Kerry Pianoforte, Editor03.11.24
The participants are Gregoire Poux-Guillaume, CEO, AkzoNobel; Uta Holzenkamp, President, BASF’s Coatings Division; Dan Calkins, CEO, Benjamin Moore; Abhijit Roy, CEO, Berger Paints; João Serrenho, CEO, CIN; Michael Hansen, CEO, Hempel: Steve Crossman, COO, HMG Paints; Tim Knavish, CEO, PPG Industries and Armodios Yannidis, CEO, Vitex.
For AkzoNobel, 2023 was a year that delivered a clear rebound in performance. Our volumes stabilized, helping us to outperform many of our markets, while our profits rebounded on resilient pricing and the first effects of raw material deflation. Our efforts to transform the company also gathered pace. We were able to absorb persistent global inflation and unfavorable currency effects to beat the targets we set ourselves at the beginning of the year.
Looking at the year in a bit more detail, most of our end markets seemed to bottom out in the second half of 2023, with some areas actually showing robust growth trends. This was certainly true for our Powder Coatings business, which recovered well from a construction-driven downturn in the second half-year. Results for Decorative Paints in EMEA reflected a stabilization in volumes and continuing pricing power, while Deco in China grew volumes in a more challenging pricing environment. Our Coatings businesses in China performed well throughout.
With regard to our Industrial Coatings activities, metal coatings markets (coil, packaging) stabilized globally after a tough start to the year, which left wood coatings as the main segment under continuing volume pressure. Stalwarts such as Aerospace Coatings, Marine and Protective Coatings and Vehicle Refinishes – businesses that benefit from strong macro trends – continued to perform well.
BASF:
In 2023, the automotive market slightly recovered, particularly due to the improved availability of semiconductor chips. As a manufacturer of both automotive OEM coatings and refinish coatings, we were able to supply our customers with higher volumes to meet the resulting increase in demand.
Benjamin Moore:
Overall, in 2023, there were several economic factors impacting the home improvement and architectural coatings categories, and ultimately our industry at large. As we saw mortgage rates increase, homeowners were less inclined to move, which softened home sales significantly in comparison to recent years. Related to shifts in the economy, consumers prioritized other necessities over home improvement which led to a decrease in home remodeling opportunities. Weather also contributes to the longevity of the painting season and was shortened in some regions this past year.
However, the professional segment was able to sustain business by working through backlogs, which contributed to paint and coatings sales.
Berger:
2023 has been a reasonably good year for Berger in a paints market that had moderate growth. We had a double-digit volume growth YTD December and a very strong operating profit growth on the back of raw material price reduction. We have achieved most of the goals that we had set for ourselves at the beginning of the year. Our distribution expansion for one, has happened at a faster clip than before. Many of our key categories like construction chemicals, emulsions and automotive paints have shown significant improvement this year. In the first three quarters, we have been very competitive with our peers in the market with very healthy profit growth in the third quarter. And having turned 100 years in India in the last month of the year, we are now approaching 2024 with a great sense of expectation and optimism.
CIN:
In 2023, the market showed positive growth in terms of value, although at a modest pace. This growth was mainly sustained through strategic pricing adjustments. Despite a decline in volume across our primary markets, this trend was notably reversed in the final months of the year. However, there was an exception to this trend in the protective coatings segment, which showed significant dynamism.
The growth in this segment was attributed to a harmonious blend of both price and volume dynamics.
Furthermore, the year witnessed a widespread reduction in raw material prices following two consecutive years of increases. This reduction not only bolstered overall profitability but also presented a positive shift. However, this shift was somewhat tempered by the pressures experienced in terms of staff costs.
Hempel:
2023 was another year where we saw high inflation, low consumer confidence and supply chain disruption impacting the paint and coatings industries Hempel works in to differing extents. But in spite of the challenges, Hempel continued to navigate its growth path, guided by its Double Impact strategy. Our focus has been on delivering cutting-edge technologies and compelling brands, all geared towards fulfilling our customers’ demand for increasingly sustainable solutions.
HMG:
2023 was a tale of two halves with confidence across the UK growing in Q3 and Q4 following a very cautious start to the calendar year. Inflationary pressure in the UK had an impact on many of our customers in the early to middle part of 2023, especially on energy prices, which led to altered buying patterns and behaviors. However, across the board there was positive growth across many of the sectors we operate in as the impact of inflation and other events settled down.
PPG:
The market for paints and coatings experienced pockets of growth in 2023, while some segments remained challenged. In the fourth quarter, PPG delivered solid volume growth in China, stabilized demand in Europe, and continued expansion in key end-use markets such as aerospace, automotive OEM, and protective and marine coatings. Despite challenges in global industrial production and architectural coatings demand, PPG’s strategic initiatives and strong market positioning enabled us to achieve exceptional results, setting a strong foundation for growth.
Vitex:
The market in 2023 has been challenged by the adversities the Climatic Crisis will be causing also in the future. A mild winter kept construction projects active, however with demanding circumstances regarding humidity and temperature fluctuations. Projects stopped in the spring as it was abnormally cold and then followed a period with heavy rainfall, therefore external paint jobs were postponed. In the summer we experienced extreme heat waves that led to the government prohibiting works outside for a period. In parallel we experienced megafires in forests and floods that disrupted demand and the supply chain. Despite the adversities, sales have grown beyond the targets initially set for the year.
We expect to continue seeing positive volumes, driven by improving end market conditions and share gains across many of our activities. Our Coatings businesses, for example, have room to rebound, with volumes remaining below 2019 levels. This is also the case for Deco EMEA, where we expect a progressive rebound over the next few years. The slow market recovery in Deco China is expected to sequentially continue during 2024.
BASF:
Compared to the previous year, which was primarily characterized by high raw material prices and supply chain disruptions, the delivery situation for different value chains has improved a lot. The automotive market has also recovered, which is largely attributed to the backlog of orders and replenished inventories following the resolution of last year’s OEM supply chain disruptions. The assumptions on the automotive market outlook for the coming years have significantly changed compared with our view in 2019. Growth is expected to be moderate globally and stagnating in Europe.
Our focus remains on delivering and developing winning factors that will contribute to our customers’ success now and in the future.
Benjamin Moore:
The pandemic had significant impacts on our business and while we continue to navigate the post-pandemic environment, we have seen some critical factors such as supply chain disruptions and demand level out. Through changes we made both operationally and in the business in recent years, we’ve built a new resilience and have been able to implement stronger continuity plans that enable us to weather future challenges ahead.
Berger:
As indicated in last year’s edition, most, if not all, segments of the Indian paint market have seen a complete revival. This year did witness some supply chain disruption, but we were largely covered due to some great planning work by the concerned teams. The decorative paint market started off well but softened mid-year due to extended rains in some parts of the country and a delayed and extended winter that tempered demand. There was a late revival of demand in the last quarter of 2023. The market growth for industrial and protective coatings have also shown a similar trajectory.
CIN:
CIN’s supply chain proved to be highly resilient in 2023, despite the global challenges that emerged towards the end of the year, including the Red Sea attacks. We worked diligently to mitigate risks and ensure that our operations continued to run smoothly. Thanks to our close collaboration with suppliers and logistics partners, we were able to maintain high levels of efficiency and quality throughout the year. We are committed to continuously improving our supply chain processes and capabilities to ensure that we can continue to deliver value to our customers, no matter what challenges lie ahead.
Hempel:
The various disruptions we have seen over the last few years continued in 2023 and they have taught us how critical robust risk management and business resilience strategies are to future-proofing our supply chain. Supply chain disruption, such as the one we’ve seen in the Red Sea area since end of 2023, has been exacerbated by geopolitical turbulence, alongside anomalous weather conditions affecting shipping lanes.
And so, in another year impacted by external challenges, our systems are serving us well. The Hempel team works continuously to ensure a reliable supply of products and we use a dynamic enterprise risk management setup to assess all risks, including the secure supply of critical raw materials
HMG:
As mentioned in our 2022 review, have seen a number of the markets we operate in return to pre-pandemic levels, such as the decorative coatings markets, which saw huge spikes during the pandemic return to a more normal level of demand. We have also seen a slight reduction in supply chain disruption but that is very fluid and influenced heavily by the current ongoing geopolitical situations across, the globe. We’re lucky to have a purchasing team who work collaboratively with our suppliers so we’ve managed to mitigate any major supply chain disruptions for ourselves and limit the impact to our customers.
PPG:
While challenges still exist, we have seen recovery in many areas, and most notably in aerospace. Economic growth in Mexico, targeted price increases, and improvements in raw material cost and availability have also contributed to improvement in business conditions. We see demand improving in China, particularly with electric vehicle growth, and we are witnessing an increase in infrastructure spending in several key markets.
We are still seeing barriers to growth due to the impacts of slow existing home sales in the U.S., soft global industrial production, skilled labor availability, as well as higher wages, interest rates, and global tax rates. We are keeping our eye on the current geopolitical environment, the U.S. labor market, consumer spending, and Red Sea logistics as potential challenges in the
year ahead.
PPG, however, experienced significant progress in returning to its historic segment margin profile in 2023. The company delivered its fifth consecutive quarter of year-over-year margin improvement in the fourth quarter. Strong earnings growth and effective working capital management led to record operating cash flow, exceeding $2.4 billion for the year. PPG’s robust financial performance and strengthened balance sheet position us well for navigating potential challenges and creating value for our customers and shareholders in this dynamic market environment.
Vitex:
In terms of sales and demand, the pandemic has not had a negative effect on us and did not hinder our growth trajectory. Moreover, the supply chain has had less disruptions from the pandemic aftermath in 2023. The disruptions we are experiencing now come from geopolitical issues as well as from climatic incidents. Climatic Resilience became a top priority for us, and we came up with three pillars of immediate action: first shifting our stocks strategy from “Just in Time” to “Just in Case” to sustain supply chain disruptions, second developing our mind-set and sales narrative to consider meteorological parameters when consulting customers, and third, develop products that can be used under extreme climatic conditions.
We’ve established a roadmap for growth in the mid-term.
Our portfolio shows clear opportunities for organic growth, driven by a combination of structural market growth, cyclical tailwinds and sustainability-driven innovation and differentiation. Based on this, we believe we can deliver low single digit volume growth over the mid-term.
Our high volume Industrial Coatings and Deco EMEA businesses are expected to deliver flattish volumes, beyond a probable bounce back initially off a low base. We anticipate steady moderate growth in our high value, low volume Automotive and Specialty Coatings business, primarily driven by our Vehicle Refinish activities. We’re also excited about the growth trajectory of Aerospace Coatings in the coming years.
The bulk of our organic growth will be driven by our strong emerging market presence in Deco in Asiamand LATAM, as well as our solid offering in Powder Coatings and Marine and Protective Coatings, where we expect mid-single digit growth.
BASF:
The trend towards electric vehicles has significantly accelerated with different speed in the regions. The automotive industry is currently growing primarily in the largest region, Asia-Pacific, and new Chinese manufacturers such as BYD are using their historical chance to conquer markets inside and outside their country. Accordingly, BASF has expanded its market position there in recent years through strategic investments. Europe, like North America, remains an important market for us. In the refinish coatings industry, we are currently seeing a consolidation of workshops in many regions, which we are supporting as a reliable global premium coatings partner.
Benjamin Moore:
As we go forward, we are optimistic about the return to growth for the residential repaint segment, as well as new store openings and the optimization of our product portfolio to meet the needs of our customer.
Berger:
Berger has significant presence across protective coatings, automotive, general industries, and decorative paints segments with leadership status in some and a strong number 2 position in others. And being in a vibrant economy, we have been able to identify growth opportunities across most segments where we are present. In decorative architectural products, we have some very innovative interior emulsion products to offer. Within water proofing and construction chemicals, that is a fast-growing business for us, and there are a slew of solutions that we have launched with a few more in the pipeline. The government’s plan to invest heavily in the infrastructure sector, as laid out in the latest fiscal budget, presents us with significant opportunities in the projects business where we already have a sizeable presence. The automotive and the general industrial sectors of the economy has been performing really well and we have had many breakthroughs both in terms of innovative products and new clients.
CIN:
CIN operates in multiple market areas and has the potential for growth in each of them. We are committed to expanding our portfolio of products and services in all of our business units and have established strategies to achieve this goal.
Based on our analysis, we have identified that CIN Performance Coatings, particularly the Protective and Industrial units, have the highest potential for growth in the coming years. We have identified the needs of our customers and have developed innovative solutions to meet these needs so we are confident that our focus on these areas will result in significant growth for our company.
We will continue to invest in research and development to ensure that we provide the best solutions for our customers and maintain our position as a leader in the industry.
Hempel:
Guided by our Double Impact strategy, our focus at Hempel will continue to build segment leadership positions in selected geographies within Marine, Decorative, Infrastructure and Energy. Our technology and expertise in these areas brings real value to our customers and our focus will ensure we have a robust product development pipeline, with sustainability as a key driver in our innovation, to continuously reinforce our position.
HMG:
Rather than one or two particular market opportunities, we’ve seen growth opportunities surrounding water-based technologies in nearly all of the markets in which we operate. As the consumer becomes more sustainability focused with the upcoming government targets on environmental impacts, water-based technology is a key area for the future of the business. Our research and development team have already started numerous projects in collaboration with both raw material suppliers and customers on the next generation of coatings which will be able to hit environmental/green targets without compromising performance.
PPG:
In 2024, PPG will continue to focus on strategic growth initiatives to drive volume growth and capitalize on demand across various sectors. We expect to see growth in aerospace products, protective coatings, automotive refinish and automotive OEM coatings, and continued growth in Mexico.
In aerospace, we posted significant organic growth year-over-year in 2023. Aircraft manufacturers continue efforts to ramp up production of new aircraft and we’ve seen travel return to pre-pandemic levels, so we expect demand to only continue to grow in the years ahead.
We see continued growth opportunities for our protective and marine coatings business. Our business relationships in China as well as the country’s investments in liquid natural gas, which uses many of our advantaged protective products, position us well for continued expansion in the market. There’s also significant infrastructure investment in the U.S. and other countries that offer growth opportunities for the protective business. With technology-advantaged products and a focus on sustainability, we’re exploring opportunities for cross-selling and expansion, particularly in Mexico where we’re leveraging our existing networks to grow our protective coatings business in the same way we’ve used our retail networks to grow the protective business in the U.S. and in other countries.
Finally, in automotive OEM, we saw strong year-over-year margin improvement due to moderating input costs and automotive OEM growth. We expect markets like China to continue to contribute to our growth in this area.
Vitex:
In 2023 we have managed to grow our market share in the architectural paints segment in all the markets we operate. Higher premium products as well as innovative ones are very well accepted by our customers, a fact that rewards our long-term investment in people and processes as well as our curious mindset. Growth comes primarily from larger projects and the tourism industry in Greece and Cyprus while the consumers demand appears weak. In contrary we see stronger consumers sentiment and DIY demand in Bulgaria and Serbia.
We have good momentum heading into 2024 and expect to resume growing volumes while delivering further margin – and profit – expansion. Our roadmap for both growth and profitability gives us confidence that we can make a significant step change in the performance of the company. We see opportunities for sustainability-driven innovation and increased scale in select markets, which will drive low single digit volume growth in the mid-term.
We’re also aware that there’s significant value to be gained through improving our operations. We have bottlenecks in business-critical supply chains, under-investment in key sites and low capacity utilization. To help address this challenge, we’ve launched an industrial excellence program and expect to see the full benefits by 2027. It’s focused on reducing complexity, enhancing productivity and optimizing our network through the investment and modernization of our anchor sites. It aims to deliver cost reduction, enhanced efficiency, improved service levels and heightened overall competitiveness.
BASF:
Our customers are at the center of everything we do, and we will continue to support our customers in these transformational time of huge innovation need while staying competitive. This includes innovative products and services that meet the increasing demand for sustainability and environmental friendliness, especially in the automotive industry. We will use our global presence and our strong market position to drive growth. To enter new markets and expand our range of surface solutions, we will also actively explore opportunities beyond traditional paints and coatings, such as digital business models.
Benjamin Moore:
Our strategy is rooted in core strategic pillars that grow the business from the inside out, which starts with growing and engaging our people internally to foster a collaborative environment.
By staying close to our customers, we can better anticipate their needs and provide solutions and support to help them succeed, while building on the strong loyalty that directly contributes to our growth as a business. Further, we remain committed to ensuring the health and stability of the independent channel who extend an expertise and premium service experience to customers that can’t be found in other retail outlets.
Innovating and delivering a best-in-class premium product mix positions us well for growth across segments including the residential repaint and commercial segments, architectural and design community, and even for DIY.
Our focus on sustaining and growing the independent channel through we which we exclusively distribute our products yields growth opportunities through new store openings, and expansion into new regions both domestically and internationally.
Berger:
The Indian paint market has in recent times seen the entry of many new players with more in the pipeline. We believe there will be some tough competition in the days ahead and are preparing to address them.
Our overall business strategy is to remain focused on profitable growth. This will require us to keep expanding the distribution, creating and growing innovative, profitable brands, managing costs to protect margins and to retain talent.
CIN:
CIN is deeply committed to solidifying its position as a market leader in the Iberia and Africa markets, as well as expanding into new markets where we have production plants. As part of this commitment, we are currently investing heavily in enhancing our production plant and logistics capabilities. These initiatives are designed to improve our manufacturing processes, making them more streamlined and efficient. By doing so, we aim to accelerate our delivery times and reduce costs, allowing CIN to maintain our competitive advantage in the industry. Our efforts include implementing cutting-edge technologies and modernizing our equipment to improve production capabilities. We are also exploring new automatized logistics solutions to optimize our supply chain and improve delivery times. These enhancements will enable us to better serve our customers and meet their evolving needs. Overall, our goal is to continue to deliver high-quality products while expanding our reach into new markets. We are excited about the potential of these initiatives and look forward to sharing our progress with our valued customers and partners.
Hempel:
Building on the momentum of last year, we are in a robust position to accelerate growth in the years to come. The success and efficacy of our Double Impact strategy will see us continue our growth trajectory and we are confident that we are firmly on the path to establishing ourselves as an industry-winning enterprise. We will continue to invest in innovation, digitalization and our people, as these are the three key enablers of our strategy.
HMG:
This reply is very similar to the ones John Falder and Brian Falder would have provided throughout our history, in that it is continuing to develop long-term sustainable partnerships. The team at HMG has never been stronger in terms of personnel and we have some extremely exciting potentials in terms of customers and new products.
The nature of HMG’s business is that our diverse portfolio of products allows us to quickly adapt to market trends and even emerging markets and work closely alongside our customers to grow sustainably. There are no aggressive strategies for growth but a steady and sustainable growth pattern that allows us to focus on quality and consistency.
PPG:
PPG’s business strategy for growth in 2024 and beyond revolves around delivering consistent organic growth above global industrial production by leveraging technology-advantaged products, enhancing productivity, and driving sustainability throughout the supply chain. The company remains committed to modernizing and simplifying operations to sustain long-term value creation while balancing cash return to shareholders with investments for growth. By focusing on organic volume growth, continued margin recovery, operational efficiency, and strategic acquisitions, PPG plans to strengthen our market position and drive sustainable growth.
Vitex:
Our medium-term growth strategy in Greece is primarily through the ETICS systems. We have made significant investments to create capacity that will help our country’s ambitious targets for energy efficiency in buildings. . In parallel, we continue to invest in growing our architectural paints footprint, also in the Balkan states.
We’re committed to capturing the opportunities that sustainability presents as a catalyst for innovation. We recognize that sustainability is driving changes in our industry and believe this aligns with our strengths in innovation and our leadership position in sustainability.
We continue to develop sustainable products that differentiate us from competitors, allowing us to gain market share and command higher margins. We’ll also focus on accelerating our development efforts and reducing time to market.
BASF:
Both automotive OEM customers and repair workshops are placing increasing emphasis on the sustainability of coatings. We have focused specifically on this area for many years and offer innovative products and processes to support our customers in achieving their individual sustainability goals. Our aim is to make the best possible use of existing resources and reduce CO2 emissions. For this reason, we have introduced products in both the automotive OEM and automotive refinish sectors that are certified according to the biomass balance method and are based on the use of renewable raw materials at the start of the production process. Reducing the energy consumption, introducing low VOC products, and increasing material efficiency are not only more efficient solutions, but also more sustainable.
In addition to sustainability, we are also investing in research and development to enhance the functionality of coatings, such as improving transparency for radar waves and reflection for LiDAR sensors, which are crucial for driver assistance systems and autonomous driving.
Benjamin Moore:
Our R&D team sits at the forefront of technology and innovation, consistently working to develop best-in-class formulations and contributing to many firsts in the industry.
We are currently rounding out an ongoing effort from the last few years focused on optimizing our product portfolio – inclusive of updating existing formulations, eliminating redundancies and reintroducing the Benjamin Moore brand portfolio within the market. This advancement is intended to streamline the solutions we offer our customers and simplify consideration and purchase.
New product introductions are informed by any gaps that we identify through this process, coupled with areas of opportunity we uncover with our customers, that can be solved through our innovation of new technologies and paint solutions.
Berger:
As an industry innovation leader, R&D is a mission critical function for Berger Paints.
Product Innovation: We are working on new formulations to enhance application properties, and environmental sustainability around low-VOC (volatile organic compound) coatings, anti-microbial coatings, and advanced color systems.
Raw Material Optimization: Researching alternative raw materials and ingredients to enhance product quality and reduce costs, while also directing attention to sustainable
sourcing practices.
Environmental Sustainability: We are also focusing on sustainability initiatives that will minimize the environmental impact of coatings throughout their lifecycle, from raw material sourcing to disposal. This encompasses developing biodegradable coatings, recycling programs, and energy-efficient manufacturing processes.
Market-Specific Solutions: In the area of protective coatings, automotive and industrial sectors, our research involves understanding customer requirements and meeting them through custom-created solutions.
CIN:
We divide our R&D activities according to our four main business units: Architectural, Industrial, Protective and Yachting and Marine Coatings.
In Architectural Coatings, our main efforts are aimed at replacing solvent-based enamels and varnishes for wood and metal with water-based ones. In this area, we are also actively working on the development of a bio-based paint that performs like our best-selling interior paint.
Concerning Industrial Coatings, we continue to develop tailor-made water-based coatings for many OEM customers who have very demanding specifications and whose industrial installations must meet VOC emissions. In this field, we are also involved in studying and exploring some smart paints, namely self-healing ones.
Regarding Protective Coatings, we are developing ultra-high solids coatings for the anticorrosive protection of metallic structures. In this area, we are also investigating water-based coatings and verifying their performance.
As far as Yachting and Marine Coatings are concerned, we are dedicating most of our time to adjusting some products from our portfolio, which have a great performance in European markets, in order to make them more suitable to cover other markets. In this field, we are also working on new antifouling products to meet the demanding requirements of BPR.
In order to ensure that our coatings meet the highest standards of environmental sustainability and occupational health and safety, we are constantly engaged in extensive research and development efforts. Our team works tirelessly to identify and replace raw materials that are not in line with emerging and future legislation and regulations so that our coatings remain at the forefront of compliance and innovation. We take pride in our commitment to creating products that are not only effective and reliable, but also eco-efficient and safe for use in any setting.
Hempel:
Innovation comes to life in all aspects of what we do – in how we develop new products and services, our business models and our new strategic initiatives. In 2023, we maintained sharp focus on innovations to develop more sustainable solutions that meet our customers’ needs, enabling them to lower their CO2 footprint while protecting and beautifying their assets.
The urgency of climate action has increased focus on innovation, particularly around optimizing processes, reducing use of raw materials and enabling our customers to reduce their environmental footprint. In the wind power industry, for example, we are working in partnership with key industry players to enhance wind turbine blade durability, reduce maintenance expenses and extend blade lifespan.
HMG:
Our R&D efforts are primarily focused on advancing sustainable technologies, enhancing product performance, and exploring ways we can add value to our customers by optimizing their processes.
We’re hoping the supply chain issues of the last few years are behind us and our R&D team can focus on developing the next generation of products which will become pillars of the HMG portfolio over the next decade and beyond.
PPG:
PPG continues to prioritize research and development efforts aimed at developing technology-advantaged products, enhancing manufacturing processes, and promoting sustainability. With a focus on customer needs and market trends, PPG collaborates with partners and customers to innovate and address emerging challenges. Sustainability remains a core focus, with ongoing efforts to reduce environmental impact and develop products that support customer sustainability goals. By continuing to invest in R&D and innovation, PPG aims to maintain its competitive edge and drive long-term growth and value creation.
Vitex:
Our R&D efforts are focused on serving consumer needs for healthier and safer indoor living environments as well as offering sustainable solutions for the Green Building sector which will grow further in our region. Last year we published Heath Product Declarations for several of VITEX’s products highlighting our material health excellence.
All our state-of-the-art outdoor protective coatings and ETICS provide excellent performance, low environmental footprint and verified unique sustainability characteristics. Beside these a new concept and driver “Meteo Works” is coming to introduce a new era towards more “climate resilient products.”
See answer to question 3
BASF:
The basis for long-term success is a strong team living a culture based on trust, courage, and empowerment. Times of transformation require all to embrace change with curiosity and implement bold ideas for the future always having the value for the customers in mind. Our long-term plans also involve expanding our range of surface solutions. In addition to our focus on automotive paint that enables our customers to stay competitive and successful, we also concentrate on solutions beyond paint and explore digital business models to enter new markets. To support this, our Digital Incubation Unit serves as a platform to nurture and develop innovative digital business ideas in the Automotive and Surface Solutions sector. There are many possibilities in the upcoming AI capabilities that we can not even dream of today. Sustainability will remain a key priority for us. We will work closely with our partners to implement strategies that align with our Net Zero targets and contribute to a more sustainable future.
Benjamin Moore:
For more than 140 years, Benjamin Moore has had one focus – to manufacture premium paint and beautiful colors that help to transform the spaces in which we live and work. We will continue to build on our industry-leading expertise and deliver a differentiated consumer portfolio to gain market share and accelerate growth by expanding both domestically and abroad.
Since our founding in 1883, we have remained committed to the independent channel – exclusively distributing our products through locally owned and operated stores. This commitment is steadfast into the future and we will continue doing our part to ensure the health of the channel by collaborating with our network of retailers to sustain and grow successful businesses.
Berger:
We have commenced our 100th year of business in India and are keenly aware of the enormous legacy that we have been entrusted with preserving and building on. Our vision is therefore achieving the status of being one of the most respected companies in the world in the paints and coatings sector. Some of the long-term plans that will guide us on the way to accomplishing that vision are:
Distribution Expansion: This is key to the long-term success of Berger Paints and will always form a critical element in all our plans regardless of what the length of the outlook.
Product Innovation: The low per capita consumption of the Indian paint market indicates the continuing potential for innovations in different price segments and product categories. The BOP category in decorative products as well as new solutions in construction chemicals and protective coatings offer the highest potential.
R&D Investments: To continue investing in research and development to drive product innovation, enhance performance, and differentiate offerings from competitors.
Brand Building and Marketing: Especially considering the increasingly crowded marketplace, strengthening the brand image and enhancing marketing efforts to increase brand awareness, customer loyalty, and brand equity is extremely crucial.
Operational Excellence: With the anticipated pressure on margins from increased competition, improving operational efficiency, supply chain management, and manufacturing processes to reduce costs, increase productivity, and maintain quality standards takes on special importance. This would possibly entail investments in automation, technology upgrades, and continuous improvement initiatives.
Sustainability Initiatives: In keeping with our ESG compliance norms, we will be focused on reducing environmental impact, promoting circular economy principles, and addressing social responsibility concerns. Some of these will include the integration of sustainable practices into business operations, responsible sourcing of raw materials, suitable manufacturing processes, and product stewardship.
Talent Development: We have been increasingly investing in employee training, that include talent and leadership development programs. Our open organizational culture aids a culture of innovation, collaboration, and continuous learning and this is something we are very keen to preserve.
Customer-Centricity: Having come this far by prioritizing customer satisfaction and building long-term relationships with them, Berger Paints will continue to look for ways of delivering value-added solutions, exceptional service, and personalized experiences.
Digital Transformation: A few years ago, Berger embarked on a calibrated but expansive digital transformation encompassing all functions and business lines. Depending on the function and area of operations, this exercise covered Logistics and Supply Chain, Inventory Management, Human Resources and Digital Learning, CRM Enhancement, IoT, Robotic Process Automation, Data Analytics, Business Intelligence, Colour Visualization tools, Financial Management, e-Commerce, Digital Marketing and Cybersecurity. We are at the far end of that transformation cycle that has already transformed the organization and made it more nimble, agile and purposeful in its approach.
CIN:
Looking ahead, our topmost priority is to consolidate and enhance our leadership position. We are steadfast in our unwavering commitment to upholding the most superior quality standards across every facet of our operations. Moreover, CIN is fully dedicated to integrating sustainable practices into our business framework, with the ultimate goal of creating a future where excellence and environmental responsibility are in perfect harmony
Hempel:
We are committed to our growth journey – not just because it makes good business sense, but because it will maximize the positive impact that our company, people and owner can have together on the world around us.
We unveiled our Double Impact strategy in 2020 with the ambitious goal of doubling both our revenue and positive influence within a five-year time-frame. Thanks to the success of this strategic framework, we have extended its application beyond the initial 2025 horizon.
In 2023, we added a fourth pillar to our strategy called Scalable Operations. We did so to make sure that we maintain focus on fostering a highly profitable business that is scalable for future growth. Our ultimate goal is to increase value creation for the Hempel Foundation, so it can have an even more positive impact on society through its important philanthropic work.
HMG:
Our ongoing commitment is to invest in our infrastructure (production, logistics, R&D and more) along with that of our people. Our people are the bedrock of our future and investing in them will only enhance the efficiency and performance of HMG. This has been evident amongst our senior leadership team, who have taken on a number of challenges over the last 12 months and have created outcomes that have positively impacted the performance of the business. We enter 2024 with a strong foundation and an unwavering focus on a future that holds great promise and together we will continue to drive our company forward.
PPG:
Our company’s long-term plans prioritize sustained growth, innovation, and value creation for our stakeholders. We’re committed to maintaining our global leadership in paints and coatings by delivering technology-advantaged products that enhance productivity and sustainability for customers. We’ll continue investing in research and development to innovate new customer-focused solutions and streamline operations using digital technologies to drive efficiency and operational excellence worldwide.
From a capital allocation perspective, we’ll return value to shareholders through dividends and prudent share repurchases while pursuing strategic acquisitions to complement our capabilities and support growth. Expanding into emerging growth markets, capitalizing on electric vehicle trends, and strengthening our presence in the aerospace, automotive, and protective coatings sectors are key objectives.
Sustainability remains paramount. We’re dedicated to reducing our environmental footprint, promoting sustainable practices, and developing eco-friendly products. With a focus on long-term sustainability, innovation, and strategic growth, we’re poised to deliver value and success for years to come.
Vitex:
Our long-term plan relates to technology and excellence. We will continue our successful path of balancing exploration into the long term and execution in the present time. We are already in the process and investing in incorporating digitalization practices to optimize our processes and maximize our efficiency. Moreover, we are developing our foresight by trying to create a futures thinking mindset that will help us bring even more innovations to our customers and elevate our profile as a dynamic, efficient and fast moving company. This strategy translates into a bouquet of products and services that are unique to our customers. We will continue to create daily wonders with science,
fun and care.
CW: How did the market for paints and coatings fare overall in 2023?
AkzoNobel:For AkzoNobel, 2023 was a year that delivered a clear rebound in performance. Our volumes stabilized, helping us to outperform many of our markets, while our profits rebounded on resilient pricing and the first effects of raw material deflation. Our efforts to transform the company also gathered pace. We were able to absorb persistent global inflation and unfavorable currency effects to beat the targets we set ourselves at the beginning of the year.
Looking at the year in a bit more detail, most of our end markets seemed to bottom out in the second half of 2023, with some areas actually showing robust growth trends. This was certainly true for our Powder Coatings business, which recovered well from a construction-driven downturn in the second half-year. Results for Decorative Paints in EMEA reflected a stabilization in volumes and continuing pricing power, while Deco in China grew volumes in a more challenging pricing environment. Our Coatings businesses in China performed well throughout.
With regard to our Industrial Coatings activities, metal coatings markets (coil, packaging) stabilized globally after a tough start to the year, which left wood coatings as the main segment under continuing volume pressure. Stalwarts such as Aerospace Coatings, Marine and Protective Coatings and Vehicle Refinishes – businesses that benefit from strong macro trends – continued to perform well.
BASF:
In 2023, the automotive market slightly recovered, particularly due to the improved availability of semiconductor chips. As a manufacturer of both automotive OEM coatings and refinish coatings, we were able to supply our customers with higher volumes to meet the resulting increase in demand.
Benjamin Moore:
Overall, in 2023, there were several economic factors impacting the home improvement and architectural coatings categories, and ultimately our industry at large. As we saw mortgage rates increase, homeowners were less inclined to move, which softened home sales significantly in comparison to recent years. Related to shifts in the economy, consumers prioritized other necessities over home improvement which led to a decrease in home remodeling opportunities. Weather also contributes to the longevity of the painting season and was shortened in some regions this past year.
However, the professional segment was able to sustain business by working through backlogs, which contributed to paint and coatings sales.
Berger:
2023 has been a reasonably good year for Berger in a paints market that had moderate growth. We had a double-digit volume growth YTD December and a very strong operating profit growth on the back of raw material price reduction. We have achieved most of the goals that we had set for ourselves at the beginning of the year. Our distribution expansion for one, has happened at a faster clip than before. Many of our key categories like construction chemicals, emulsions and automotive paints have shown significant improvement this year. In the first three quarters, we have been very competitive with our peers in the market with very healthy profit growth in the third quarter. And having turned 100 years in India in the last month of the year, we are now approaching 2024 with a great sense of expectation and optimism.
CIN:
In 2023, the market showed positive growth in terms of value, although at a modest pace. This growth was mainly sustained through strategic pricing adjustments. Despite a decline in volume across our primary markets, this trend was notably reversed in the final months of the year. However, there was an exception to this trend in the protective coatings segment, which showed significant dynamism.
The growth in this segment was attributed to a harmonious blend of both price and volume dynamics.
Furthermore, the year witnessed a widespread reduction in raw material prices following two consecutive years of increases. This reduction not only bolstered overall profitability but also presented a positive shift. However, this shift was somewhat tempered by the pressures experienced in terms of staff costs.
Hempel:
2023 was another year where we saw high inflation, low consumer confidence and supply chain disruption impacting the paint and coatings industries Hempel works in to differing extents. But in spite of the challenges, Hempel continued to navigate its growth path, guided by its Double Impact strategy. Our focus has been on delivering cutting-edge technologies and compelling brands, all geared towards fulfilling our customers’ demand for increasingly sustainable solutions.
HMG:
2023 was a tale of two halves with confidence across the UK growing in Q3 and Q4 following a very cautious start to the calendar year. Inflationary pressure in the UK had an impact on many of our customers in the early to middle part of 2023, especially on energy prices, which led to altered buying patterns and behaviors. However, across the board there was positive growth across many of the sectors we operate in as the impact of inflation and other events settled down.
PPG:
The market for paints and coatings experienced pockets of growth in 2023, while some segments remained challenged. In the fourth quarter, PPG delivered solid volume growth in China, stabilized demand in Europe, and continued expansion in key end-use markets such as aerospace, automotive OEM, and protective and marine coatings. Despite challenges in global industrial production and architectural coatings demand, PPG’s strategic initiatives and strong market positioning enabled us to achieve exceptional results, setting a strong foundation for growth.
Vitex:
The market in 2023 has been challenged by the adversities the Climatic Crisis will be causing also in the future. A mild winter kept construction projects active, however with demanding circumstances regarding humidity and temperature fluctuations. Projects stopped in the spring as it was abnormally cold and then followed a period with heavy rainfall, therefore external paint jobs were postponed. In the summer we experienced extreme heat waves that led to the government prohibiting works outside for a period. In parallel we experienced megafires in forests and floods that disrupted demand and the supply chain. Despite the adversities, sales have grown beyond the targets initially set for the year.
CW: Have you seen a return to pre-pandemic business conditions (increased demand, less supply chain disruptions, etc.)?
AkzoNobel:We expect to continue seeing positive volumes, driven by improving end market conditions and share gains across many of our activities. Our Coatings businesses, for example, have room to rebound, with volumes remaining below 2019 levels. This is also the case for Deco EMEA, where we expect a progressive rebound over the next few years. The slow market recovery in Deco China is expected to sequentially continue during 2024.
BASF:
Compared to the previous year, which was primarily characterized by high raw material prices and supply chain disruptions, the delivery situation for different value chains has improved a lot. The automotive market has also recovered, which is largely attributed to the backlog of orders and replenished inventories following the resolution of last year’s OEM supply chain disruptions. The assumptions on the automotive market outlook for the coming years have significantly changed compared with our view in 2019. Growth is expected to be moderate globally and stagnating in Europe.
Our focus remains on delivering and developing winning factors that will contribute to our customers’ success now and in the future.
Benjamin Moore:
The pandemic had significant impacts on our business and while we continue to navigate the post-pandemic environment, we have seen some critical factors such as supply chain disruptions and demand level out. Through changes we made both operationally and in the business in recent years, we’ve built a new resilience and have been able to implement stronger continuity plans that enable us to weather future challenges ahead.
Berger:
As indicated in last year’s edition, most, if not all, segments of the Indian paint market have seen a complete revival. This year did witness some supply chain disruption, but we were largely covered due to some great planning work by the concerned teams. The decorative paint market started off well but softened mid-year due to extended rains in some parts of the country and a delayed and extended winter that tempered demand. There was a late revival of demand in the last quarter of 2023. The market growth for industrial and protective coatings have also shown a similar trajectory.
CIN:
CIN’s supply chain proved to be highly resilient in 2023, despite the global challenges that emerged towards the end of the year, including the Red Sea attacks. We worked diligently to mitigate risks and ensure that our operations continued to run smoothly. Thanks to our close collaboration with suppliers and logistics partners, we were able to maintain high levels of efficiency and quality throughout the year. We are committed to continuously improving our supply chain processes and capabilities to ensure that we can continue to deliver value to our customers, no matter what challenges lie ahead.
Hempel:
The various disruptions we have seen over the last few years continued in 2023 and they have taught us how critical robust risk management and business resilience strategies are to future-proofing our supply chain. Supply chain disruption, such as the one we’ve seen in the Red Sea area since end of 2023, has been exacerbated by geopolitical turbulence, alongside anomalous weather conditions affecting shipping lanes.
And so, in another year impacted by external challenges, our systems are serving us well. The Hempel team works continuously to ensure a reliable supply of products and we use a dynamic enterprise risk management setup to assess all risks, including the secure supply of critical raw materials
HMG:
As mentioned in our 2022 review, have seen a number of the markets we operate in return to pre-pandemic levels, such as the decorative coatings markets, which saw huge spikes during the pandemic return to a more normal level of demand. We have also seen a slight reduction in supply chain disruption but that is very fluid and influenced heavily by the current ongoing geopolitical situations across, the globe. We’re lucky to have a purchasing team who work collaboratively with our suppliers so we’ve managed to mitigate any major supply chain disruptions for ourselves and limit the impact to our customers.
PPG:
While challenges still exist, we have seen recovery in many areas, and most notably in aerospace. Economic growth in Mexico, targeted price increases, and improvements in raw material cost and availability have also contributed to improvement in business conditions. We see demand improving in China, particularly with electric vehicle growth, and we are witnessing an increase in infrastructure spending in several key markets.
We are still seeing barriers to growth due to the impacts of slow existing home sales in the U.S., soft global industrial production, skilled labor availability, as well as higher wages, interest rates, and global tax rates. We are keeping our eye on the current geopolitical environment, the U.S. labor market, consumer spending, and Red Sea logistics as potential challenges in the
year ahead.
PPG, however, experienced significant progress in returning to its historic segment margin profile in 2023. The company delivered its fifth consecutive quarter of year-over-year margin improvement in the fourth quarter. Strong earnings growth and effective working capital management led to record operating cash flow, exceeding $2.4 billion for the year. PPG’s robust financial performance and strengthened balance sheet position us well for navigating potential challenges and creating value for our customers and shareholders in this dynamic market environment.
Vitex:
In terms of sales and demand, the pandemic has not had a negative effect on us and did not hinder our growth trajectory. Moreover, the supply chain has had less disruptions from the pandemic aftermath in 2023. The disruptions we are experiencing now come from geopolitical issues as well as from climatic incidents. Climatic Resilience became a top priority for us, and we came up with three pillars of immediate action: first shifting our stocks strategy from “Just in Time” to “Just in Case” to sustain supply chain disruptions, second developing our mind-set and sales narrative to consider meteorological parameters when consulting customers, and third, develop products that can be used under extreme climatic conditions.
CW: What areas of the paint and coatings market represent the most growth opportunities for your company?
AkzoNobel:We’ve established a roadmap for growth in the mid-term.
Our portfolio shows clear opportunities for organic growth, driven by a combination of structural market growth, cyclical tailwinds and sustainability-driven innovation and differentiation. Based on this, we believe we can deliver low single digit volume growth over the mid-term.
Our high volume Industrial Coatings and Deco EMEA businesses are expected to deliver flattish volumes, beyond a probable bounce back initially off a low base. We anticipate steady moderate growth in our high value, low volume Automotive and Specialty Coatings business, primarily driven by our Vehicle Refinish activities. We’re also excited about the growth trajectory of Aerospace Coatings in the coming years.
The bulk of our organic growth will be driven by our strong emerging market presence in Deco in Asiamand LATAM, as well as our solid offering in Powder Coatings and Marine and Protective Coatings, where we expect mid-single digit growth.
BASF:
The trend towards electric vehicles has significantly accelerated with different speed in the regions. The automotive industry is currently growing primarily in the largest region, Asia-Pacific, and new Chinese manufacturers such as BYD are using their historical chance to conquer markets inside and outside their country. Accordingly, BASF has expanded its market position there in recent years through strategic investments. Europe, like North America, remains an important market for us. In the refinish coatings industry, we are currently seeing a consolidation of workshops in many regions, which we are supporting as a reliable global premium coatings partner.
Benjamin Moore:
As we go forward, we are optimistic about the return to growth for the residential repaint segment, as well as new store openings and the optimization of our product portfolio to meet the needs of our customer.
Berger:
Berger has significant presence across protective coatings, automotive, general industries, and decorative paints segments with leadership status in some and a strong number 2 position in others. And being in a vibrant economy, we have been able to identify growth opportunities across most segments where we are present. In decorative architectural products, we have some very innovative interior emulsion products to offer. Within water proofing and construction chemicals, that is a fast-growing business for us, and there are a slew of solutions that we have launched with a few more in the pipeline. The government’s plan to invest heavily in the infrastructure sector, as laid out in the latest fiscal budget, presents us with significant opportunities in the projects business where we already have a sizeable presence. The automotive and the general industrial sectors of the economy has been performing really well and we have had many breakthroughs both in terms of innovative products and new clients.
CIN:
CIN operates in multiple market areas and has the potential for growth in each of them. We are committed to expanding our portfolio of products and services in all of our business units and have established strategies to achieve this goal.
Based on our analysis, we have identified that CIN Performance Coatings, particularly the Protective and Industrial units, have the highest potential for growth in the coming years. We have identified the needs of our customers and have developed innovative solutions to meet these needs so we are confident that our focus on these areas will result in significant growth for our company.
We will continue to invest in research and development to ensure that we provide the best solutions for our customers and maintain our position as a leader in the industry.
Hempel:
Guided by our Double Impact strategy, our focus at Hempel will continue to build segment leadership positions in selected geographies within Marine, Decorative, Infrastructure and Energy. Our technology and expertise in these areas brings real value to our customers and our focus will ensure we have a robust product development pipeline, with sustainability as a key driver in our innovation, to continuously reinforce our position.
HMG:
Rather than one or two particular market opportunities, we’ve seen growth opportunities surrounding water-based technologies in nearly all of the markets in which we operate. As the consumer becomes more sustainability focused with the upcoming government targets on environmental impacts, water-based technology is a key area for the future of the business. Our research and development team have already started numerous projects in collaboration with both raw material suppliers and customers on the next generation of coatings which will be able to hit environmental/green targets without compromising performance.
PPG:
In 2024, PPG will continue to focus on strategic growth initiatives to drive volume growth and capitalize on demand across various sectors. We expect to see growth in aerospace products, protective coatings, automotive refinish and automotive OEM coatings, and continued growth in Mexico.
In aerospace, we posted significant organic growth year-over-year in 2023. Aircraft manufacturers continue efforts to ramp up production of new aircraft and we’ve seen travel return to pre-pandemic levels, so we expect demand to only continue to grow in the years ahead.
We see continued growth opportunities for our protective and marine coatings business. Our business relationships in China as well as the country’s investments in liquid natural gas, which uses many of our advantaged protective products, position us well for continued expansion in the market. There’s also significant infrastructure investment in the U.S. and other countries that offer growth opportunities for the protective business. With technology-advantaged products and a focus on sustainability, we’re exploring opportunities for cross-selling and expansion, particularly in Mexico where we’re leveraging our existing networks to grow our protective coatings business in the same way we’ve used our retail networks to grow the protective business in the U.S. and in other countries.
Finally, in automotive OEM, we saw strong year-over-year margin improvement due to moderating input costs and automotive OEM growth. We expect markets like China to continue to contribute to our growth in this area.
Vitex:
In 2023 we have managed to grow our market share in the architectural paints segment in all the markets we operate. Higher premium products as well as innovative ones are very well accepted by our customers, a fact that rewards our long-term investment in people and processes as well as our curious mindset. Growth comes primarily from larger projects and the tourism industry in Greece and Cyprus while the consumers demand appears weak. In contrary we see stronger consumers sentiment and DIY demand in Bulgaria and Serbia.
CW: What is your business strategy for growth in 2024 and beyond?
AkzoNobel:We have good momentum heading into 2024 and expect to resume growing volumes while delivering further margin – and profit – expansion. Our roadmap for both growth and profitability gives us confidence that we can make a significant step change in the performance of the company. We see opportunities for sustainability-driven innovation and increased scale in select markets, which will drive low single digit volume growth in the mid-term.
We’re also aware that there’s significant value to be gained through improving our operations. We have bottlenecks in business-critical supply chains, under-investment in key sites and low capacity utilization. To help address this challenge, we’ve launched an industrial excellence program and expect to see the full benefits by 2027. It’s focused on reducing complexity, enhancing productivity and optimizing our network through the investment and modernization of our anchor sites. It aims to deliver cost reduction, enhanced efficiency, improved service levels and heightened overall competitiveness.
BASF:
Our customers are at the center of everything we do, and we will continue to support our customers in these transformational time of huge innovation need while staying competitive. This includes innovative products and services that meet the increasing demand for sustainability and environmental friendliness, especially in the automotive industry. We will use our global presence and our strong market position to drive growth. To enter new markets and expand our range of surface solutions, we will also actively explore opportunities beyond traditional paints and coatings, such as digital business models.
Benjamin Moore:
Our strategy is rooted in core strategic pillars that grow the business from the inside out, which starts with growing and engaging our people internally to foster a collaborative environment.
By staying close to our customers, we can better anticipate their needs and provide solutions and support to help them succeed, while building on the strong loyalty that directly contributes to our growth as a business. Further, we remain committed to ensuring the health and stability of the independent channel who extend an expertise and premium service experience to customers that can’t be found in other retail outlets.
Innovating and delivering a best-in-class premium product mix positions us well for growth across segments including the residential repaint and commercial segments, architectural and design community, and even for DIY.
Our focus on sustaining and growing the independent channel through we which we exclusively distribute our products yields growth opportunities through new store openings, and expansion into new regions both domestically and internationally.
Berger:
The Indian paint market has in recent times seen the entry of many new players with more in the pipeline. We believe there will be some tough competition in the days ahead and are preparing to address them.
Our overall business strategy is to remain focused on profitable growth. This will require us to keep expanding the distribution, creating and growing innovative, profitable brands, managing costs to protect margins and to retain talent.
CIN:
CIN is deeply committed to solidifying its position as a market leader in the Iberia and Africa markets, as well as expanding into new markets where we have production plants. As part of this commitment, we are currently investing heavily in enhancing our production plant and logistics capabilities. These initiatives are designed to improve our manufacturing processes, making them more streamlined and efficient. By doing so, we aim to accelerate our delivery times and reduce costs, allowing CIN to maintain our competitive advantage in the industry. Our efforts include implementing cutting-edge technologies and modernizing our equipment to improve production capabilities. We are also exploring new automatized logistics solutions to optimize our supply chain and improve delivery times. These enhancements will enable us to better serve our customers and meet their evolving needs. Overall, our goal is to continue to deliver high-quality products while expanding our reach into new markets. We are excited about the potential of these initiatives and look forward to sharing our progress with our valued customers and partners.
Hempel:
Building on the momentum of last year, we are in a robust position to accelerate growth in the years to come. The success and efficacy of our Double Impact strategy will see us continue our growth trajectory and we are confident that we are firmly on the path to establishing ourselves as an industry-winning enterprise. We will continue to invest in innovation, digitalization and our people, as these are the three key enablers of our strategy.
HMG:
This reply is very similar to the ones John Falder and Brian Falder would have provided throughout our history, in that it is continuing to develop long-term sustainable partnerships. The team at HMG has never been stronger in terms of personnel and we have some extremely exciting potentials in terms of customers and new products.
The nature of HMG’s business is that our diverse portfolio of products allows us to quickly adapt to market trends and even emerging markets and work closely alongside our customers to grow sustainably. There are no aggressive strategies for growth but a steady and sustainable growth pattern that allows us to focus on quality and consistency.
PPG:
PPG’s business strategy for growth in 2024 and beyond revolves around delivering consistent organic growth above global industrial production by leveraging technology-advantaged products, enhancing productivity, and driving sustainability throughout the supply chain. The company remains committed to modernizing and simplifying operations to sustain long-term value creation while balancing cash return to shareholders with investments for growth. By focusing on organic volume growth, continued margin recovery, operational efficiency, and strategic acquisitions, PPG plans to strengthen our market position and drive sustainable growth.
Vitex:
Our medium-term growth strategy in Greece is primarily through the ETICS systems. We have made significant investments to create capacity that will help our country’s ambitious targets for energy efficiency in buildings. . In parallel, we continue to invest in growing our architectural paints footprint, also in the Balkan states.
CW: In what areas are you focusing your R&D efforts?
AkzoNobel:We’re committed to capturing the opportunities that sustainability presents as a catalyst for innovation. We recognize that sustainability is driving changes in our industry and believe this aligns with our strengths in innovation and our leadership position in sustainability.
We continue to develop sustainable products that differentiate us from competitors, allowing us to gain market share and command higher margins. We’ll also focus on accelerating our development efforts and reducing time to market.
BASF:
Both automotive OEM customers and repair workshops are placing increasing emphasis on the sustainability of coatings. We have focused specifically on this area for many years and offer innovative products and processes to support our customers in achieving their individual sustainability goals. Our aim is to make the best possible use of existing resources and reduce CO2 emissions. For this reason, we have introduced products in both the automotive OEM and automotive refinish sectors that are certified according to the biomass balance method and are based on the use of renewable raw materials at the start of the production process. Reducing the energy consumption, introducing low VOC products, and increasing material efficiency are not only more efficient solutions, but also more sustainable.
In addition to sustainability, we are also investing in research and development to enhance the functionality of coatings, such as improving transparency for radar waves and reflection for LiDAR sensors, which are crucial for driver assistance systems and autonomous driving.
Benjamin Moore:
Our R&D team sits at the forefront of technology and innovation, consistently working to develop best-in-class formulations and contributing to many firsts in the industry.
We are currently rounding out an ongoing effort from the last few years focused on optimizing our product portfolio – inclusive of updating existing formulations, eliminating redundancies and reintroducing the Benjamin Moore brand portfolio within the market. This advancement is intended to streamline the solutions we offer our customers and simplify consideration and purchase.
New product introductions are informed by any gaps that we identify through this process, coupled with areas of opportunity we uncover with our customers, that can be solved through our innovation of new technologies and paint solutions.
Berger:
As an industry innovation leader, R&D is a mission critical function for Berger Paints.
Product Innovation: We are working on new formulations to enhance application properties, and environmental sustainability around low-VOC (volatile organic compound) coatings, anti-microbial coatings, and advanced color systems.
Raw Material Optimization: Researching alternative raw materials and ingredients to enhance product quality and reduce costs, while also directing attention to sustainable
sourcing practices.
Environmental Sustainability: We are also focusing on sustainability initiatives that will minimize the environmental impact of coatings throughout their lifecycle, from raw material sourcing to disposal. This encompasses developing biodegradable coatings, recycling programs, and energy-efficient manufacturing processes.
Market-Specific Solutions: In the area of protective coatings, automotive and industrial sectors, our research involves understanding customer requirements and meeting them through custom-created solutions.
CIN:
We divide our R&D activities according to our four main business units: Architectural, Industrial, Protective and Yachting and Marine Coatings.
In Architectural Coatings, our main efforts are aimed at replacing solvent-based enamels and varnishes for wood and metal with water-based ones. In this area, we are also actively working on the development of a bio-based paint that performs like our best-selling interior paint.
Concerning Industrial Coatings, we continue to develop tailor-made water-based coatings for many OEM customers who have very demanding specifications and whose industrial installations must meet VOC emissions. In this field, we are also involved in studying and exploring some smart paints, namely self-healing ones.
Regarding Protective Coatings, we are developing ultra-high solids coatings for the anticorrosive protection of metallic structures. In this area, we are also investigating water-based coatings and verifying their performance.
As far as Yachting and Marine Coatings are concerned, we are dedicating most of our time to adjusting some products from our portfolio, which have a great performance in European markets, in order to make them more suitable to cover other markets. In this field, we are also working on new antifouling products to meet the demanding requirements of BPR.
In order to ensure that our coatings meet the highest standards of environmental sustainability and occupational health and safety, we are constantly engaged in extensive research and development efforts. Our team works tirelessly to identify and replace raw materials that are not in line with emerging and future legislation and regulations so that our coatings remain at the forefront of compliance and innovation. We take pride in our commitment to creating products that are not only effective and reliable, but also eco-efficient and safe for use in any setting.
Hempel:
Innovation comes to life in all aspects of what we do – in how we develop new products and services, our business models and our new strategic initiatives. In 2023, we maintained sharp focus on innovations to develop more sustainable solutions that meet our customers’ needs, enabling them to lower their CO2 footprint while protecting and beautifying their assets.
The urgency of climate action has increased focus on innovation, particularly around optimizing processes, reducing use of raw materials and enabling our customers to reduce their environmental footprint. In the wind power industry, for example, we are working in partnership with key industry players to enhance wind turbine blade durability, reduce maintenance expenses and extend blade lifespan.
HMG:
Our R&D efforts are primarily focused on advancing sustainable technologies, enhancing product performance, and exploring ways we can add value to our customers by optimizing their processes.
We’re hoping the supply chain issues of the last few years are behind us and our R&D team can focus on developing the next generation of products which will become pillars of the HMG portfolio over the next decade and beyond.
PPG:
PPG continues to prioritize research and development efforts aimed at developing technology-advantaged products, enhancing manufacturing processes, and promoting sustainability. With a focus on customer needs and market trends, PPG collaborates with partners and customers to innovate and address emerging challenges. Sustainability remains a core focus, with ongoing efforts to reduce environmental impact and develop products that support customer sustainability goals. By continuing to invest in R&D and innovation, PPG aims to maintain its competitive edge and drive long-term growth and value creation.
Vitex:
Our R&D efforts are focused on serving consumer needs for healthier and safer indoor living environments as well as offering sustainable solutions for the Green Building sector which will grow further in our region. Last year we published Heath Product Declarations for several of VITEX’s products highlighting our material health excellence.
All our state-of-the-art outdoor protective coatings and ETICS provide excellent performance, low environmental footprint and verified unique sustainability characteristics. Beside these a new concept and driver “Meteo Works” is coming to introduce a new era towards more “climate resilient products.”
CW: What is your company’s long-term plans?
AkzoNobel:See answer to question 3
BASF:
The basis for long-term success is a strong team living a culture based on trust, courage, and empowerment. Times of transformation require all to embrace change with curiosity and implement bold ideas for the future always having the value for the customers in mind. Our long-term plans also involve expanding our range of surface solutions. In addition to our focus on automotive paint that enables our customers to stay competitive and successful, we also concentrate on solutions beyond paint and explore digital business models to enter new markets. To support this, our Digital Incubation Unit serves as a platform to nurture and develop innovative digital business ideas in the Automotive and Surface Solutions sector. There are many possibilities in the upcoming AI capabilities that we can not even dream of today. Sustainability will remain a key priority for us. We will work closely with our partners to implement strategies that align with our Net Zero targets and contribute to a more sustainable future.
Benjamin Moore:
For more than 140 years, Benjamin Moore has had one focus – to manufacture premium paint and beautiful colors that help to transform the spaces in which we live and work. We will continue to build on our industry-leading expertise and deliver a differentiated consumer portfolio to gain market share and accelerate growth by expanding both domestically and abroad.
Since our founding in 1883, we have remained committed to the independent channel – exclusively distributing our products through locally owned and operated stores. This commitment is steadfast into the future and we will continue doing our part to ensure the health of the channel by collaborating with our network of retailers to sustain and grow successful businesses.
Berger:
We have commenced our 100th year of business in India and are keenly aware of the enormous legacy that we have been entrusted with preserving and building on. Our vision is therefore achieving the status of being one of the most respected companies in the world in the paints and coatings sector. Some of the long-term plans that will guide us on the way to accomplishing that vision are:
Distribution Expansion: This is key to the long-term success of Berger Paints and will always form a critical element in all our plans regardless of what the length of the outlook.
Product Innovation: The low per capita consumption of the Indian paint market indicates the continuing potential for innovations in different price segments and product categories. The BOP category in decorative products as well as new solutions in construction chemicals and protective coatings offer the highest potential.
R&D Investments: To continue investing in research and development to drive product innovation, enhance performance, and differentiate offerings from competitors.
Brand Building and Marketing: Especially considering the increasingly crowded marketplace, strengthening the brand image and enhancing marketing efforts to increase brand awareness, customer loyalty, and brand equity is extremely crucial.
Operational Excellence: With the anticipated pressure on margins from increased competition, improving operational efficiency, supply chain management, and manufacturing processes to reduce costs, increase productivity, and maintain quality standards takes on special importance. This would possibly entail investments in automation, technology upgrades, and continuous improvement initiatives.
Sustainability Initiatives: In keeping with our ESG compliance norms, we will be focused on reducing environmental impact, promoting circular economy principles, and addressing social responsibility concerns. Some of these will include the integration of sustainable practices into business operations, responsible sourcing of raw materials, suitable manufacturing processes, and product stewardship.
Talent Development: We have been increasingly investing in employee training, that include talent and leadership development programs. Our open organizational culture aids a culture of innovation, collaboration, and continuous learning and this is something we are very keen to preserve.
Customer-Centricity: Having come this far by prioritizing customer satisfaction and building long-term relationships with them, Berger Paints will continue to look for ways of delivering value-added solutions, exceptional service, and personalized experiences.
Digital Transformation: A few years ago, Berger embarked on a calibrated but expansive digital transformation encompassing all functions and business lines. Depending on the function and area of operations, this exercise covered Logistics and Supply Chain, Inventory Management, Human Resources and Digital Learning, CRM Enhancement, IoT, Robotic Process Automation, Data Analytics, Business Intelligence, Colour Visualization tools, Financial Management, e-Commerce, Digital Marketing and Cybersecurity. We are at the far end of that transformation cycle that has already transformed the organization and made it more nimble, agile and purposeful in its approach.
CIN:
Looking ahead, our topmost priority is to consolidate and enhance our leadership position. We are steadfast in our unwavering commitment to upholding the most superior quality standards across every facet of our operations. Moreover, CIN is fully dedicated to integrating sustainable practices into our business framework, with the ultimate goal of creating a future where excellence and environmental responsibility are in perfect harmony
Hempel:
We are committed to our growth journey – not just because it makes good business sense, but because it will maximize the positive impact that our company, people and owner can have together on the world around us.
We unveiled our Double Impact strategy in 2020 with the ambitious goal of doubling both our revenue and positive influence within a five-year time-frame. Thanks to the success of this strategic framework, we have extended its application beyond the initial 2025 horizon.
In 2023, we added a fourth pillar to our strategy called Scalable Operations. We did so to make sure that we maintain focus on fostering a highly profitable business that is scalable for future growth. Our ultimate goal is to increase value creation for the Hempel Foundation, so it can have an even more positive impact on society through its important philanthropic work.
HMG:
Our ongoing commitment is to invest in our infrastructure (production, logistics, R&D and more) along with that of our people. Our people are the bedrock of our future and investing in them will only enhance the efficiency and performance of HMG. This has been evident amongst our senior leadership team, who have taken on a number of challenges over the last 12 months and have created outcomes that have positively impacted the performance of the business. We enter 2024 with a strong foundation and an unwavering focus on a future that holds great promise and together we will continue to drive our company forward.
PPG:
Our company’s long-term plans prioritize sustained growth, innovation, and value creation for our stakeholders. We’re committed to maintaining our global leadership in paints and coatings by delivering technology-advantaged products that enhance productivity and sustainability for customers. We’ll continue investing in research and development to innovate new customer-focused solutions and streamline operations using digital technologies to drive efficiency and operational excellence worldwide.
From a capital allocation perspective, we’ll return value to shareholders through dividends and prudent share repurchases while pursuing strategic acquisitions to complement our capabilities and support growth. Expanding into emerging growth markets, capitalizing on electric vehicle trends, and strengthening our presence in the aerospace, automotive, and protective coatings sectors are key objectives.
Sustainability remains paramount. We’re dedicated to reducing our environmental footprint, promoting sustainable practices, and developing eco-friendly products. With a focus on long-term sustainability, innovation, and strategic growth, we’re poised to deliver value and success for years to come.
Vitex:
Our long-term plan relates to technology and excellence. We will continue our successful path of balancing exploration into the long term and execution in the present time. We are already in the process and investing in incorporating digitalization practices to optimize our processes and maximize our efficiency. Moreover, we are developing our foresight by trying to create a futures thinking mindset that will help us bring even more innovations to our customers and elevate our profile as a dynamic, efficient and fast moving company. This strategy translates into a bouquet of products and services that are unique to our customers. We will continue to create daily wonders with science,
fun and care.