Change

AkzoNobel Decorative Paints
performance


'There can be no doubt that 2009 was a challenging year for AkzoNobel Decorative Paints, following the exciting and historic events of 2008. The ongoing integration activities and tough business climate certainly concentrated our focus. But we were determined to turn the economic crisis into an opportunity and used it as an additional drive for change and reinvention as we maintained our push to develop winning businesses in all regions.

Integration on track

So while we had to cope with the strong impact of the downturn and carefully manage our margins, particularly in Europe and the US, we remained on track with integrating the former ICI activities and continued to capture the expected savings resulting from the synergies associated with the acquisition. In this respect, our “best of both” approach – looking for the best talent, processes and products – clearly paid off.

Transforming the organization

Our primary focus in Europe during 2009 was on rationalization and removing complexity. We further reduced the number of brands and stock keeping units and made good progress in integrating the supply chain and becoming a more regional/global organization, as opposed to being organized on a purely local basis. In Asia, we reorganized and created three distinct regional businesses. This now gives us a more direct focus on high growth markets and will help to deliver better profitability in the medium to long term as we target further growth and allocate more resources to our Asian activities. It was a challenging year in the US, but the relaunch of our Glidden brand proved to be highly successful and strengthened our relationship with The Home Depot. In Latin America, the downturn had less of an impact and we achieved good profit levels.

Of course, innovation remained a priority despite the adverse impact of the global economy and we continued to launch eco-premium products in all our markets. This included the introduction of Dulux All Round Guard throughout China, a product which absorbs and decomposes harmful elements from the air to create a safer home environment. Customer innovation was another key focus area, highlighted by a special program in India which involved educating around 100,000 painters about our Dulux brand portfolio. Dulux also won several awards – notably in the UK – honoring the sustainable nature of our products. This recognition helped to underline our status as the first major paint manufacturer to make a significant move towards creating credible environmentally sustainable paint products for the consumer and professional markets. I’m also proud to mention a special “Tudo de Cor” project in Brazil, which saw our Coral brand – and our employees – help to revitalize old neighborhoods in São Paolo and Rio de Janeiro.

Cohesive community

This year was also extremely important in terms of continuing to create the right high performance culture. We have a major transformation agenda committed to creating a cohesive community and we made great strides with our ongoing leadership program. The feedback we have received from employees has been extremely positive and this journey towards providing meaning and inspiration to the whole organization will continue during 2010.

Armed with a new global strategy, we can confidently move forward and reap the rewards of our stronger, more focused organization. There is still some progress to be made, but there is no doubt that we will emerge from the downturn in better shape to capture the growth opportunities that a revitalized economy will present.‚

Tex Gunning, Board member responsible for Decorative Paints (photo)
Tex Gunning
Board member responsible for Decorative Paints

“Armed with a new global strategy, we can confidently move forward and reap the rewards of our stronger, more focused organization.”

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