AkzoNobel’s new plant at Prudhoe,
Northumberland, on which construction
work will start later this year for a scheduled opening in 2014, will replace an existing plant at the site and another at
Slough, west of London. Both supply the
UK decorative market, one of AkzoNobel’s biggest in Europe.
The objective is to raise supply chain
effectiveness, reduce working capital and
accelerate responses to changes in the
market the company said. The investment
represents “a step change in the way we
do business,” said Guy Williams, AkzoNobel’s UK country director.
The facility will consume 60 percent
less energy compared with the existing
plants’ performance, while its range of
technologies will include recycling and
reuse of waste and water. It will cut in half
the environmental footprint of the UK
decorative business of the company.
AkzoNobel hopes that the efficiency of
the new facility will contribute to reaching its medium terms target of an EBITDA
margin of 13-15 percent in the medium-term, despite expected sluggish demand in
Europe. In the first quarter European decorative sales rose only by two percent
while dropping in volume terms. The decorative paints business returned an
EBITDA margin of only 6.1 percent, half
that recorded by performance coatings, its
other paints business.
Meanwhile Europe’s retail chains are
also endeavouring to push up their own
margins by gaining more control over their
supply chains, particularly by doing more
business directly with paint and other manufacturers rather than through wholesalers.
Concentration of production by paint
and other suppliers in single plants makes
direct sourcing easier. New centralized
plants in Europe are often distributing
their products across national borders
which gives more scope for international
retailers to buy directly from producers.
Greater efficiency in supplies can also
be achieved by retailers through exploiting opportunities given by own brands.
At the same time retailers are also try-
ing to create closer ties with their own
customers by offering more advice and
training to consumers and professionals.
These initiatives can often clash with ef-
forts by decorative paint companies to es-
tablish links with their customers.
www.coatingsworld.com
Coatings World | 27
