AkzoNobel’s Decorative Paints activities in the Americas experienced mixed fortunes as the industry attempted to pull clear of the lingering impact of the economic downturn. The US business continued to face depressed conditions as any sign of recovery failed to materialize, while in Canada, stimulus initiatives such as the government infrastructure program helped generate more demand, notably during the first quarter. Conditions were more buoyant in Latin America, where the Coral brand in Brazil outgrew the market and the businesses in Argentina and Uruguay both achieved double digit growth.
US paint market volume continued to decline throughout the year. Home sales, unemployment, sluggish GDP figures and lack of consumer confidence all contributed to the economic slide. Raw material supplies were also disrupted, which impacted financial performance. This shortage of raw materials also affected the Canadian business, which saw demand levels fall in the second half of the year as economic growth slowed. As a result, volumes were flat in a market which showed slight overall improvement. The slow US recovery is also impacting Canada’s economy, which relies heavily on exports to the US. In Latin America, however, the recession failed to dent the business’ continued growth, which was significantly boosted in Brazil by the Coral brand’s Tudo de Cor Para Você (All the Colors For You) program. The initiative – which involves painting deprived neighborhoods in order to add color to people’s lives – is gaining major momentum and has helped propel Coral to unequalled heights.
September’s announcement that AkzoNobel has become the primary paint supplier to Walmart was one of 2010’s major highlights in the Americas. We are supplying multiple brands to Walmart’s 3,500-plus stores in the US. The Glidden Professional brand was also formally launched nationwide in the US in Q2. In Canada, our Montreal Distribution Center obtained Silver LEED (Leadership in Energy and Environmental Design) certification from the Canadian Green Building Council. A number of new VOC compliant products were also introduced, ahead of new Canadian VOC regulations which came into effect in September. The most significant highlight in Latin America centered on the continued success of the Tudo de Cor Para Você program, which has now been rolled out to trade partners. By year-end, a total of more than 600 local painting events had been staged, benefiting 300,000 families. The initiative, which includes the participation of employees, also involves training local people to become painters, further boosting engagement with the company and the Coral brand.
After being relaunched in 2009, the Glidden brand has seen year-on-year market share growth, while household penetration and repeat purchases jumped by double digits. Sales of the Ralph Lauren Paint brand in the US Independent Paint Dealer channel increased, while the Flood woodcare brand boosted its presence in large-scale outlets. In Canada, eight new paint stores were opened during the year, Liquid Nails was introduced in the fourth quarter and supply agreements with two major customers were renewed. The spotlight in Latin America is now falling on Brazil and the forthcoming soccer World Cup (2014) and Olympic Games (2016), which will offer significant opportunities.
Revenue in € millions