Change

“We had a strong 2011 and were sold out for most of the year”

Overview

We had a strong 2011 and were sold out for most of the year. We utilized our capacity in the most profitable way – supplying high value specialty niches – and combined this with robust margin management to offset major raw material price increases. As a result, we were able to improve on the previous year’s financial performance. Despite some softening in consumer-oriented sectors, we performed very well in industrial areas such as agrochemicals, mining and oilfield due to their dynamic, fast-growing markets and the demand for these types of specialty chemicals worldwide.

Analysis

It was a good year, particularly for our agrochemicals activities, while high oil prices supported an active drilling market for our oilfield chemicals products. Sales to the mining market were very strong, leading to an excellent year for our separation products, especially in Canada, where they are used by the major fertilizer producers. But the asphalt road paving market stalled, mainly because governments did not invest as much as expected in infrastructure. Personal Care, along with our fabric and cleaning activities, experienced some early softness, but recovered later. We also felt pressure from significant increases in raw materials costs – which rose almost 30 percent in some cases – and had problems sourcing some of them. However, demand for our products remained buoyant, notably in Asia and Brazil, while our European business bounced back as the year progressed and achieved the most significant improvement, leading to a strong end to 2011 overall.

Highlights

In July, we announced a major acquisition of Boxing Oleochemicals, the leading supplier of nitrile amines and derivatives in China and Asia (see case study Achieving our growth ambitions). The acquisition will consolidate our premier position in specialty surfactants and gives us a significant manufacturing base in Shandong Province, enabling us to source our products more effectively and cost efficiently. The deal also represents a fundamental milestone in our strategy, part of which is to expand capacity and increase our presence in Asia, while helping local customers to enhance and differentiate their products. In addition, we boosted our technology portfolio in sustainable chemistry by acquiring from Integrated Botanical Technologies its patented Zeta Fraction technology, which is transforming how plant-based chemistry is used. We are using the technology for personal care applications and investigating ways of using it elsewhere within AkzoNobel. In addition, our newest hybrid technology platform generated its first successful water-soluble bio-polymers: Alcoguard H 5240 (used in automatic dishwasher and laundry detergents) and BioStyle CGP (used in hair styling products). Based on more than 60 percent renewable resources, our hybrid polymers are unique, plant-based alternatives to petrochemical-based polymers.

Developments

Several other new products were launched, including Armid FPC, an environmentally-responsible solvent for water soluble agrochemical applications. We also introduced Armovis EHS, a thermally stable, self-breaking viscosity system for oilfield applications. Around 70 percent of our portfolio is based on products that provide eco-premium solutions and we continued to work hard on developing innovative, sustainable technologies to meet customers’ unmet needs. We also made significant progress toward our Diversity & Inclusion goals by increasing the number of female executives (17 percent) and high growth country executives (13 percent).

Bob Margevich, Managing Director – Surface Chemistry (photo)

Bob Margevich
Managing Director

Revenue in € millions

Surface Chemistry – Revenue in € millions (bar chart)

Geo-mix revenue by destination in %

Surface Chemistry – Geo-mix revenue by destination in % (pie chart)

Main products

  • Surfactants
  • Synthetic polymers
  • Bio-polymers

Key markets

  • Agriculture
  • Asphalt
  • Home and personal care
  • Oilfield chemicals
  • Coating additives
  • Lubes and fuels
  • Water treatment
  • Mining

Key product lines

  • Armeen
  • Arquad
  • Berol
  • Adsee
  • Ethomeen
  • Naviance
  • Alcoguard
  • Witconate

Key brands

Surface Chemistry – Key brands (logo)
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Copyright © 2012 Akzo Nobel N.V.