Coatings World - March 2016

Coatings World: How did the market for
paints and coatings fare overall in 2015?

Ton Büchner: 2015, even though market conditions were challenging, was the year in which we successfully delivered our

2015 financial targets.

For our Decorative Paints business, we made significant progress and have the right strategy in place to continue the momentum we have built up. ROS was up 8. 6 percent, ROI was up 11. 7 percent and RD&I investments have resulted in 28 percent of revenue derived from eco-premium solutions with customer benefits. In addition, we saw a 4 percent decrease of CO2(e) per ton of sales from 2012 cradle-to-grave carbon footprint.

For our Performance Coatings business, we delivered a step change in profitability and positioned ourselves for profitable organic growth. ROS was up 13. 3 percent, ROI was up 29. 4 percent and RD&I investments have resulted in 15 percent of revenue derived from eco-premium solutions with customer benefits.

John Falder: Generally good but some of it at the expense of
the key suppliers to our industry. The current and we are told
unsustainable pricing of raw materials such as titanium dioxide
is not healthy. The price of oil and its derivatives are similarly
in a peculiar position Yes the short term gains are welcome but
we need our suppliers to invest too. HMG’s approach is that
our supply chain is vital part of our business. We see the world
market as fragile. HMG is tiny in global terms but even at our
scale affected by the confidence of the market overall.

Markus Kamieth: About 80 percent of BASF’s global Coatings sales relate to the automotive sector. The automotive industry developed very heterogeneously in 2015. While especially North America and Western Europe showed robust growth, other markets such as South America and Russia saw steep declines. Automotive production in China as the most important growth market did not live up to our expectations, but we have again managed to outgrow the market based on new innovative Coatings systems and by opening our new production facilities.

Michael McGarry: In 2015, our customers have placed continuing emphasis on the true value that coatings bring to them and their products in the form of protecting and beautifying their assets.

Abhijit Roy: We operate in the Indian subcontinent with operations in India, Bangladesh and Nepal and also have a presence in Poland and Russia. The Indian sub-continent fared

Coatings World’s CEO Forum features executives from seven coatings companies offering their insights on the industry. This year’s forum includes CEOs from two smaller niche coatings companies - UK-based HMG Paints and Argentina-based Sinteplast. The participants are Ton Büchner, CEO and chairman of the board of management and the executive committee of AkzoNobel; John Falder, CEO of HMG Paints; Markus Kamieth, CEO, BASF Coatings; Michael McGarry, chairman and CEO, PPG Industries; Abhijit Roy, managing director and CEO, Berger Paints India Ltd.; Charles W. Shaver, chairman and CEO of Axalta Coating Systems; and Claudio Rodriguez, CEO, Sinteplast.