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Note 7: Property, plant and equipment


In € millions

 

Buildings and land

 

Plant equipment and machinery

 

Other equipment

 

Construction in progress and prepayments on projects

 

Assets not used in the production process

 

Total

1

Including Decorative Paints North America.

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at January 1, 2011

 

 

 

 

 

 

 

 

 

 

 

 

Cost of acquisition

 

2,254

 

5,654

 

664

 

279

 

33

 

8,884

Accumulated depreciation/impairment

 

(1,059)

 

(3,908)

 

(508)

 

 

(25)

 

(5,500)

Carrying value

 

1,195

 

1,746

 

156

 

279

 

8

 

3,384

 

 

 

 

 

 

 

 

 

 

 

 

 

Movements in 2011

 

 

 

 

 

 

 

 

 

 

 

 

Acquisitions through business combinations

 

42

 

27

 

6

 

1

 

 

76

Divestments

 

(26)

 

(1)

 

(1)

 

(1)

 

(1)

 

(30)

Capital expenditures

 

110

 

365

 

81

 

151

 

1

 

708

Transfer between categories

 

 

(7)

 

9

 

(2)

 

 

Depreciation1

 

(80)

 

(313)

 

(57)

 

 

(1)

 

(451)

Impairment

 

(2)

 

(6)

 

 

 

 

(8)

Changes in exchange rates

 

4

 

21

 

 

 

1

 

26

Total movements

 

48

 

86

 

38

 

149

 

 

321

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2011

 

 

 

 

 

 

 

 

 

 

 

 

Cost of acquisition

 

2,330

 

5,906

 

750

 

428

 

28

 

9,442

Accumulated depreciation/impairment

 

(1,087)

 

(4,074)

 

(556)

 

 

(20)

 

(5,737)

Carrying value at year-end 2011

 

1,243

 

1,832

 

194

 

428

 

8

 

3,705

 

 

 

 

 

 

 

 

 

 

 

 

 

Movements in 2012

 

 

 

 

 

 

 

 

 

 

 

 

Acquisitions through business combinations

 

7

 

19

 

1

 

4

 

 

31

Transfer to assets held for sale

 

(82)

 

(88)

 

 

(15)

 

(2)

 

(187)

Divestments

 

5

 

(64)

 

(5)

 

(22)

 

1

 

(85)

Capital expenditures

 

62

 

327

 

91

 

371

 

1

 

852

Transfer between categories

 

31

 

64

 

2

 

(100)

 

3

 

Depreciation1

 

(89)

 

(345)

 

(68)

 

 

(1)

 

(503)

Impairment

 

(10)

 

(11)

 

(6)

 

(5)

 

(2)

 

(34)

Changes in exchange rates

 

(10)

 

(14)

 

5

 

(21)

 

 

(40)

Total movements

 

(86)

 

(112)

 

20

 

212

 

 

34

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2012

 

 

 

 

 

 

 

 

 

 

 

 

Cost of acquisition

 

2,295

 

5,943

 

818

 

648

 

30

 

9,734

Accumulated depreciation/impairment

 

(1,138)

 

(4,223)

 

(604)

 

(8)

 

(22)

 

(5,995)

Carrying value at year-end 2012

 

1,157

 

1,720

 

214

 

640

 

8

 

3,739

Capital expenditures

  • In Decorative Paints, we are investing to expand our production capacity to meet the growing demand of China’s western region
  • In Performance Coatings, we are investing in multiple projects, with the largest being the increase in the production capacity of our Automotive and Aerospace Coatings business in China to meet rising demand
  • In Specialty Chemicals, we are investing in facilities being built in Brazil to supply the world’s largest pulp mill in Eldorado as well as a pulp mill in Suzano. We are also investing in Ningbo, China, and in our chlorine plant in Frankfurt, Germany, to convert to membrane electrolysis technology

Impairments

In 2012, impairment charges have been recognized for an amount of €34 million (2011: €8 million). The impairment charges have been recognized in the cost of sales. The impairment charges related to restructuring activities in, among others, the US, Germany, Mexico and Italy.

Commitments

The carrying value of the property, plant and equipment financed by hire purchase and leasing and not legally owned by the company was €52 million (2011: €9 million) which is related to buildings and land, €1 million to plant and equipment and machinery. Purchase commitments for property, plant and equipment totaled €89 million (2011: €49 million).

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