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AkzoNobel Industrial Finishes

“We are well positioned for the rebound from a structural cost perspective, in terms of our global capacity footprint and the markets we’ve penetrated.”


We entered 2009 under extremely weak market conditions and experienced significant erosion in demand during the year. However, thanks to a global effort to manage costs, focus on working capital and right-size our capacity, we successfully managed a soft landing through the most severe manufacturing downturn in 50 years.


We were able to remain financially sound despite the stressful market conditions and volume pressure. We removed a lot of costs from the business, both in terms of headcount and capacity, resulting in a significant reduction in our structural cost base. Our capacity and cost base have therefore been successfully aligned with the shift in the global economy.


The first indications of the impending recession alerted us at the end of 2007 and it wasn’t until the end of 2009 that the wood markets started to show signs of stabilizing. In many industries, Asia began to recover first, but we experienced a different scenario. The Industrial Finishes business has a heavy wood coatings footprint in Asia which is closely tied to the US market, so our Asian wood business actually remained as depressed as North America due to this link with US housing. It will only recover in a meaningful way once US housing comes back. Coil markets, on the other hand, clearly started to improve during the second half of the year, while the plastics market also began to stabilize.


We reduced headcount and streamlined the number of sites we operate around the world in order to right-size and stabilize the business. This realignment enabled us to remove underutilized capacity in mature markets and manage our capital down, while continuing to focus on technology and strategic investments in high growth markets such as China, India, Vietnam and Russia. We never took our eye off the marketplace and towards the end of the year our results started to improve as we increased our share in new market sectors and gained new customers. As a result, we are well positioned for the rebound from a structural cost perspective, in terms of our global capacity footprint and the markets we’ve penetrated. This means we have the ideal capacity to meet the requirements of an upturn once the economy recovers.


We acquired the Kronospan wood adhesives business in the Czech Republic, Romania and Slovakia and purchased two wood coatings distributors – SABA in Russia and ICLA in Romania. In addition, we fully integrated the US Lord acquisition from 2008 and started driving that floor coatings technology into high growth markets, primarily China. We also started supplying one of the largest domestic furniture manufacturers in China with eco-premium technologies. Our expertise will enable them to convert to UV-curable coatings technology from traditional solvent-based coatings. On the product side, sales of our Cool Chemistry line of coil coatings for metal roofs doubled in the US, despite the depressed market conditions. This was mainly due to the tax credit the US government allowed homeowners who made “green” improvements to their homes. We were also successful with the introduction of a new wood grain finish for coil coatings used to make garage doors. Other notable developments included a further improvement in our excellent safety performance and significant progress in our training and management development.

in € millions
Industrial Finishes – Revenue in € millions (bar chart)
Bob Tayler: Managing Director – Industrial Finishes (photo)
Bob Taylor
Managing Director

Key brand

Industrial Finishes – Key brand (logo)

Main products

  • Wood coatings
  • Wood adhesives and board resins
  • Coil and extrusion coatings
  • Specialty plastics coatings

Key markets

  • Furniture and flooring
  • Consumer electronics such as cell phones and laptops
  • Construction industry
Geo-mix revenue by destination
in %
Industrial Finishes – Geo-mix revenue by destination in % (pie chart)
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