waterproofing systems and other chemical products but also decorative paints
and architectural and coil coatings.
This is in line with the company’s
policy of linking its expertise in chem-
istry with the tackling of key challenges
like sustainability, which Tilman Krauch,
president of BASF’s construction chemi-
cals division, points out is “a crucial issue
for the construction industry.”
The construction sector, which account-
ed for € 5.2 billion ($6.8 billion) in sales last
year, or approximately 10 percent of total
group revenue, also presents big opportuni-
ties for growth in coatings applications.
The global roll-out of the new brand
has started in Asia. But Master Builders
Solutions is already registered in the
European Union as a trade mark embracing chemicals, paints and coatings and
non-metallic building materials.
BASF currently has a number of
brands for coatings products with the
‘Master’ tag, including some marketed by
the construction chemicals business.
One of these is the industrial coatings and waterproofing range called
Masterseal which is mainly used for the
protection and repair of concrete and masonry structures.
The range was featured on the BASF
stand at the Turkeybuild exhibition in
Istanbul in April as providing solutions for
restoring “the structures and infrastructure of industrial facilities where damage
has been caused by physical, chemical, or
biological means,” says the company.
AkzoNobel is another European coatings and speciality chemicals multinational which has been modifying its strategy
so that it concentrates less on products
per se and more on specific segments.
The company has decided to focus on
four key end-user segments – buildings
and infrastructure, transportation, consumer goods and industrial sectors like
oil and gas.
Of the four, transportation, covering OEM and auto refinishing, marine and aerospace, is a sector in which
AkzoNobel’s sales predominantly comprise coatings. But in the other three
there is a more of an even mix between
coatings and speciality chemicals. For the
company, building and infrastructure is
its biggest segment, representing 43 percent of revenue last year.
The segmentation strategy will provide a basis for improvements in the company’s financial performance, particularly
with returns on sales and investment. It
will help marketing and R&D planning.
“A clear end-user segment focus
provides forward-looking indicators
and direction for our market initiatives
and innovation spend,” Keith Nichols,
AkzoNobel’s chief financial officer, told a
recent analysts meeting.
“This shift in
objective could
lead to long-term
changes in the way
coatings are marketd
and the primacy
they are given in
areas like capital
investement funds.”
The company sees it as being particularly useful in the way it plans its expansion in the high-growth regional markets,
especially in China and the rest of developing Asia.
Out of the company’s three business
areas of decorative paints, performance
coatings and speciality coatings, which last
year accounted for 27 percent, 37 percent
and 36 percent respectively of total revenue of € 15.billion ($19.5 billion), the
new segmented approach would appear to
favour performance coatings and speciality chemicals. Their sales are fairly equally
spread between the four segments.
With transportation, performance
coatings has automotive, aerospace and
marine coatings while speciality chemicals
has chlor-akali derivatives, organic peroxides and metal alkyls. In consumer goods,
the performance business offers powder
and packaging coatings and wood and
plastic finishes and speciality chemicals
provide surfactants, polymers and silicas.
In the industrial sector protective
coatings supplies protective and powder coatings, which can complement the
company’s surface chemicals and speciality polymers. The protective coatings
operation provides to the buildings and
infrastructure segment protective, coil
and powder coatings and wood finishes
while speciality chemicals offers redis-persable powders, cellulosic derivatives
and surfactants.
However, with decorative paints,
buildings and infrastructure is the only
one of the segment it supplies, although
two key parts of it—new build projects
and maintenance, renovation and repair.
Furthermore, decorative paints, whose
restructuring in Europe necessitated an
impairment payment of €2.1 billion in
the third quarter of last year, is under
the greatest pressure to raise its financial
performance. Excluding the recently divested North American decorative paints
operation, the business recorded in 2012
a return on sales of 2.2 percent and a return on investment of 3 percent.
Under the AkzoNobel’s new financial
targets, decorative paints is expected to
achieve by 2015 a returns on sales and investment of 7. 5 percent and 12 percent
respectively. With performance coatings
the targets are 12 percent and 25 percent
respectively against 9. 5 percent 22 percent
last year while with speciality chemicals
they are 12 percent and 15 percent against
9 percent and 14 percent last year.
Underpinning AkzoNobel’s new strategy is a drive toward sustainability across
all customers sectors. “Sustainability is
business (and) business is sustainability.”
said Nichols, explaining that by 2020 approximately 20 percent of the company’s
revenues are expected to come from
downstream eco-premium solutions.
Inevitably when helping customers
meet sustainability objectives is a top priority, multinationals like AkzoNobel and
BASF will want to combine the strengths
of the whole portfolio of their chemicals
and coatings and other products to meet
their objectives. CW
