Note 10: Property, plant and equipment
In € millions |
Buildings and land |
Plant equipment and machinery |
Other equipment |
Construction in progress and prepayments on projects |
Assets |
Total |
|
|
|
|
|
|
|
Balance at January 1, 2016 |
|
|
|
|
|
|
Cost of acquisition |
2,403 |
6,670 |
999 |
863 |
66 |
11,001 |
Accumulated depreciation/impairment |
(1,257) |
(4,851) |
(757) |
(74) |
(59) |
(6,998) |
Carrying value |
1,146 |
1,819 |
242 |
789 |
7 |
4,003 |
|
|
|
|
|
|
|
Movements in 2016 |
|
|
|
|
|
|
Acquisitions |
6 |
44 |
– |
– |
– |
50 |
Divestments |
(12) |
(3) |
(3) |
(1) |
– |
(19) |
Capital expenditures |
31 |
99 |
36 |
468 |
– |
634 |
Transfer between categories |
80 |
207 |
46 |
(333) |
– |
– |
Depreciation |
(74) |
(326) |
(81) |
– |
(1) |
(482) |
Impairments |
(7) |
(6) |
(3) |
(3) |
– |
(19) |
Other |
– |
28 |
– |
– |
– |
28 |
Changes in exchange rates |
15 |
16 |
(4) |
(32) |
– |
(5) |
Total movements |
39 |
59 |
(9) |
99 |
(1) |
187 |
|
|
|
|
|
|
|
Balance at December 31, 2016 |
|
|
|
|
|
|
Cost of acquisition |
2,529 |
6,987 |
1,052 |
976 |
57 |
11,601 |
Accumulated depreciation/impairment |
(1,344) |
(5,109) |
(819) |
(88) |
(51) |
(7,411) |
Carrying value at December 31, 2016 |
1,185 |
1,878 |
233 |
888 |
6 |
4,190 |
|
|
|
|
|
|
|
Movements in 2017 |
|
|
|
|
|
|
Acquisitions |
9 |
2 |
– |
– |
– |
11 |
Divestments |
(11) |
(4) |
(2) |
– |
(3) |
(20) |
Capital expenditures |
39 |
215 |
51 |
307 |
1 |
613 |
Transfer between categories |
147 |
446 |
76 |
(669) |
– |
– |
Depreciation |
(75) |
(335) |
(75) |
– |
(1) |
(486) |
Impairments, including reversals |
3 |
(1) |
2 |
(4) |
– |
– |
Classified as held for sale |
(434) |
(1,472) |
(64) |
(295) |
(1) |
(2,266) |
Other |
2 |
1 |
1 |
– |
– |
4 |
Changes in exchange rates |
(66) |
(102) |
(10) |
(36) |
– |
(214) |
Total movements |
(386) |
(1,250) |
(21) |
(697) |
(4) |
(2,358) |
|
|
|
|
|
|
|
Balance at December 31, 2017 |
|
|
|
|
|
|
Cost of acquisition |
1,488 |
1,901 |
925 |
193 |
7 |
4,514 |
Accumulated depreciation/impairment |
(689) |
(1,273) |
(713) |
(2) |
(5) |
(2,682) |
Carrying value at December 31, 2017 |
799 |
628 |
212 |
191 |
2 |
1,832 |
Capital expenditures
- In Decorative Paints, we invested in increased asset integrity in both growth and mature markets, while continuing to invest in selected growth projects, such as the Ashington (UK) state-of-art paint factory, officially inaugurated in September 2017, and the Langfang plant in China
- In Performance Coatings, we invested heavily in capacity increase in emerging markets, and more moderately in mature markets. One example is the opening of the Changzhou powder coatings production facility in China, aimed at strengthening our leading position in North Asia; while continuing to invest in our new Powder Coatings site in Thane, India. Additionally, several efficiency improvement projects were carried out mostly in Europe
- In Specialty Chemicals, we invested in several asset integrity and efficiency improvement projects while continuing to invest in growth projects for specific segments, such as increasing capacity of Expancel production in Sweden and building a world-scale plant for monochloroacetic acid (MCA) as part of a joint arrangement with Atul in India. In 2017, we completed the expansion of our production in Mariager, Denmark, which supplies pharmaceutical-grade salt to the healthcare industry, increased capacity for sodium hydrosulfide (NASH) production in LeMoyne, US, initiated production of organic peroxides in Los Reyes, Mexico, and completed the plant expansion in Boxing, China
Impairments
In 2017, several small impairments and reversal of impairments were recognized, spread over all businesses. The impairments recognized in 2016, were mainly related to assets of Performance Coatings.
Financial lease
The carrying value of the property, plant and equipment financed by hire purchase and leasing and not legally owned by the company was €33 million (2016: €63 million) of which €32 million is related to Buildings and land.
In 2017, we entered into new financial leases of €5 million, which were reported in the line Other.
Mature markets are comprised of Western Europe, the US, Canada, Japan and Oceania.