Performance Coatings

Executive Committee responsible for Performance Coatings (photo)

It was a year of driving performance improvement and we made good progress in implementing our strategy and reducing our cost base. Our focus on performance improvement and differentiated organic growth is showing results and we are on track to deliver on our 2015 operational objectives.

Overall, we experienced slightly improved market conditions during 2014 with variations across segments and regions. Asia and North America showed continued growth, while Europe remained soft and Latin America continued to be challenging.

During the year, we also created a new organization which is far more customer focused, agile and has clearer accountability. We re-engineered our four businesses and 12 sub-business units into a more simplified structure, made up of seven customer centric Strategic Market Units. This new organization came into effect on January 1, 2015.

Significant progress was made in implementing the footprint reductions announced in 2013, resulting in the closure of eight sites. There were also several business highlights during the course of the year, including the opening of three new production sites and the launch of sustainable innovations for customers in marine, packaging, vehicle refinish and powder coatings.

In Marine and Protective Coatings, we introduced a unique methodology to reward the improved fuel efficiency of ships, together with The Gold Standard Foundation. We also launched the shipping industry’s first digital tool enabling operators to accurately assess and predict the risk of hull fouling, depending on routes being traded. Meanwhile, Protective Coatings introduced a mobile maintenance and repair service designed to reduce costs and improve safety for our passive fire protection customers.

In Industrial Coatings, we completed an investment to double the annual production capacity at our packaging coatings site in Songjiang, China, and broke ground on a new R&D facility at the same site. We also launched our pioneering EvCote Water Barrier 3000 coatings technology, which makes paper cold drinks cups fully compostable and recyclable.

In Automotive and Aerospace Coatings, we began operations at our new, state-of-the-art plant in Changzhou, China, and also introduced Sikkens Autoclear 2.0. This is a more sustainable clearcoat for vehicle refinishes which brings greater efficiency to bodyshop processes, while doubling the renewable raw material content. In addition, Honda Motor Europe extended its partnership with AkzoNobel, strengthening the company’s position as one of the preferred suppliers to Honda’s dealerships and approved bodyshops in Europe. Furthermore, we have signed an agreement with Daimler AG that makes us one of the approved suppliers of vehicle refinishes to Daimler dealerships and approved bodyshops worldwide.

In Powder Coatings, an important development was the start of operations at our new plant in Dubai. The facility will significantly increase capacity for customers of Interpon and Resicoat products in the region. We also launched a two-coat, one-bake powder coating system, as well as a bright metallic powder which provides a more sustainable and cost-effective alternative to chrome plating.

During 2014, we once again demonstrated our commitment to the company’s core principles of safety, integrity and sustainability. Particularly noteworthy is our safety performance, which improved significantly, with the total rate of reportable injuries per million hours (TRR) falling to 1.8 from 2.8 in 2013.

As we move into 2015 with a new organization in place, we are well positioned to implement our strategy and deliver leading performance through operational excellence and differentiated organic growth.