“Our performance in Western Europe was excellent, Asia grew steadily and we had a strong year in North America”
The major focus was on integrating the Rohm & Haas powder coatings activities we acquired in 2010. The first full reporting year of the combined business demonstrated record performance in both sales and EBITDA, while the projected synergies were also fully realized. The performance exceeded forecasts made at the time of the acquisition, and although changing trends in the global economy meant that 2011 was a year of two halves, we were still able to grow the overall business.
We had a good first six months, driven by a rebound in Western Europe and increased sales in high growth markets. The second half of 2011 told a different story. The worsening eurozone crisis sparked a slowdown and we experienced a drop in demand, particularly in Southern Europe. Rocketing raw material prices – notably for titanium dioxide and polyester resin – created severe pressure on margins. Despite these challenges, we were still able to make good progress. Our performance in Western Europe was excellent, Asia grew steadily and we had a strong year in North America. Much of this success was down to the additional market strength we derived from the Rohm & Haas deal, coupled with careful margin management.
In April, we opened a state-of-the-art powder resin polymer lab at our Felling site in the UK. We are carrying out innovative work there to develop differentiated resins, with a special focus on resins for low temperature cure. The lab will feed our network of powder technology centers, which include facilities in China and the US, with another planned in Europe. This strategic investment in innovative research is designed to expand our market space and develop new platforms for future growth. We also opened a new factory in Monterrey, Mexico, and expanded our plant in Izmir, Turkey, where we are concentrating our expertise in special effects products. Towards the end of the year, AkzoNobel Powder Coatings became the first coatings manufacturer in the world to receive global SMaRT© (Sustainable Materials and Rating Technology) certification. This is a world-leading, third party, independent certification which verifies that our whole process is sustainable. We achieved a platinum rating, which is the highest possible. In addition, we became a preferred global supplier to agricultural machinery manufacturers John Deere.
Our Functional Powders business launched a new low temperature cure, single layer, pipeline product called Resicoat R-726LAT which can be used to coat joints in the field. It offers the same finish and performance as traditional three-layer systems, only it saves customers energy costs, as well as time and resources. We also introduced Interpon AM, which has been specifically designed for hygiene sensitive environments. It was developed in partnership with BioCote, a leading antimicrobial specialist, and is being used in facilities such as labs and hospitals. Another notable launch was our new low temperature cure primer for automotive wheels – Interpon A4700 – which enables customers to make energy savings, as well as offering line speed efficiencies. In India, we achieved a major breakthrough in automotive coatings with the use of an Interpon single layer powder topcoat on the Tata Iris mini-passenger vehicle (see case study ). It was the first mainstream passenger vehicle production line in the world to use a powder monocoat. The Tata Iris is now in production and sales of powder coated vehicles are expected to rise to 50,000 per annum.
Revenue in € millions
Geo-mix revenue by destination in %