Our Asian business experienced mixed fortunes as market conditions fluctuated between the regions. China posted record profits despite difficult market conditions, while India and South Asia also had a strong year, but the situation was more challenging in South East Asia and Pacific (SEAP). Overall, we made good progress, with the company’s performance improvement program helping to generate significant savings.
To combat the slower economic growth in China, we tightened our cost control and made a number of strategic investments in several areas, including the redecoration market and our mass market product range. This helped to give us some momentum as we achieved significant market share growth and improved overall profitability. In India and South Asia, the business continued to outpace the market, despite subdued trading conditions, particularly in the highly competitive professional segment. Sri Lanka continued to do well with a market share of more than 40 percent. This performance in India and South Asia was led by multiple initiatives, including a 30 percent capacity expansion, productivity improvements and innovative product launches. Strong profitability was also achieved in SEAP, despite challenging market conditions, especially in Vietnam, where a prolonged economic and construction downturn continued. However, Thailand bounced back after last year’s floods, while our mass market Dulux offerings continued to grow strongly across the region.
In China, we opened a number of new stores and strengthened our e-commerce to help increase coverage in the mass distribution channel. We also grew our project channel business by more than 30 percent and launched a campaign to motivate Chinese consumers to redecorate. In line with this, we doubled the size of our Easy Paint Service business, which provides reliable and trained painters to consumers. All AkzoNobel’s offices in Shanghai were consolidated into one, eco-certified building, housing up to 700 employees. We also established a regional HQ in Singapore, bringing together a number of AkzoNobel businesses under one roof. The eco-certified building consolidates our RD&I expertise and provides a base for our new global exterior walls expertise group. In India, we modernized our retail Dulux Decorator Centers and grew well ahead of the competition. We also entered the fast-growing interior regions by expanding our distribution footprint. Our latest loyalty program for contractors – Dulux Colour Guru – leverages mobile technology platforms to build a community of Dulux ambassadors.
In China, we further strengthened our well-being portfolio with the launch of a full non-additive product range. We also activated our Let’s Colour campaign to bring color to disadvantaged communities. Our India and South Asia business won an award for Best Talent Management Organization 2012 at the World HRD Congress. This was welcome recognition and a testimony to the investments being made to grow the capability and skills of our employees. Good progress was also made to reduce waste generation, while the business’ overall CO2 emissions fell 7 percent. Dulux was recognized as the most preferred paint brand by Franchise India, while notable product launches in SEAP included the next generation of our market-leading Weathershield exteriors offering in Indonesia and Vietnam, and our Inspire interior paints for the mass market across the region. In Singapore, Dulux was awarded Superbrand status as the leading decorative paints brand.