Note 8: Property, plant and equipment

Capital expenditures

  • In Decorative Paints, we are investing in high growth markets and in creating efficiency in Europe
  • In Performance Coatings, we are investing in multiple projects, with the largest being the increase in the production capacity of the Automotive and Aerospace Coatings business in China to meet rising demand
  • In Specialty Chemicals, we are investing in facilities being built in Brazil as part of the Chemicals Island concept with Suzano and Eldorado. The plant in Jupiá, supplying the world’s largest pulp mill Eldorado, became operational earlier in the year. We are also investing in our chlorine plant in Frankfurt, Germany, to convert to membrane electrolysis technology

Impairments

In 2013, impairment charges have been recognized for an amount of €67 million (2012: €34 million). The impairment charges have been recognized in cost of sales and in other operating income. The impairment charges are related to restructuring activities, mainly in Europe.

Financial lease

The carrying value of the property, plant and equipment financed by hire purchase and leasing and not legally owned by the company was €51 million (2012: €52 million) of which €46 million is related to buildings and land, €1 million to plant equipment and machinery and €4 million to other 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, 2012

 

 

 

 

 

 

 

 

 

 

 

 

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

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

Movements in 2013

 

 

 

 

 

 

 

 

 

 

 

 

Acquisitions through business combinations

 

2

 

1

 

 

 

 

3

Transfer to assets held for sale

 

(23)

 

(24)

 

(3)

 

(1)

 

 

(51)

Divestments

 

(22)

 

(33)

 

(6)

 

3

 

(1)

 

(59)

Capital expenditures

 

47

 

178

 

53

 

387

 

1

 

666

Transfer between categories

 

66

 

267

 

17

 

(351)

 

1

 

Depreciation

 

(75)

 

(321)

 

(75)

 

 

(1)

 

(472)

Impairment

 

(30)

 

(34)

 

(2)

 

(1)

 

 

(67)

Changes in exchange rates

 

(57)

 

(76)

 

(1)

 

(35)

 

(1)

 

(170)

Total movements

 

(92)

 

(42)

 

(17)

 

2

 

(1)

 

(150)

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2013

 

 

 

 

 

 

 

 

 

 

 

 

Cost of acquisition

 

2,214

 

5,963

 

797

 

646

 

60

 

9,680

Accumulated depreciation/impairment

 

(1,149)

 

(4,285)

 

(600)

 

(4)

 

(53)

 

(6,091)

Carrying value at year-end 2013

 

1,065

 

1,678

 

197

 

642

 

7

 

3,589