Valspar Strengthens Brazil Investment

Valspar Corp.’s recent acquisition of Brazil’s Isocoat Tintas e Vernizes Ltda., located in Araçariguama, in São Paulo state, further strengthens Latin American sales of powder, liquid and electrodeposition coatings for the company, which has been working to augment growth in foreign sales.

Isocoat, which began business producing electrostatic dust coatings, had sales of $34 million last year, and has the capacity to produce 10,000 metric tons of product per year, according to a company report. Among its export markets are Argentina and Colombia. Isocoat is a leader in the industry in Brazil and was the first Brazilian dust coatings company to gain certification from Qualicoat under the Zurich-based Association for Quality Control in Lacquering, Painting and Coating Industry.

Apart from its Isocoat acquisition in Brazil, Valspar in 2006 formed a joint venture with Tekno S.A. to supply coil coatings in the country. Tekno augmented its coil coating line capability with a $28 million investment at its facility in Guaratinguetá, in Sao Paulo state, in 2009. Tekno products are marketed under the Kroma brand.

Tekno operates four subsidiaries. The first is Tekrom Transportes Representacoes e Montagens Ltda, which provides freight transportation services. Next, Profinish Industria e Comercio de Produtos Quimicos Ltda, manufactures chemical products for metal and plastic surface treatment. MSC/Tekno Laminates and Composites Ltda, manufactures and sells laminates and composites for the automobile industry. And finally, Perfilor SA Construcoes, Industria e Comercio, produces and commercializes steel tiles and furniture covers for the industrial sector.

Valspar’s powder coating brands in Brazil include Poliéster TGIC, Poliéster Epóxi Híbrido, Epóxi and Poliéster Uretano. The company also markets Vectrogard electrocoatings.

Elsewhere in Latin America, Valspar has a subsidiary in Mexico. Valspar Mexicana, S.A. de C.V. brands include Valspar, EzDex, EcoDex, Duraspar, Valflex, Fluropon, Dynaprime, Greenbar and Vectrogard. In 2000, Valspar acquired Lilly Industries, including its manufacturing operations in Mexico.

In its most recent annual report, Minneapolis-based Valspar noted that it expected growth in coil coatings business in Brazil, Vietnam, China, Australia and India.
In 1996, Valspar derived only five percent of its global sales outside of the U.S., but by 2006, the foreign sales share rose to more than 30 percent. Much of this foreign revenue was based on foreign manufacturing, since only 3.5 percent of the company’s sales resulted from exports in 2006.

Valspar reported 2010 sales at $3.22 billion, up 12.1 percent from 2009. Net income for 2010 was $222.1 million compared with $160.2 million in 2009.

Environmental issues are core considerations at Valspar, which reports its environmental impact annually, and provides support to community efforts such as Habitat for Humanity. Separately, the Valspar Foundation supports philanthropic projects and provides emergency relief on a global basis. The company reports its VOC emissions, other hazardous air pollutants, as well as material use efficiency and waste minimization, and energy efficiency and management. Over the past five years, Valspar has cut its total emissions roughly in half.