system for our customers. We provide tools to match color, tools to better apply our coatings, and training to help customer learn how to use our products and services. I eagerly invite everyone to stay tuned for the launch of our full new identity in the spring!

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