The coatings division of Kemira of Finland recorded 11%
growth in sales in 2007 to €652 million ($965 million),
mainly due to its expansion in Russia and other countries
of the former Soviet Union. Operating profit rose 15% €66
million after excluding non-recurring item to give a return
on capital employed of 24%, almost three times higher than
three years ago.
Teknos Group, another Finnish coatings company mainly producing industrial coatings, also pointed to brisk
growth in exports sales in Russia and elsewhere in
Eastern Europe as a key driver behind an eight percent
revenue rise last year with a doubling in operating profit.
Akzo Nobel, Europe’s largest paint producer, reported
“significant” growth in sales of industrial coatings in
Russia and the rest of Eastern Europe in 2007, as well as
in Asia. Growth in its decorative coatings sales mainly
came from Eastern Europe and Asia as well. The company’s coatings sales went up by five percent last year to $6.5
billion while earnings before interest, tax, depreciation
and amortisation (EBITDA) rose by 12% to €737 million.
Paint sales at ICI, whose takeover by Akzo Nobel was
completed in early January, increased by only three percent last year mainly because of a fall in demand for decorative coatings in the U.S. in the second half. But this
drop was partly offset by rising demand in emerging markets. ICI’s decorative sales in China during the year
increased by 21% and by 13% in Latin America.
Coatings companies heavily involved in marine and protective coatings recorded relatively big rises in sales and
profits last year due to vigorous demand both in Europe
and Asia. Those supplying oil and gas producers were able
to take advantage of steep rises in capital investment in
the energy sector due to soaring crude oil prices.
In preliminary figures for last year, Jotun of Norway,
whose main outlet is shipbuilding and oil and gas projects, reported a 25% rise in operating profit in 2007.
EUROPE
“Last year was an absolute high point for Jotun with the
best sales and profits in Jotun’s history,” said Morten
Fon, the company’s president and chief executive.
In the Middle East and Southeast Asia Jotun’s revenue
went up by 18%, while it has been making inroads into
the Chinese market. In January it signed a contract for
coatings supplies for 80 vessels to be built at Dayang
Shipyard on China’s Yangste River.
Hempel of Denmark, which is also mainly active in
marine and protective coatings, pushed up its operating
profit by 57% to €96 million on a 19% sales increase to
€927 million. Over half of the company’s sales were generated in U.S. dollar-based markets which reduced sales
growth by six percentage points.
For the second successive year it recorded growth in
sales of protective coatings of approximately 30% derived
from rising demand both in Europe and Asia.
“In 2007 we improved efficiency and professionalism
across the company and we managed this despite the weakening U.S. dollar and raw material prices that remained
high,” said Pierre-Yves Jullien, Hempel’s chief executive.
With currency fluctuations and macroeconomic trends,
particularly in North America, raw materials costs are at
present the major concerns among European coatings
companies. Akzo Nobel said they will contribute to a
“testing environment” during 2008.
Nevertheless raw material prices are expected to be
less volatile. Prices of methanol, a key base chemicals for
resins, have been dropping from their peak in 2007.
Excess supplies in Europe have been putting downward
pressure on titanium dioxide pric
2008 will be a difficult year for many European coatings producers. But few believe that it will divert them
from fulfilling their objective of consistent increases in
sales and profits, although the rises this year are likely
to moderate compared to those of 2007. CW
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day at BYK Additives & Instruments. For our customers, that
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