Amsterdam, the Netherlands
During 2010, AkzoNobel continued to invest in growth throughout its business. Highlights include the opening of its €275 million Ningbo plant in China in November, selective acquisitions in Performance Coatings and a milestone contract with Walmart.
In Performance Coatings, AkzoNobel consolidated the acquired former Dow Chemical powder coatings activities; acquired the Lindgens Metal Decorating and Inks business; and acquired Changzhou Prime Automotive Paint Co., Ltd. to grow its car refinishes business in China.
Asia has a fundamental role to play in AkzoNobel’s growth strategy. China in particular is integral to its strategic focus on the world’s high growth regions, highlighted by its intention to achieve a $3 billion revenue target in China by 2015—doubling the previous target. AkzoNobel currently employs around 6,500 people in China and has close to 30 production sites located there.
Prime was one of China’s largest vehicle refinish suppliers and a leader in the fast-growing mid-market segment. This sector is estimated to double in size within the next five years. Prior to the Prime acquisition, AkzoNobel was mainly active in China’s premium and commercial vehicle refinish sector, represented by its Sikkens, Lesonal and Miluz brands.
Performance Coatings sales in 2010 were $6.4 billion. Other key developments for the business unit in 2010 include the inauguration of a new powder coatings plant in Wuhan, China, and a lab in Ningbo, China; the official opening of new, worldwide marine testing lab in Singapore; and investment in expansion of capacity for coil coatings in Bangalore, India.
In addition, work got underway on a new wood finishes and adhesives plant in Vietnam; aerospace coatings activities merged into the car refinish business; and there was a marine and protective coatings investment in a UK-based global fire protection center of excellence.
Key developments included a deal with Walmart to become the retailer’sprimary paint supplier in the U.S. and Dulux Trade won a contract to paint the London 2012 Olympic Games site.
During the year AkzoNobel was selected by Wal-Mart to be the primary paint supplier for the retailer’s U.S. stores. The deal called for the development and manufacture of a portfolio of interior and exterior paints for more than 3,500 Wal-Mart stores nationwide. This agreement built upon AkzoNobel’s already existing relationship with the world’s largest retailer for paints in Puerto Rico and Canada, and with Liquid Nails adhesives in the U.S.
The new in-store program was a landmark deal which significantly boosted AkzoNobel’s market share in the U.S., where it currently ranks second behind Sherwin-Williams, and contribute to further enhancing the value of its Glidden brand there. Sherwin-Williams was the previous supplier of decorative paints to Wal-Mart.
Wal-Mart began the transition to AkzoNobel products early in 2011. AkzoNobel Decorative Paints in the Americas (Canada, U.S. and Latin America) currently employs roughly 7,200 people and generates revenue of $2 billion. It operates eight paint manufacturing and distribution sites in the U.S. and a global research and development center in Strongsville, Ohio. The portfolio consists of architectural coatings and wood care products, as well as adhesives and caulks.