AkzoNobel Performance Coatings

Leif Darner (Board member responsible for Performance Coatings, fourth from left) and the Managing Directors of Performance Coatings (photo)

In 2010 we were able to take advantage of a sharp increase in activity in high growth markets – notably in Asia and particularly in China – in all our market segments. So there has been healthy top line growth across the board, while maintaining profit margins in the target range and further improving the return on investment.

The recovery was particularly good in our more industrial and OEM-related businesses, such as Coil and Powder Coatings, which were hit hard during the recession. Our automotive-related businesses also bounced back, while Marine and Protective Coatings experienced flatter market conditions.

During the first half of 2010, our businesses were aided by relatively stable raw material prices. But as the year progressed, prices went up and shortages became an issue. However, we were able to maintain supplies to our customers and gradually compensated for the increases through careful margin management.

As most of our end markets continue to recover – and with a portfolio strategically aligned to create a better balance in terms of technologies and markets, size and complexity – the focus is now very much on growth, which includes capturing market share in high growth regions. We have identified clear opportunities and are looking to accelerate in the world’s high growth regions. Notable highlights during 2010 which signaled our clear intention to continue growing our business were the opening of a new Powder Coatings plant in Wuhan, China, and important acquisitions within both Powder and Industrial Coatings and Car Refinishes. Acquiring Changzhou Prime Automotive Paint Co. Ltd in China has opened up the Chinese mid-market for refinish products, while the deal to secure the former Rohm & Haas powder activities from the Dow Chemical Company has given us access to some exciting technology for wood and plastic applications and boosted our product offer to the automotive industry. Meanwhile, the acquisition of Lindgens Metal Decorating Coatings and Inks improved our position in a number of high growth markets, including the Asia Pacific region.

Innovation also remained high on the agenda throughout the year and we made excellent progress in this area. A new worldwide marine testing lab was opened in Singapore, while in the UK we broke ground on a new global fire protection center of excellence. Elsewhere, Wood Finishes and Adhesives started building a new plant in Vietnam and Powder Coatings is establishing a resin polymer lab which is due to open in April 2011. A number of new technologies were also introduced into the marketplace, such as our Vitalure 740 can liner, stickerfix auto repair system and Intershield 803+ cargo hold coating.

There is still underlying uncertainty in the marketplace, but we will continue to invest, adding people, setting up technical service centers, establishing warehousing and distribution and making bolt-on acquisitions where appropriate, in order to support our strategy of capturing accelerated, sustainable growth. This will be combined with a continued focus on operational excellence and rationalization in the mature markets to ensure that we strike the right balance as we move forward.

“As most of our end markets continue to recover, the focus is now very much on growth, which includes capturing market share in high growth regions.”

Leif Darner
Board member responsible for Performance Coatings

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Copyright © 2011 Akzo Nobel N.V.