AkzoNobel tightens grip on regional market despite economic recession

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Báo Đầu Tư English - 30 month(s) ago 19 readings

AkzoNobel tightens grip on regional market despite economic recession

AkzoNobel has announced the completion of a major phase in its ongoing plant expansion in Vietnam which will add momentum to the continued growth of the company’s Decorative Paints business in South East Asia.


The firm has the products to continue dominating the market

Around $17.2 million (€13 million) has been invested in the production facility in Binh Duong province in order to optimize operations and help meet growing customer demand in the region. AkzoNobel Decorative Paints has been continuously investing in the South East Asia region with several plant expansions.

The plant in My Phuoc Industrial zone, Ben Cat district in Binh Duong province is the latest addition. The Binh Duong plant was built in September 2007 with an initial investment of $10.5 million (€8 million).

“We have more than half of billion people in South East Asia. With emerging economies and populations’ rising incomes, most of them will firstly build up their houses. Hence, this new investment will capture the huge opportunity in the medium term,” said Jeremy Rowe, managing director for AkzoNobel Decorative Paints South East Asia and Pacific.

Last year, the company invested $9.8 million (€7.5 million) in its plant in Jababeka Industrial Estate-Cikarang in Indonesia.

Both plants have cutting-edge technology which leads to high flexibility in the production process through shorter cycle-times. This technology allows a choice of more colours and the new “raw material dosing system” with superior level of accuracy provides better product quality, as well as allowing the team to be faster and more responsive in fulfilling consumer demand.

“Besides the expansion of our capacity and production facilities, the level of energy consumed in the production process also becomes lower. This new technology will reduce energy consumption per litre by 20 per cent and reinforce AkzoNobel’s commitment to sustainability, while at the same time providing better quality in our products,” added Rowe.

Furthermore, thanks to its global performance improvement programme, AkzoNobel Vietnam has doubled the production capacity and increased the speed of packing up to 30 paint cans per minute, from 12 paint cans.

AkzoNobel’s performance improvement programme, launched in October 2011, targets to strengthen competitiveness, enhance the company’s ability, simplify support structures and reduce the cost base.

“Last year was a challenging one for AkzoNobel due to inflation, price increases that affected most raw materials and the continuing economic crisis. But, the company showed performance improvements in South East Asia,” Rowe said.

AkzoNobel Decorative Paints in Asia had total revenue of $1.2 billion (€952 million) in 2011, an increase of 13 per cent from 2010. Its South East Asia business grew faster than the market, cementing its overall number one position in the region, said AkzoNobel.

AkzoNobel Vietnam was a leader in Vietnam market in terms of decorative paint industry due mainly to its famous Dulux brand, according to Asia Paint Industry Council (APIC).
The performance improvement programme also reflects a significant change in the operating model and business culture.

The comprehensive three-year plan designed to improve performance and deliver $660 million (€500 million) in EBITDA (earnings before interest, taxes, depreciation and amortisation) in 2014 is already expected to deliver $264 million (€200 million) EBITDA in 2012, according to AkzoNobel.

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