Dutch paints and coatings maker AkzoNobel successfully completed the dual-track process for the separation of specialty chemicals. The company is to sell specialty chemicals to the Carlyle Group and GIC for €10.1 billion, AkzoNoble said in its Q1 2018 result. “We delivered a key milestone in creating two focused, high performing businesses with the agreement to sell Specialty Chemicals to the Carlyle Group and GIC for €10.1 billion. We are ramping up our pricing initiatives and have implemented various cost discipline measures to deal with higher raw material prices. Initial savings from creating a fit-for-purpose organization are also being realized. The transformation is gaining momentum and we are on track for delivering 15% return on sales by 2020,” Thierry Vanlancker, CEO, Akzo Nobel, said.
Commenting on the paints and coatings outlook, he said that higher raw material costs and adverse effects from foreign currencies are projected to continue in 2018, especially during the start of the year. “We anticipate ongoing positive developments for Decorative Paints in all regions, particularly Asia. Trends for Performance Coatings are expected to be positive for most segments and regions, while still challenging for Marine and Protective Coatings. We continue to implement various measures to mitigate current market challenges, including increased selling prices and cost discipline. Our "Winning together: 15 by 20" strategy will create a focused Paint and Coatings company and deliver our 2020 guidance,” he added.
Meanwhile, AkzoNobel has reinforced its commitment to customers in India, following the inauguration of a new €9 million facility in Mumbai for the production of Powder Coatings. The performance of the specialty chemicals was good despite revenue was 3 per cent lower (up 4 per cent excluding currency impact) with positive pricing impact being more than offset by adverse currencies and lower volumes. “Industrial Chemicals benefited from strong pricing. Volumes were down 1 per cent, with lower volumes in some segments, partly offset by volume growth in Pulp and Performance Chemicals,” the release said.
The company announced an investment of more than €12 million to expand capacity at Los Reyes, Mexico, for organic peroxides, which are used in the manufacture of a wide range of polymers. Also, a new state-of-the-art chlor-alkali joint venture plant with Evonik was inaugurated at Ibbenbüren, Germany. AkzoNobel Specialty Chemicals will receive chlorine and hydrogen from the facility. Moreover, AkzoNobel Specialty Chemicals announced collaboration with Gasunie to study conversion of water into green hydrogen using sustainable power, and joined a partnership in Sweden to explore opportunities for both green hydrogen and “electrofuels”.