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AkzoNobel Decorative Paints
Americas


Overview

Challenging market conditions throughout the Americas affected our overall financial performance during the year. But by implementing new growth programs, aggressive cost management and introducing various improvement initiatives we were able to partly mitigate the adverse impact as we prepared the business for renewed growth. In North America, the effort resulted in sales and profit increases for the year.

Analysis

The economy grew less than projected in Latin America, in contrast to 2011, when the area was more resistant to the slowdown. Argentina was hit particularly hard while Brazil was more or less flat, with the paint market throughout the region remaining sluggish at best. The strong US dollar also had a negative effect. In North America, we combined our activities in the US and Canada into one business. After a difficult first quarter, our performance in the US grew stronger as the year progressed, largely due to intensive efforts to structurally improve the business. This included complexity reduction programs and a keen focus on margin management. In Canada, where we hold the number one position, we achieved market share growth and strengthened our brand portfolio. New growth opportunities were also identified, as well as excellent potential to benefit from cost synergies. During the year, we began implementing a standard ERP system at sites throughout the Americas, a major program which had an associated cost impact. Meanwhile, the continued rationalization of our manufacturing footprint included closing our Rio de Janeiro warehouse, a manufacturing facility in Pontiac, Michigan, and preparing the sale of our Raposo Tavares site in São Paulo.

Highlights

We announced the divestment of our North American business to PPG Industries, Inc., in order to allow the company to focus on key markets in Europe and high growth regions. In Latin America, the Tudo de Cor Para Você program (All the Colors For You), continued its success. The initiative, part of our Let’s Colour campaign, involves painting deprived neighborhoods. More than 1,000 events run by customers in Brazil have now taken place. This is helping to boost sales of our Coral brand, as well as building brand equity. Coral also launched a new product concept called 3 in 1 which has multiple benefits for the consumer. In addition, an entire favela of 1,500 dwellings (Santa Marta in Rio de Janeiro), is being painted with Coral products by members of the community who have been given special training. In Canada, we opened a new R&D center in Longueuil and a state-of-the-art distribution center in Toronto, while the Sico brand marked its 75th anniversary and Glidden celebrated 55 years in Puerto Rico.

Developments

We received a number of awards during the year, including the coveted Walmart sustainability award, Supplier of the Year from The Home Depot, Canada, and five important “best buy” designations for Glidden. It was a relatively busy year for product launches, notably CIL Premium and CIL DUO in Canada, the Flood brand’s OneCoat waterproofing finish and Glidden DUO Paint + Primer. We also introduced the Glidden on the go mobile app for smartphones, which means selecting the perfect color and paint is now just a tap away. In Latin America, former tennis star Gustavo Kuerten helped to promote the Coral brand’s premium Decora range in Brazil. We used life-size displays of him in over 700 stores and sold 15 percent more of the product in these outlets.

Bob Taylor, Managing Director North America – Decorative Paints Americas (photo)

Bob Taylor
Managing Director North America

Jaap Kuiper, Managing Director Latin America – Decorative Paints Americas (photo)

Jaap Kuiper
Managing Director Latin America

Revenue*
in € millions

Decorative Paints Americas – Revenue in € millions (bar chart)

*  Excludes North American revenues

Key brands

Decorative Paints Americas – Key brands (logos)

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