13 February 2015 Jotun ... · portfolio. Jotun is currently employing local staff in the sales,...
Transcript of 13 February 2015 Jotun ... · portfolio. Jotun is currently employing local staff in the sales,...
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● Crown Paints invests US$2.5 million in Kigali 2
● BASF receives Excellent Supplier: Leading Technology Award from Shanghai General Motors in China
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● PPG installs electrocoat primer system at Coast Guard Aviation Logistics Centre 3
● AkzoNobel full-year and Q4 2014 results – strong underlying performance 5
● Grace to separate into two industry-leading public companies 7
● Huntsman announces plan to reduce its European titanium dioxide (TiO2) capacity… to begin capacity expansion at Singapore polyetheramines plant
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● A PROFILE OF THE AFRICAN PAINT INDUSTRY 2014 11
Jotun Paints announces significant KES 250 million investment in
Kenya
Jotun, one of the world’s major paint manufacturers, has
announced that it has made a significant investment in
Kenya, with an aim to strengthen its market presence in the
East Africa region. The investment totals to KES 250 million (US$3 million) and will be
utilised to set up regional offices in Nairobi to develop a fully operational warehouse and as
well as recruiting and developing skilled teams for the brand in the country.
Speaking at the launch of the regional office in Nairobi, Mr Peder Bohlin, Vice President
Jotun, Middle East, India & Africa (MEIA), “East Africa is a key emerging market for Jotun.
With this investment in Kenya, the brand is in the midst of strengthening its distribution
network across the region and aims to recruit more dealers and customers to support this
business objective.”
Although the brand was originally set up in Kenya through an agent (Hardware and General
Stores) in 1995, Jotun’s investment now establishes the brand as a legal entity in the
country. Products are being imported from
Jotun facilities located in Egypt
and Dubai, and
CUBE
696 13 February 2015
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CONTENTS
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Jotun will initially focus on offering protective coatings and decorative paints as part of its
portfolio.
Jotun is currently employing local staff in the sales, marketing, financial control and supply
chain departments. Jotun will focus on producing unique products and concepts. “We are
here to grow the overall market by offering customers world class quality products,” says
Ashish.
Source: Jotun, 26 January
East Africa’s
leading paint
manufacturer
Crown Paints has
announced its entry into Rwanda with the
establishment of an ultra-modern paint
showroom in Kigali with a five year plan to
invest about US$2.5million in the country.
Rwanda now becomes the third country
to host Crown Paints’ showrooms in East
Africa as the paint maker also owns five
others in Kenya and one in Tanzania.
According to Crown Paints Group Chief
Executive Officer (CEO) Rakesh Rao, the
company aims to transform the lives of
Rwandese by creating more job
opportunities and contributing to the
country’s economic growth as it also aims
to establish a paint factory in Rwanda.
“We aim to recruit more customers and
equip them with knowledge on our paints
portfolio. There is a boom in the
construction sector in Rwanda and
consumer tastes are changing fast, with
more people using texture and stone
finishes,” said Mr. Rao.
The opening of the showroom in Rwanda
comes after Crown Paints opened a depot
in Kigali six months ago.
According to Mr. Rao the firm has full
confidence in the Rwanda market and
believes it’s the next frontier for its
growth in the coming years. “With the rise
in construction, the Rwanda market has
posed great opportunity for Crown Paints
and we have gained a great level of
stability in a short period. The market
offers a lot of opportunity for quality
paints,” he explained.
The showroom will also serve customers
from the Democratic Republic of Congo
(DRC) and Burundi.
Crown Paints has grown to become a
company with an annual turnover of
US$61.2million and is now producing 2.3
million litres of paint per month.
Crown Paints specialises in decorative
paints, automotive paints, coatings,
adhesives, flooring and niche paint brands
such as Amourcoat, Silicon, Acryline,
Flowcrete amongst others.
Source: Crown Paints, 9 February
Crown Paints
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BASF offers its customers individual coatings solutions as the
automotive industry focuses on sustainable manufacturing
processes. The Coatings division has now been awarded the
“Excellent Supplier 2014: Leading Technology Award” by
Shanghai General Motors Co., Ltd (SGM).
As the only coatings supplier to win the annual award, BASF Shanghai Coatings Co., Ltd.
stood out from around 4,000 SGM suppliers due to its excellent on-site service and leading
technology. “We appreciate our long-term partnership with BASF. We are impressed by
BASF’s timely and efficient on-site service, which supports our business development and
sustainability goal,” said Adam Chang, Senior Manager Purchasing Department, Shanghai
General Motors Company Ltd. “With BASF’s innovative coatings technology, we have
reduced solvent use and volatile organic compound emissions in our painting lines,
achieving a more sustainable car manufacturing process.”
Since 1998, BASF has been a reliable partner to SGM supplying a full range of automotive
coating products, including waterborne coatings and CathoGuard® 800 e-coat. The latest e-
coat product line CathoGuard® 800 does not contain tin and is recognised for its low solvent
content.
“We are thrilled to have received this annual award. Our account management team,
technical team and on-site service team always work closely with our customers to ensure
the best operation and performance of our products,” said Dr. Thierry Herning, General
Manager, BASF Shanghai Coatings Co., Ltd.
BASF Shanghai Coatings Co., Ltd. is a joint venture between BASF Group and Shanghai Huayi
Fine Chemical Co., Ltd., with more than 17 years of successful partnership.
Source: BASF, 9 February
PPG Industries’
aerospace coatings
group has installed
the first commercial
system in the US for
application of its aerospace electrocoat (e-
coat) primer to aircraft parts at the US
Coast Guard Aviation Logistics Center,
Elizabeth City, North Carolina. The
Aviation Logistics Center has reduced
primer application and processing time
from hours to minutes and full cure time
from days to an hour with AEROCRON™
electrocoat primer.
Primers afford corrosion resistance to
metal parts and enhance topcoat
BASF
PPG
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adhesion. Traditional primer is spray-
applied, creating overspray and
nonuniform film thicknesses that result in
lower application efficiencies and higher
coating weight. In the electrocoating
process, metal aircraft parts are immersed
into the Aerocron primer bath and then an
electrical charge is applied. The primer is
attracted to the charged part, resulting in
uniform film thickness over the part, even
in recessed and hidden areas. The water-
based, chromate-free electrocoat primer
produces near-zero waste and affords
significant weight savings.
“This is a major step for the US Coast
Guard as a trailblazer in this needle-
moving technology within the aerospace
industry,” said Duane Utter, PPG global
Segment Manager, military aerospace
coatings and defence products. “We
appreciate their confidence in PPG and
will work with them to ensure their
continued success. They have processed
many parts successfully and are exploring
opportunities for additional e-coat
applications.”
The Coast Guard Aviation Logistics Center
used PPG chromate-containing aerospace
primers and advanced-performance
topcoats when officials asked about PPG’s
electrocoat technology. After successfully
landing a contract, PPG designed a
customised system to meet the Coast
Guard’s process requirements.
“The transition to using the Aerocron e-
coat primer application process is a
tremendous advancement from
traditional spray primer applications and
will greatly help consumers like the US
Coast Guard work toward chromate and
waste reduction initiatives,” said Ed
Mullins, Sales and Market Development
Manager at PPG’s Atlanta application
support centre. “Adoption of this
revolutionary technology occurred quickly
for the US Coast Guard by involving
people who routinely work in the plating
shop at the Elizabeth City Aviation
Logistics Center, which in some ways is
similar to the e-coat process.”
In the e-coat process, after parts are
pretreated, they are dipped into the
Aerocron primer electrocoat bath, rinsed
and thermally cured to achieve final
coating properties. PPG makes the resin
and paste components for Aerocron
primer at its Oak Creek, Wisconsin, and
Springdale, Pennsylvania, coatings plants.
These components are dispersed in water
in a dip tank. The PPG system also
includes an immersion rinse tank and a
spray rinse tank, a cure oven and lab-
related equipment.
Mullins and Robin Peffer, research
associate at the PPG Coatings Innovation
Center in Allison Park, Pennsylvania, were
on-site for a final cleaning and test
operation of the system with water for
the Coast Guard before filling the tank
with primer and monitoring the system.
In addition to this first US Aerocron primer
tank, several pilot and production e-coat
tanks have been installed in Europe for
evaluation and operation by PPG
aerospace coatings customers.
Electrocoating, also called
electrodeposition coating and commonly
referred to as e-coat, uses electrical
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current to apply a coating to a conductive
substrate submerged in a water-based
paint bath. The process can be fully
automated.
Aerocron electrocoat primer is water-
based for low solvent emissions.
Compared with conventional spray
priming, e-coat provides increased
productivity and efficiency, affording
nearly 100-percent material utilisation
and no overspray. Also, the e-coat process
produces minimal waste because it
returns rinses back into the electrocoat
bath. Only the amount of primer needed
is deposited onto the metal surface, which
results in uniform film thickness and
minimises the weight of the finished part.
Aerocron primer is qualified to SAE
International’s Aerospace Material
Specification 3144 for anodic
electrodeposition primer for aircraft
applications.
Source: PPG, 9 February
AkzoNobel has reported positive volume growth and an improvement
in return on sales (ROS) for the full-year 2014. Excluding incidentals,
ROS was 7.5 percent (2013: 6.1 percent).
Operating income excluding incidentals grew 20 percent to €1,072
million (2013: €897 million), reflecting higher benefits from ongoing operational efficiency
programmes and lower restructuring charges, offset by higher adverse incidental items.
Contrary to positive incidental items of €61 million in 2013, mainly related to gain on
divestments, the negative incidental items of €85 million in 2014 relate to provisions for
legacy items, an external fraud suffered by one of its subsidiaries in the US, and project
costs related to a divestment. Net income attributable to shareholders was €546 million
(2013: €724 million which includes exceptional items). Revenue for the full year declined 2
percent, with volume up 1 percent in all Business Areas, more than offset by negative
currency effects and divestments.
CEO Ton Büchner: “For the full year we achieved further improvements in our operational
performance, visible in our return on sales and return on investment levels. The
introduction of several commercial excellence initiatives will help us drive organic growth
going forward. 2014 was challenging, evidenced by negative currency effects, a continued
lack of growth in Europe and a slowdown in some of the Asian and Latin American
economies. During the year, we continued to build a solid foundation and remain on track
to deliver on our 2015 targets.”
AkzoNobel
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“The year was also notable for several key achievements. A major highlight for us in 2014
was the launch of our Human Cities initiative and our partnership with 100 Resilient Cities.
We introduced the first carbon credit methodology for the international shipping industry,
which allows ships to generate income in the form of carbon credits by reducing CO2
emissions. We were also especially pleased to be ranked first on the Dow Jones
Sustainability Index (in the Materials industry group) for the third year in a row.”
Decorative Paints successfully implemented a new operating model in Europe. Volumes for
the full year were up 1 percent with a positive volume development in Asia. Revenue
declined 6 percent compared with 2013 due to divestments, adverse currency effects and
an adverse price/mix effect. Q4 revenue was down 1 percent, mainly driven by the sale of
the German stores, which offset 3 percent revenue growth in Asia and 6 percent revenue
growth in Latin America. Operational results clearly improved.
Performance Coatings continued to profit from operational improvements and successfully
introduced a new organisational structure with fewer management layers. Volumes for the
full year were up 1 percent, mainly from growth in Marine and Protective Coatings and
Powder Coatings. Revenue was flat compared with the previous year due to adverse
currencies. Q4 revenue was up 4 percent on 2013 due to favourable currencies and
price/mix, with 4 percent revenue growth in Powder Coatings and 8 percent revenue
growth in Marine and Protective Coatings.
Specialty Chemicals showed increased volumes and increased its profitability in 2014, the
latter due to significant savings from restructuring programmes. Volumes for the full year
were up 1 percent. Revenue was 1 percent lower due to headwinds such as price pressure in
caustic, unfavourable currency developments during the first half of the year and
interruptions in supply chain and manufacturing. Q4 volume was 1 percent down, due to
production interruptions in Rotterdam and market reactions following the large oil price
reduction, leading to destocking. Q4 revenue was in line with the previous year, with the
adverse impact of volumes and divestments being offset by a favourable currency effect.
Outlook
We anticipate that significant developments in raw material prices, combined with relevant
exchange rate movements and lower growth rates in high growth economies, will principally
determine the dynamics of 2015. The preparations made during 2013 and 2014 will form a
sound basis for further improvements in 2015. AkzoNobel remains on track to achieve its
targets for 2015.
Source: AkzoNobel, 12 February
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W. R. Grace &
Co. has
announced that its Board of Directors has
approved a plan to separate into two
independent, publicly traded companies.
The two companies, to be named prior to
closing, will be “New Grace,” comprised
of Grace’s Catalysts Technologies and
Materials Technologies business segments
(excluding the Darex packaging business),
and “New GCP,” comprised of Grace’s
Construction Products business segment
and the Darex packaging business. The
separation transaction is intended to be a
tax-free spin-off to Grace shareholders for
US federal income tax purposes, and is
expected to be completed in
approximately 12 months.
“Grace has created significant shareholder
value by focusing on our customers,
driving innovation and growth, and
executing a disciplined capital allocation
strategy,” said Fred Festa, Grace Chairman
and Chief Executive Officer. “Our Board
and management team continuously
evaluate strategic options to create value
and, after a comprehensive review,
determined that this separation is in the
best interest of the Company and our
shareholders. The time is right to create
two strong, independent companies that
will benefit from improved strategic focus,
simplified operating structures, and more
efficient capital allocation.”
“We have a world class team of talented
people who have worked hard to
transform Grace into a high performing
company. Those efforts allow us to take
this next important step in our evolution,”
continued Festa. “We’re confident that
both teams will maintain the customer
focus and commitment to growth and
value creation that have been keys to our
success.”
The Company believes that the planned
separation will:
Enhance Strategic Focus: Two
strong, focused operating
companies with industry-leading
market and technology positions,
strong free cash flow and high
returns on invested capital will be
created through this transaction.
Each company will be positioned
to capture its distinct growth
opportunities, focused on its
unique customers, with more
efficient capital allocation and the
scale and cash flow needed for
growth and value creation.
Simplify Operating Structures;
Create Strong Financial Profiles:
Each company presents compelling
growth and margin profiles.
Simplified operating structures will
improve management focus and
allow improved cost productivity
and optimised functional support.
Optimised capital structures will
provide financial flexibility to
pursue organic growth and M&A
opportunities.
Create Distinct Investment
Identities: New Grace and New
GCP will provide unique and
compelling investment
opportunities with different
growth drivers and simpler
Grace
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investor theses. Investors will have
the opportunity to evaluate and
invest in each business based on
its respective financial profile,
performance and prospects.
Two Focused Businesses
New Grace: After the separation, New
Grace will consist of the Company’s
existing Catalysts Technologies business
and its Materials Technologies business
(excluding the Darex packaging business).
The Company expects New Grace to
continue to be a global leader in process
catalysts and speciality silicas. New Grace
will be a high margin, technologically
advanced business focused on growth,
margin expansion and strong cash flow.
With its materials science expertise and
complex manufacturing capabilities, New
Grace will continue to deliver high-value,
differentiated technologies to maintain its
global leadership positions and drive
additional growth and margin expansion.
The business will remain differentiated by
best in class manufacturing, technical
sales and service and R&D.
Post separation, the Company expects
New Grace to have sales of approximately
$1.8 billion (approximately $2.2 billion
including sales from the unconsolidated
ART JV). The Company believes that New
Grace will seek to make strategic bolt-on
acquisitions in its core segments as well as
acquisitions to expand its high margin,
high-performance speciality chemicals
and performance materials portfolio. The
Company expects New Grace’s net
leverage at the time of the spin-off to be
between 2.0x and 2.5x Adjusted EBITDA.
New GCP: The Company expects New GCP
to continue to be a leader in cement and
concrete chemicals, speciality building
materials and can sealants and coatings
with strong brands and positions. New
GCP will aim to leverage its independent
company platform and strong free cash
flow to accelerate growth in its global
construction products segments and to
maintain its segment leadership positions
in can sealants and coatings. New GCP will
have the financial flexibility to grow both
organically and through acquisitions in its
construction products business.
Including Darex in the new company
provides significant value to New GCP,
including higher and more stable cash
flows and margins. The businesses also
share many integrated manufacturing
sites around the world, providing strong
operating leverage. With Darex, New GCP
can support higher financial leverage,
giving it additional resources to pursue its
growth objectives.
Post separation, the Company expects
New GCP to have sales of approximately
$1.5 billion. The Company expects New
GCP’s net leverage at the time of the spin-
off to be between 3.0x and 3.5x Adjusted
EBITDA.
Experienced and Proven Leadership
Upon completion of the transaction, New
Grace will continue to be led by Fred
Festa, Chairman and Chief Executive
Officer, and Hudson La Force, Senior Vice
President and Chief Financial Officer.
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Greg Poling, currently President and Chief
Operating Officer of Grace, will lead New
GCP as President and Chief Executive
Officer.
Source: Grace, 5 February
Huntsman Corporation has announced a plan to reduce its
TiO2 capacity by approximately 100kt, representing 13% of
Huntsman’s European TiO2 capacity. The plan will generate
approximately $35 million of annual savings. Having looked at different options Huntsman
proposes to close specific operations at its Calais, France site. Huntsman plans to close the
‘black end’ manufacturing operations and ancillary activities during 2015. The ‘black end’ is
responsible for the start of the titanium dioxide manufacturing process. The ‘white end’ is
used to finish and pack TiO2 and will remain operational employing up to 100 people on the
site.
Peter R. Huntsman, President and CEO of Huntsman Corporation, commented: “With the
recent deterioration in industry conditions we have reviewed our manufacturing network in
terms of cost and potential. We are confident that by rationalising our capacity we can
continue to meet our customer’s needs and improve our competitiveness as we create a
market leading Pigments and Additives business.”
This announcement is in addition to the plan announced in December 2014. Annual cost
savings from that plan are expected to be approximately $130 million and will be achieved
by the middle of 2016.
Other Huntsman news
Huntsman Corporation has announced it will begin construction on a 25,000-tonne capacity
expansion programme at its world-scale polyetheramine facility in Singapore in the first half
of 2015, taking total capacity to 50,000 tonnes.
Huntsman is investing $100 million for this latest expansion at its Jurong Island facility,
which will also include backward integration to produce polyethers from locally sourced
feedstocks. This project is intended to help the company meet growing global demand for
polyetheramines and to strengthen its leadership position in this technology.
Construction of the new facilities is expected to be completed in the second half of 2016.
“We expect demand for our amines products to increase across all regions over the next
decade, particularly in Asia-Pacific – where volume is set to grow by at least 10 percent per
year,” noted Huntsman President and CEO, Peter R. Huntsman.
Huntsman
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“Combined with our other existing polyetheramine manufacturing facilities in Conroe,
Texas, and Llanelli, Wales, the expansion at our Jurong site will help us respond more
quickly to customer demand, not only in the rapidly growing Asia market, but also around
the globe,” Stu Monteith, President of Huntsman’s Performance Products division added.
Polyetheramines are used as ingredients to improve the properties of many products,
including paint, adhesives and composites. They can be found in everything from home
decoration products, sports equipment, cars, construction materials, washing powders and
speciality plastics.
Source: Huntsman, 12 February and 4 February
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A PROFILE OF THE AFRICAN PAINT INDUSTRY
IRL is pleased to announce the launch of a new edition of its regional title A Profile of the
African Paint Industry. This fully updated report provides market data for 2013 and
forecasts for 2018, and gives an overview of the paint industry trends across 20 countries
in the region.
The total market for paints and coatings in the African continent was over 1.4 million tonnes in 2013. This could reach a total of 1.7 million tonnes by 2018 provided an annual growth rate of 4.0% is attained.
The architectural and decorative coatings for consumer and professional users correspond to a staggering 83.4% of the total demand for paints. This is also one of the fastest expanding segments due to the growing amount of construction activity. With the emergence of a middle class and the improving purchasing power of consumers, the quality of paints is also evolving. In addition, anti-bacterial decorative paints are entering the market and have been used on the interior walls of public buildings such as schools and hospitals.
The use of industrial coatings remains limited in Africa. Industrial wood coatings together with general industrial coatings are the main industrial coatings employed. The higher performing protective, marine and automotive coatings are scarcely used due to the small-scale oil, marine and vehicle production industries in the region. There is much interest centred on powder coatings due to their higher levels of protection.
On a country-by country basis, South Africa stands out as the largest paint consumer in the region, closely followed by Egypt. However, South Africa’s per capita paint consumption (5.6 kg/head) is almost double that of Egypt (2.9 kg/head). Although South Africa’s economy contracted during the global financial crisis, it has now recovered but growth has since slowed down. The demand for paints and coatings has followed the same fate, showing the lowest growth rate in the region (CAGR 2.5%) over the forecast period. In contrast, the demands for paints in Mozambique (CAGR 7.4%), Libya (CAGR 7.1%) and Ethiopia (CAGR 6.7%) are showing the fastest expected growth rates, which is unsurprising given the low overall paint consumption levels and the increased investments in the countries in question.
83%
17%
African Paints & Coatings Market by Segment, 2013 Total Market: 1.4 million tonnes
Architectural Industrial
NEW FROM IRL
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‘A Profile of the African Paint Industry’ gives an insight into the market changes in the past few years, as well as outlining the key trends affecting the decorative and industrial coatings segments for each individual country covered.
For more information on this and our other reports, please contact Cathy Galbraith at: [email protected]
19%
18%
14% 10%
9%
6%
24%
African Paints & Coatings Market by Country, 2013 Total Market: 1.4 million tonnes
South Africa
Egypt
Algeria
Morocco
Nigeria
Tunisia
Rest
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