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    Features

    AkzoNobel Widens its Powder Coatings Reach

    On the heels of AkzoNobel's recently announced plans to acquire Dow Chemical's powder coatings business, Coatings World spoke with Rob Molenaar, managing director of AkzoNobel Powder Coatings, about the transaction as well as the state of the global powder coatings market.

    Tim Wright12.02.09
    Already the world's largest manufacturer of powder coatings, AkzoNobel has enhanced its portfolio after signing an agreement with Dow Chemical to acquire its powder coatings activities.

    The deal will bring key technological know-how and synergy to AkzoNobel Powder Coatings, as well as enhance the company's position in the U.S.

    The powder coatings activities were purchased by Dow earlier this year as part of its acquisition of Rohm & Haas.

    Rohm & Haas' powder coatings business had revenue of $330 million in 2008 and ranked No. 37 in Coatings World's Top Companies Report (see July '09 issue).

    With more than 80 yeas of powder coating experience Rohm & Haas was one of the original innovators in the field. Its markets included automotive, industrial, consumer and general metal products.

    At the time of the announcement, Leif Darner, the AkzoNobel board member responsible for the company's performance coatings segment, said in a statement, "This is a strategic acquisition, which will enable us to further penetrate key industrial coatings segments. By adding new powder technologies to our extensive portfolio we will be even better equipped to lead the way in meeting increasing demand for innovative products with strong environmental profiles."

    Operating powder coating factories in the U.S., Europe and China, Rohm & Haas developed several important new technologies-especially for the automotive and architectural segments-while the deal will also add MDF and termoplastic capabilities to AkzoNobel's exisiting portfolio.


    Rob Molenaar, managing director of AkzoNobel Powder Coatings, said, "The continued growth of powder coatings will largely depend upon technology development facilitating the switch from liquid to powder. Clearly for both plastic and wood this means curing through a different medium or at lower temperatures."

    "Our intention is to move towards a more dedicated approach, whereby sites concentrate on specific technologies," said Rob Molenaar, managing director of AkzoNobel Powder Coatings. "These planned manufacturing enhancements and synergies will deliver improved operational efficiency and ultimately enable us to better serve our customers worldwide."

    Powder coatings offer an an attractive alternative to liquid coatings due to the fact that they are inherently sustainable because they contain no solvents and have application efficiency levels near 100%.

    Coatings World recently spoke with Mr. Molenaar, about AkzoNobel's plans to acquire Dow's powder coatings activities as well as the state of the global powder coatings market.

    Coatings World: Mr. Molenaar, AkzoNobel recently announced its plans to acquire the powder coatings business of The Dow Chemical Company. In addition to capital gain, which further solidifies Akzo's role as the world's largest producer of powder coatings, from what other angles does this acquisition bolster the powder coatings business? What is the strategy behind this purchase?

    Rob Molenaar: The long term continued growth of the powder coatings market, with its inherently low ecological footprint, makes this an excellent addition to our existing portfolio. In addition, key technological know-how and the market position with trade coaters in the U.S. makes this a very nice acquisition.

    CW: Is this purchase in any way designed to offset negative effects felt by the down economy?

    Molenaar: No. Clearly AkzoNobel views this acquisition as strategic and the timing of the acquisition was not influenced by the current recession.

    CW: What new technologies does this deal add to AkzoNobel Powder Coatings' portfolio? What can we expect coming down the R&D pipeline?

    Molenaar: It is a little bit too soon to comment about specifics in the R&D pipeline. It is obvious that by combining the R&D departments and the current knowledge bases, a great potential exists to further advance in a number of areas, for instance wood and plastic.

     
    CW: How would you characterize the state of the global powder coatings market and how has the global recession impacted AkzoNobel's powder coatings business? How would you characterize the effects on certain regions (NA, Western Europe, Eastern Europe, Asia, etc.)?

    Molenaar: The global industrial coatings market has seen a major decline, well in excess of 30%. Some regions, such as Europe, have seen even bigger declines due to lower demand in some of the segments in which we operate, like consumer durables, automotive and construction.

    CW: What can we expect moving through the next few quarters from AkzoNobel Powder Coatings? Describe AkzoNobel's strategy for navigating these turbulent times in addition to the planned acquisition of the Dow powder coatings business?

     
    Molenaar: AkzoNobel signed an agreement to acquire Dow's Powder Coatings business on November 12, 2009. The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close during the second quarter of 2010. The economic landscape seems to be improving so we are excited about the possibilities the combination creates for 2011 and beyond.

    CW: What is your outlook for continued growth in powder coatings segment in the coming years, and how will AkzoNobel play a role in helping that growth? What are your predictions for the powder coatings market in the short-, mid- and long-terms?

    Molenaar: The growth of the industrial coatings market will very much depend on the economic prosperity of the different regions around the world. It is obvious that our rate of growth in the emerging markets will be higher then in the developed markets of the U.S. and Europe. The continued growth of powder coatings will largely depend upon technology development facilitating the switch from liquid to powder. Clearly for both plastic and wood this means curing through a different medium or at lower temperatures. With the acquisition of Dow's powder coatings unit AkzoNobel demonstrated its commitment to the industrial coatings market and its confidence in powder coatings as a technology.

    CW: What end-use markets are growing fastest? Are new markets opening up?

    Molenaar: New markets like wood substrates and plastics depend on technological advancements. Overall we are seeing many market segments grow due to a renewed interest in no solvents, low energy consumption and high transfer efficiencies.

    CW: In addition to the bad economy, what are the other key trends and challenges manufacturers of powder coatings face now and in the years ahead?

    Molenaar: Clearly the coatings industry continues to face challenges and fantastic opportunities. These are not necessarily related to the cycles in the economy. The attractiveness of our industry is one of those. We need to be able to attract excellent employees to our industry and we need to support the industry with education and training. We must continue to drive innovation in the industry and clearly commit ourselves to reducing our eco footprint. Challenges and opportunities that are important for the coatings industry in the long term are not necessarily related to the economic recession.

    CW: What are the emerging markets and segments for AkzoNobel's powder coatings business? How would you characterize China's powder coatings market? Last time I checked it was the largest in the world and given the growth of the automobile industry there, probably will be for a long time.

    Molenaar: China has the opportunity to be the largest industrial coatings market in the world. Our long presence in the powder business in China (over 20 years) has clearly given us some advantages. One of those is to continue to support our international customer base. Also, our recent expansion in Eastern Europe, Russia and the Middle East provides a great benefit to our customers with global reach.

    CW: What technologies are driving the market now and what can we expect down the road in terms of powder coatings technology? Will new technology lead to expanding potential substrate opportunities?

    Molenaar: Obviously wood and plastic substrates are providing fantastic opportunities.

    Side bar


    AkzoNobel Powder Coatings at a Glance



    AkzoNobel is the world's largest manufacturer of powder coatings. AkzoNobel Powder Coatings is part of company's performance coatings segment. In 2008 AkzoNobel's industrial activities, which is the largest segment in the performance coatings group and combines AkzoNobel Industrial Finishes and AkzoNobel Powder Coatings together, reported sales of approximately $2.75 billion. Total coatings sales for AkzoNobel, including decorative paints, marine and protective coatings, car refinishes, packaging coatings, and industrial activities, amounted to roughly $14 billion. As the largest manufacturer of powder coatings, AkzoNobel is also a leader in powder coatings technology and a top supplier to the appliance, architectural, automotive, furniture and IT markets, amongst others. On a smaller scale, its non-stick
     
    coatings also help make high-performance kitchenwear. AkzoNobel Powder Coatings has more than 30 manufacturing plants and a global marketing strategy fine tuned to meet local needs. It promotes primarily two global brands-Interpon and Resicoat. Interpon Powder Coatings are solvent-free paints which can be applied to metal and other conductive surfaces. Applications include appliance; architectural; automotive; furniture; general industry; general trade coaters; and IT. Under the Resicoat brand, AkzoNobel's functional powder coatings specialize in high performance coatings for anti-corrosion and electrical insulation. Applications include electrical insulation; valves and fittings; pipelines (internal and external); and rebar.
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