Coatings World - July 2008

AkzoNobel
Sales: $13.4 billion
Bigger, stronger,
more focused
Company Facts:

Akzo Nobel N.V.
Strawinskylaan 2555, P.O. Box 75730, 1070 AS
Amsterdam, the Netherlands
Tel: ( 31) 20 502 7555; Fax: ( 31) 20 502 7666
www.akzonobel.com

• 2007 SALES REVENUE: $13.4 billion (2006 SALES: $7.8 billion)

• KEY PERSONNEL: Hans Wijers, CEO and board member responsible for coatings; Rinus Rooseboom, decorative coatings general manager; Bob Taylor, industrial finishes general manager; Rob Molenaar, powder coatings general manager; Bill McPherson, marine and protective coatings general manager; Jim Rees, car refinishes general manager

• MAJOR PRODUCTS: The portfolio includes decorative paints; products for industrial applications including powder and specialty coatings; car refinishes; marine, protective and aerospace coatings; and coatings-related products such as wood and building adhesives.

• 2007 ACQUISITIONS: Ceilcote business from German-based KCH Group; Chemcraft Holdings Corporation in the U.S.; UK-based Imperial Chemical Industries (ICI).

To say 2007 was an eventful year for AkzoNobel is an understatement. Active on all fronts, it truly was a transformative year for the coatings giant.

First the company announced that it would be relocating its head office from Arnhem in the Netherlands to the Dutch capital, Amsterdam, in summer 2007.

Next, it divested its pharmaceutical activities, Organon BioSciences, to Schering-Plough and acquired Imperial Chemical Industries (ICI) to create one of the world’s foremost industrial companies.

During the year AkzoNobel continued its march into emerging makets as well. Particlulay bullish on China, the company opened a decorative coatings facility in Langfang and Hans Wijers, CEO and chairman, announced new strategic targets for China including a revenue target of $2 billion by 2012.

Late in the year, it also finalized plans for new segments of the company effective in 2008. The integrated organization was set up to operate in three business areas—Decorative Paints, Performance Coatings and Specialty Chemicals.

Early in 2008, the company also launched a new corporate brand— Tomorrow’s Answers Today—along with a new logo.

ACQUISITION OF ICI

AkzoNobel’s purchase of UK-based ICI was the major headline of the year in the coatings industry and further consolidated Akzo’s position as the world’s largest maker of paint and coatings. Already positioned as the largest global industrial coatings manufacturer, the company now also boasts it is number one in decorative paints as a result of the ICI deal, which gives it ownership of the popular Dulux and Glidden brands of decorative paints among others.

In addition to strengthening its leading position in the coatings industry

with a market share of approximately 15%, the purchase of ICI significantly increases AkzoNobel’s exposure in North America and emerging markets, as well as in decorative coatings.

At the time of the deal, Wijers said, “This gives us a mega-leap of probably ten years in building our position in the emerging markets.” Roughly a third of ICI’s sales came from developing regions.

In addition, Wijers added, “It also gives us a number-two position in the largest coatings market in the world, which is the U.S.”

AkzoNobel purchased ICI for $16.2 billion. Pictured above from left to right is ICI CEO John McAdam and AkzoNobel CEO Hans Wijers.

AkzoNobel bought ICI for approximately $16.2 billion and combined with ICI’s paint sales, boosted its paint and coatings revenue in 2007 to $13.4 billion from $7.8 billion the previous year (figures do not include the company’s specialty chemicals operations).

The Decorative Paints business unit—includes Decorative Europe, Decorative Americas and Decorative Asia segments—was respsonbile for for approximately $7.26 billion of the total revenue.