VAlSPAr BCF JAPAn

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BASFGerman chemicals giant reports strong first quarter page 3

DSMGlobal growth boosts DSM Performance Materials page 4

Becker Industrial CoatingsSwedish group starts 20�� on strong footing page 4-5

TikkurilaA slow start for the Finnish paint company but Q2&3 expected to be better page 6

JotunNorwegian firm blames rising raw material costs for lower profits page 8

HuntsmanPigments unit trebles profits on higher TiO2 volumes and sales page 10

DuPontFirm plans new TiO2 plant in Mexico page 11

Shortages, prices and speculation

Is business on the way up? Have we peaked? Or, are we actually slipping behind again? Profits are high but jobs

data is still weak and confidence is shaky.In short, it’s hard to call – but

what’s for certain is that energy and raw materials prices are rising rapidly, and that’s uncomfortable, as the latest round of company results reported in this issue of Comet makes abundantly clear.

Who or what is to blame for rising input prices? British Coatings Federation chief executive Tony Mash sees the chemical industry as playing an unfortunate role in the saga, with a many-year failure to invest in capacity inevitably leading to the shortages which we’re seeing now.

A widely-cited explanation is also rising demand from emerging market economies, notably China, India and Brazil, putting pressure on limited global resources.

Mash’s view of the problem bears up to scrutiny. It is certainly hard to dispute the notion that oil companies have not developed new refinery capacity, so while so-called peak oil worries may be impacting the oil futures market, in the shorter term rising demand has opened a supply gap, the problem lying between the refineries and consumers, rather than between the wells and the refineries.

If chemical companies have indeed not been developing new production capacity at a sufficient rate, shortages – and hence rising prices – would necessarily follow in an upturn. For sure, investment in mining and production capacity has probably been negative in the past two or three years; at the very least, existing capacity has been lost to depreciation of the industrial base and not topped up with new investment. In addition, some capacity must have been lost to business failures and retrenchment.

But whether chemical companies are likely to do much about this decrease remains to be seen. A company which anticipates new investment by its rivals – or by new entrants to the market – will invest to keep pace. But a company which reckons its competitive environment is more or less stable will sit tight and enjoy higher prices for whatever output it is able to ship. Given uncertainty over the economic recovery generally, the latter assessment may well be typical.

Another consideration is the huge difference in growth prospects between developed and emerging regions. Chemical suppliers are clearly investing in China, India and Brazil on the apparently reasonable premise that most growth is happening

VAlSPAr JAPAnBCF

IN THIS ISSUE

C o m p a n i e s M a r k e t s E c o n o m i c Tr e n d sCometC O A T I n G S

MAY 2011 . vol 19 . no 5

COATInGS COMETThe Coatings Technology Centre

14 Castle Mews, High Street, Hampton, Middlesex, TW12 2nP

United Kingdom+44 (0) 020 8487 0800

www.pra-world.com

ALSO IN PRINT page 23 STATISTICS page 24 COMPANY INDEX page 26

MARkeTS AND OPeRATING eNvIRONMeNT ADDReSSeD AT ANNuAl CONFeReNCe MARkeTS page 20

CeO ON IMPACT OF RISING RAW MATeRIAl COSTS, SAleS DevelOPMeNTSCOMPANIeS page 7-8

PReDICTeD PAINT DeMAND By SeCTOR FISCAl 20��

STATISTICS page 24

Continued on page 2 ››

www.pra-world.com 2 [email protected]

COATINGS COMeT | MAy 20�� www.pra-world.com/publications

there. North America and europe, on the other hand, are not expected to provide anything like as much growth, and hence can be expected to see little investment in new production capacity.

An interesting example of this geographic disparity comes from TATA, the India-based industrial group. Sales at its Jaguar land Rover division are rocketing, but TATA is worried that rising prices for commodities like steel and rubber might dent its uk luxury cars unit. New steel capacity in the uk or Western europe seems very unlikely to emerge to help JlR hold its prices down.

In any case it may be that the shortages are right back at the mining stage, not the steel fabrication stage. If that’s true, then

there must be some merit in the argument that commodity prices are moving up and up because global demand is rising very fast indeed, thanks to the big emerging economies.

Another possibility altogether is that rising commodity prices can be blamed on speculators. This is always a popular position at that point in the economic cycle when uncertainty gives way to anxiety, and at least in the oil market there is some evidence that dealing, rather than just demand, is at work. One trader is under investigation for actively trying to manipulate prices, and apparently it has been profitable for companies to build huge oil storage tanks, making money by holding stocks for later sale.

But on a market-wide basis over any lengthy period, large-scale speculation that a price will rise must be matched by speculation that it will fall. Much money can in principle be made on speculative trading, but apart from in the short-term it’s hard to see how a permanent upward trend can be set by speculation.

Prices of everything from oil to wheat have been rising for several years, and the recent recession made at best a brief dent in the trend. Best to get used to high and possibly rising prices as being the norm for years to come, and look for ways to counter that trend by increasing productivity, cutting waste and driving top-line sales. ■

OuTlOOk

« Continued from page 1

For further information contact:

Tim Sullivan, Environmental Services, PRA Coatings Technology Centre, 14 Castle Mews, High Street, Hampton, Middlesex, TW12 2NPTelephone: 0208 487 0806, Fax: 0208 487 0801email: [email protected]

www.pra-world.com

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COMPANy NeWS

BASF reports strong first quarterFINANCIAl

BASF overcame strong increases in raw materials costs to deliver a 40% rise in

operating income, before special items, in the first quarter, inspiring the company’s chief executive to predict another record year for earnings.

Jürgen Hambrecht, who retires this month and will be replaced by his chief financial officer kurt Bock, said: “We expect to earn a high premium on our cost of capital once again in 20��.”

Income at the world’s largest chemical maker for the three months to the 3� March rose to €2.7 billion, compared to €�.9 billion in the first quarter of last year. Sales ratcheted up 25% to €�9.4 billion, with a significant contribution from the Cognis business, acquired in December.

Sales volumes and margins continued to improve.

The earthquake off the coast of Japan and its aftermath, as well as the tense political situation in North Africa, did not have a significant impact on BASF business in the first quarter.

However, these events could slow global growth and the potential consequences of supply bottlenecks, such as for electronic components from Japan, could include production outages in some of BASF’s customer industries, in particular in the automotive and electrical industries, as well as in the information and communications industry. even so, Hambrecht was resolutely optimistic about the current year: “We continue to aim to significantly exceed the record 20�0 level in income from operations before special items.”

Demand for products in BASF’s coatings division, which is part of BASF’s Functional Solutions segment, rose in all regions, and sales grew significantly overall - up �3% year-on-year to €672 million. The automotive OeM coatings business, in particular, was very successful. Higher sales volumes were also seen in the automotive refinish coatings and architectural coatings businesses. And even though it was not possible to fully pass on

the sharply increased raw materials costs to sales prices, earnings slightly exceeded the high level of the previous first quarter due to good demand.

In the Functional Solutions segment, there was an overall strong rise in sales volumes and sales. earnings before interest and tax (eBIT), before special items was up 28% in the quarter to €�42 million. Sales to third parties were up 25% to €2.82 billion. Demand from the

automotive industry increased compared with the same quarter of the previous year. As a result of robust construction activity in several emerging markets in Asia, South America and eastern europe, there was a slight recovery in demand from the building sector. Higher precious metal prices boosted sales growth. earnings improved substantially due particularly to the contribution from the catalysts division. ›› page 4

Dr. Kurt Bock (left) succeeds Dr. Jürgen Hambrecht as chairman of the board of executive directors of BASF SE at the conclusion of the Annual Meeting on May 6

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‘‘We expect to earn a high premium on our cost of capital once again in 20��”Jürgen Hambrecht, outgoing ceo of BASF

Improved paint demand helps Clariant’s pigments business

FINANCIAl

Sales increased in all geographic regions. However, sales from coatings and catalysts grew substantially in South America, Africa and the Middle east, due to strong demand from the automotive industry and as a result of higher prices.

ASIA AnD BrAzIlexpanding BASF’s presence in growth markets, especially in Asia, is a key strategy for BASF. Hambrecht says, “Asia will contribute close to two-thirds of future growth, making it the most important engine of growth.” By 2020, BASF aims to generate more than 70% of sales from local production in Asia. It is shooting for sales of €20 billion in Asia by 2020.

Brazil has also become a key target. BASF is exploring opportunities for a new investment in Brazil. Projects under consideration include the production of acrylic acid, butyl acrylate and superabsorbent polymers. It is conducting a feasibility study of a worldscale complex there. ■

In reporting its first quarter financial results, Swiss speciality chemicals firm

Clariant said demand for its pigments had been strong due to underlying demand from decorative coatings, particularly for residential repaint, but also from the automotive industry. The business unit showed a 20% improvement in pre-tax profit, rising to CHF48 million (€39m/$54m) helped by an improved cost structure resulting from



COMPANy NeWS

‹‹ page 3 the completion of restructuring programs carried out in 20�0.

Sales of pigments were �% higher in local currencies than in the previous year period, but down 8% in Swiss francs to CHF259 compared to CHF28� million a year ago. This includes an increase in selling prices to allow for the recovery of raw materials and other input cost inflation.

Clariant said also that demand for pigments used in industrial coatings returned to good levels in the first quarter. In printing, the pigments business moved further away from low profitability applications and continued to focus on the higher margin end of the industry. Demand for pigments and pigment preparations remained at a good level in the Plastics and Special Applications segment. However, the volumes boost

seen in the first quarter in 20�0 due to restocking activities was not repeated this time.

During the course of the quarter, capacity for special Azo pigments was augmented to help with increasing demand of higher value–added products.

Sales in the Industrial & Consumer Specialties business unit rose 7% in local currencies and declined 5% in Swiss francs versus the same period of 20�0 from CHF420 million to CHF400 million. Clariant said demand for chemicals in the construction, paints & coatings, agro-chemicals and lubricants industries remained strong. Pre-tax profit at the unit rose 6% to CHF 68 million compared to CHF 64 million in the same quarter of 20�0, due to an improved mix of products and a better cost structure.

The Swiss firm expects global economic growth to continue in 20��, but at a slower pace than in 20�0. exchange rates for the major currencies are expected to remain volatile and commodity prices are expected to continue to rise, leading to an increase in raw material costs in the mid-teens.

Clariant says growth this year will come mainly from the emerging markets in Asia/Pacific and latin America.

On 2� April, Clariant completed the purchase of 96.�5% of the shares in Süd-Chemie from One equity Partners and the family shareholders. The overall transaction value amounted to approximately 4�.9 billion (CHF 2.5 billion). A public offer to acquire the outstanding shares from Süd-Chemie minority shareholders will be initiated before the end of May 20��. ■

Global growth boosts DSM Performance Materials first quarter

FINANCIAl

DSM’s Performance Materials cluster posted solid sales growth

in the first quarter as a result of ongoing volume growth and pricing strength, demonstrating that the Dutch division was benefiting from continued global growth in relevant end-markets such as automotive, electronics and packaging.

First quarter pre-tax profit at DSM’s performance materials rose 59% to €62 million from €39 million in the prior year quarter as sales climbed 27% to €705 million.

The Dutch company said that in spite of a strong increase in feedstock prices, earnings before interest, tax, depreciation and amortisation (eBITDA) was almost back to pre-crisis levels, although with room for further margin improvement.

In DSM Resins and DSM engineering Plastics volume growth was in double digits and DSM Dyneema increased volumes almost at the same rate. There was also a double digit increase in prices in DSM engineering Plastics and DSM

Resins.All three business groups posted a

better eBITDA compared to the first quarter last year, because of growing sales. The increase in selling prices offset the increased raw material prices. eBITDA margin edged up at �2.9%, compared to �2.7% a year ago.

DSM said high growth economies, especially China, continued to be very strong, while growth in Western europe and North America was moderate. However, monetary and financial instability, reflected in volatile currency exchange rates and inflationary pressures, impacted costs. The increasing input prices were, on average, compensated for by pricing strength.

The events in Japan had very little impact on DSM’s businesses and DSM believes they are likely to have only a limited impact on full-year earnings. unrest in the Middle east has had no impact on DSM’s business, except for the higher oil price causing the prices

for energy and certain raw materials to increase. It intends to pass on these higher costs through further price increases.

DSM expects the trading conditions experienced during the first quarter to continue in the remainder of the year, with strong growth in China and the other high growth economies, together with moderate growth in mature economies. ■

Becker Industrial Coatings starts 2011 on strong footing

FINANCIAl

For Becker Industrial Coatings, vol-umes recovered well in 20�0, although

not to pre-crisis levels. even so, the busi-ness, along with its smaller sister, ColArt artists’ materials, which together form the Beckers Group owned by Sweden’s linden family, saw earnings from continuing businesses rise 63% in 20�0 to Sek 298 million (€33m/$47m). This was ›› page 5



COMPANy NeWS

Becker Industrial CoatingsKEY FIGURES

2010 2009 2008

Net Sales (SEF million) 4,328 4,185 4,391

Investments 85 74 182

Average no. employees 1,686 1,678 1,779

Source: Becker Group

despite restructuring charges and pressure on gross margins from rising raw material costs.

Ralph kabalo, BIC’s chief executive until January of this year, said the compa-ny had pursued targeted austerity meas-ures in order to absorb the market down-turn. However, his refusal to cut back on two critical departments: R&D and sales, helped the business to gain market share, he believes. kabalo, who retired at the end of the year, has handed a strong divi-sion to his successor, Boris Gorella, who previously worked at Degussa/evonik and BASF.

The divestment of the Becker Acroma wood coatings business in September to Sherwin Williams for nearly Sek �.5 billion, resulting in capital gains of Sek 880 million, has put Beckers Group in a very strong, practically debt-free position, able to make strategic investments in the two remaining business areas. Group net profit for the year reached over Sek �.0 billion.

Full-year sales at Beckers Group de-creased 7%, because of the divestment, to Sek 7.56 billion from Sek 8.�7 bil-lion the previous year. Sales at BIC rose to Sek 4.33 billion from Sek 4.�8 billion last time, while sales in the ColArt busi-ness, which continues to face significant cost pressures, declined to Sek �.76 bil-lion from Sek �.87 billion. In response to market conditions, the ColArt business is consolidating its european manufactur-ing, warehousing and commercial opera-

tions starting with the closure of a site in Wealdstone, uk, along with a number of redundancies.

Investments at Beckers Industrial Coatings are planned in South America, China, Central europe and North Amer-ica. Investments are also being made in Russia in order to benefit from an expand-ing coil coatings market there. However, uncertainty about the pace of recovery, particularly in transportation and com-mercial construction, is depressing invest-ment levels in special coatings and coil coatings businesses in some regions.

Major highlights during 20�0 includ-ed coatings for the new football stadium in Durban, South Africa, which hosted the 20�0 World Cup, as well as coatings for the Chinese and Swedish pavilions at the expo 20�0 in Shanghai.

Beckers Consumer Design Finishes has enjoyed strong growth in the personal computer industry and high demand for decorative and protective coatings and finishes for consumer electronics goods. ■

Becker Industrial CoatingsNet sales by market - 2010

Source: Becker Group

Becker Industrial Coatings is pushing for a 7-12% price increase on a range of its products in Europe. The price adjustment tracks the global rise in commodity prices affecting the coil and special coatings industry. Becker says that globally the industry has seen unprecedented price increases of essential raw materials. Propylene, for example, increased 40% between October 2010 and March 2011. Also, TiO2 has risen 50% over the last 12 months.Boris Gorella, Becker Industrial Coatings’ chief executive, says the company has exhausted all options in an effort to avoid price increases. It has already succeeded in partially offsetting rising raw materials prices through internal efficiency measures. Becker Industrial Coatings, which supplies coil coatings and special coatings worldwide, operates on four continents with 19 production sites and employs approximately 1700 people. Last year, the company produced 120 000 tonnes of coatings and sales reached €453 million. ■

Becker Industrial Coatings says it is being forced to raise prices

‹‹ page 4



Higher fixed costs and a higher mar-keting spend contributed to lower

profits in the first three months of 20�� at Tikkurila, leading the Finnish paint com-pany to report an almost �3% decline in first quarter operating profit. Operating profit during the January to end of March period declined from €7.5 million a year ago to €6.5 million this time.

Also putting a drag on early figures was the late onset of Spring in Finland which postponed advanced Summer or-ders, plus a long, cold winter in Russia which delayed the start of the painting season there. Most of the growth that did occur was from industrial and professional customers.

erkki Jarvinen, Tikkurila’s president and chief executive played down the im-portance of the first quarter. He said the most significant portion of the entire year’s revenue and operating profit tends to be generated in the second and third quarters. The upcoming outdoor painting season will have a decisive impact on the overall results of the year, he said.

First quarter revenue rose �2.6% from €��9.4 million in 20�0 to €�34.5 million in 20��, boosted by price increases, which for the most part kept pace with rising raw material costs.

Raw material costs rose sharply dur-ing the first months of the year and avail-ability was “challenging” on occasion, said Jarvinen. He expects these challenges to continue and even “possibly increase” in the next few months and he plans to con-tinue to adjust sales prices.

Slow start for Tikkurila paintsFINANCIAl

COMPANy NeWS

But most revenue and profit is generated in second and third quarters

rUSSIATikkurila said the outlook for Russia’s

economic growth is more positive than before, and the growth of Russia’s total production is projected to increase from 4% last year to 5-6% during the current year. However, high inflation in retail and construction is slowing growth. The ex-

...Tikkurila’s markets

change rate for the ruble remained stable during the first months of the year. In the first quarter, the demand for paints picked up from the previous year. Tikkurila does not believe its share of the Russian market has changed significantly and is approxi-mately �7% by volume.

SWEDEneconomic growth in Sweden is expect-

ed to exceed 4% this year, outperforming the european average. The Swedish krona continued to strengthen during the first months of the year. Demand for paints in-creased compared to last year. Tikkurila’s market share in Sweden is approximately 40%.

FInlAnDGDP grew in Finland in the first few

months of the year and is expected to reach 4% this year. Rising inflation and increasing interest rates, however, will temper real purchasing power. Construc-tion activity has increased and is expected to grow by 5% this year. Also the cubic volume of granted building permits start-ed to grow in February after decreasing in January. The recovery of new building and industrial investments that started last year was reflected in the sales to profes-sionals and metal industry customers.

POlAnDPoland’s GDP grew moderately in

the first months of the year and growth is expected to reach approximately 4% in 20��. Construction activity appears to be increasing in Poland and growth is expected to continue throughout the year. Interest in higher priced and quality prod-ucts appears to be increasing.

Tikkurila expects revenue growth to exceed average GDP growth in Tikkuri-la’s main markets. In spite of anticipated raw material price rises, Tikkurila expects eBIT margin as a percentage of revenue to stay at the same level of 20�0. Tikkuri-la does not believe that suppliers to the paint industry will be able to fully match

increasing demand due to some of the ca-pacity shutdowns carried out during the recession.

Jarvinen says he will focus on securing sufficient raw material supply by extend-ing sourcing alternatives and by adapting the raw material base where possible. ■

Tikkurila’s production capacity ~300 million litres

Source: Tikkurila

Tikkurila - Production and Raw Materials Quick Facts

Production in 7 countries

Local production an advantage during unstable market conditions

Production of waterborne products increasing: ~60% of total, ~70% of decorative paints

~75% of raw materials from western suppliers, in Russia ~50% of raw material from local suppliers

Tikkurila is the leading supplier of decorative paints in Russia sold in over 5,000 retail outlets

~20% of Tikkurila’s sales in Russia come from Big Box channels and this is growing in importance

Production capacity in Russia is ~143 million litres, 48% of the group

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COMPANy NeWS

FINANCIAl

Industrial coatings drive volume growth in second quarter but paint sales volumes remain flat

valspar’s outgoing chief executive has highlighted raw material cost infla-

tion as “the main issue facing valspar and, in fact, the entire coatings industry,” and causing a major drag on earnings margins in the second quarter.

William Mansfield, who in June hands over the ceo office to his chief op-erating officer Gary Hendrickson, said he now expects percentage increases in raw material costs to be in the mid- to high-teens for the year; higher than the low double digit increases he was predicting in February.

However, he insisted the company has no issues with availability of titanium dioxide, adding: “I think others, at least the major paint companies, are fully sup-plied.”

“We have all the supply that we re-quire, but we are managing through the TiO2 situation by doing a range of things including using extenders …. and we have a lot of experience with the China sulphate material in our industrial and consumer business in China and we are using some of that in North America and in europe.”

He went on to say: “Clearly, the com-modity chemical producers are having their day in the sunshine, so to say, so the pricing environment is difficult and that has been compounded by both real and, shall we say, talk of shortages.

“like others, we are trying to find ways to reduce the cost. Prices won’t con-tinue to go up forever, so the question is, when will they break?”

valspar has instigated price rises of its own and says more are on the way. “Se-quentially, we made progress and year-to-date we’ve secured around 6-7% globally in price [increases],” said Mansfield. lori Walker, valspar’s chief financial officer, says they expect to narrow the gap be-tween raw material prices increases and their own by the next quarter, but the gap will not have disappeared.

February to April sales at valspar rose 23.5% compared to the same three

months a year ago, bringing in $992.7 million helped by acquisitions, selling price increases and volume growth in the coatings segment. earnings before inter-est and tax, excluding acquisition and restructuring related charges, at $�07.8 million was essentially flat with year ago pre-tax profits. eBIT-margin in the coat-ings segment declined to �2.4%, down from �4.�% in the second quarter of 20�0, primarily due to the lag between high raw material costs and valspar’s own pricing actions. In the paints segment, eBIT-margin fell to �0.5%, from �7.2% last year, due to raw material costs, an

exceptionally good 20�0 second quarter, and very poor margins at the Wattyl busi-ness.

Mansfield described the second quar-ter results as “quite good” compared to an exceptionally strong second quarter a year ago when government incentive programmes for new homes and appli-ances purchases were in effect and inven-tory replenishment was in full swing due to improving global business conditions. Raw material costs were also stable at that time.

PAInTSvolumes at the paints segment were

flat, excluding the loss of the Walmart business. The acquisition of Australian paint business Wattyl added to sales, while in the uS “very tough weather” meant a slow start to the uS painting season.

However, Mansfield said he was excit-ed about the launch this month in the uS of a new interior paint. valspar Plus is the first paint to be certified asthma and al-

lergy friendly by the Asthma and Allergy Foundation of America and will carry a certification mark on its label. Mansfield said there are approximately 60 million Americans with asthma or allergies.

Two more launches are planned for the next several months. In China, val-spar has been readying to position its own branded paint as a very high quality for-eign brand targeted at high-end residen-tial and commercial construction projects in tier one cities. It will be distributed through a select group of distributors. The initiative is separate from ongoing in-vestment in valspar’s local Huarun paint brand, which is targeting consumers in tier two cities. Mansfield explained that the Huarun brand is not appropriate for high-end residential complexes because these tend to use a foreign brand of paint as part of their marketing. Therefore, val-spar’s foreign competitors in China are Nippon Paint and ICI/AkzoNobel Paint.

elsewhere, valspar is planning a mod-est foray into the uk decorative retail market, which will get underway in the next few months. valspar has traditionally shied away from the european decorative market, not wanting to take on the en-trenched competition there. However, a unique opportunity to trial valspar paints with a large uk retailer has presented it-self, said Mansfield. “The store set will be a totally tinted programme rather that the ready-mix that the uk retailers mostly sell today. In other words, it will look like a uS paint department rather than the presentation that this particular retailer has today. We probably wouldn’t make an acquisition into the european coatings market, but this is a low cost, low risk way to see if this proposition will work.”

GEnErAl InDUSTrIAlvalspar’s coatings segment delivered

double-digit sales growth and a sixth straight quarter of improved year-over-year volume growth. Segments served by valspar that have been doing well include agricultural and off-road, pipe

Valspar, sales rise but margins fall on costs

‘‘Clearly, commodity chemical producers are having their day in the sunshine.”William Mansfield, outgoing ceo of Valspar

›› page 8



BYK-CHEMIE HIrES nEW MDAlbert von Hebel is to succeed Gerd Büscher as managing director of Altana’s BYK-Chemie additives business. Büscher is retiring in May after 20 years’ service with the Altana group. For the last four years, von Hebel has been head of finance at Altana. In his new role, he is responsible for the areas of finance, controlling, purchasing, IT, integrated management systems, and general administration. The 49 year old German-born man studied business economics in Münster and worked for eight years at an auditing and tax advisory company in Düsseldorf. He has been employed in a variety of roles in commercial departments within the Altana group. In 1996 he moved to BYK-Chemie GmbH in Wesel.

IN BRIeF

FOCUS DIY COllAPSES InTO rECEIVErSHIPBritain’s fourth largest do-it-yourself (DIY) chain, Focus, has called in administors from Ernst & Young after failing to recover from the devastating impact of the recession. Stores are continuing to trade while administrators unpick the business and liquidate assets. Many of the stores have been lined up for sale to rival DIY operators, but still more are looking for buyers. The chain has 175 stores throughout England, Scotland and Wales selling decorating and gardening equipment. The business was founded in 1987 by Bill Archer and a former business partner. The business grew through a number of acquisitions, including Do It All in 1998 and Great Mills in 2000. Following these acquisitions, all of the stores were rebranded to the Focus brand. In September 2000, Focus acquired Wickes and then it was sold in February 2005 to the trade merchants Travis Perkins. In July 2007, Focus was sold to US private equity firm Cerberus and Bill Grimsey was appointed chief executive with a new senior management team. Grimsey was made chairman in 2010 and Rob Gladwin became chief executive.

COMPANy NeWS

Jotun blames higher raw material costs for lower profits at the start of the year

and basic infrastructure. Coil and packaging have also shown good rates of growth.

This quarter, valspar began selling container coatings in China, providing water-based coatings to China Marine In-ternational Containers, the world’s larg-est manufacturer of shipping containers. “Our entry into the shipping container sector represents a significant opportunity for the company and we are investing in this business accordingly,” said Mans-field.

ClOSUrESHowever, the ongoing slump in the

uS housing market has led valspar to decide to close two wood coatings facto-ries on the uS west coast. “We still have a large plant on the east coast and other valspar plants that are making wood coat-ings [but] we are taking the cost structure down anticipating that this market won’t recover for a while,” said Mansfield. The problems in the uS housing market also impact furniture and kitchen cabinetry makers supplying the uS from China. valspar sells its wood coatings to large factories in China that manufacture for

the uS. That business is flat, said Mans-field. In contrast, the domestic Chinese wood coatings market is up about 30% this year.

Restructuring at the Australian Wattyl business will be announced next quarter. Mansfield wants to lower the supply-chain structure and close unprofitable and un-derperforming stores. This will allow us to direct investments in new stores and bet-ter locations and raise Wattyl’s profitabil-ity in line with valspar’s historical average over the next five years, he said.

During the quarter, valspar complet-ed the acquisition of Isocoat, a Brazilian-based manufacturer of powder coatings with sales of approximately $34 million in 20�0. The business serves customers in Brazil, Argentina and Columbia. valspar paid a little less than $40 million for the acquisition, Walker revealed. ■

‘‘We probably wouldn’t make an acquisition into the european coatings market”William Mansfield, outgoing ceo of Valspar

Jotun blamed “a highly challenging raw material cost situation” for a fall in

profits in the first four months of 20��, which came despite a �3% increase in operating income.

Pre-tax profit at the Norwegian paint company slid �4% to NOk 386 million, down from NOk 448 million in the same period last year. At the same time, operating income rose to NOk 4.�2 billion, compared to NOk 3.64 billion a year ago, fuelled by strong developments in China and korea.

Jotun’s chief executive, Morton Fon, said he saw “clear signs that global economic growth is regaining momentum, driven by key industrial and emerging economies.” However, he added that “as global growth continues

to boost demand for goods, upward pressure on raw materials prices is likely to persist.”

He expects Jotun’s overall full-year results to be lower than last year, partly because of uncertainty about raw materials, but also because of uncertainty about market developments in different regions. “It remains reasonable to assume that some business areas, such as new building of ships and major construction projects may gradually experience a weaker development,” he said.

Some NOk 245 million was invested in the business in the fourth month period and included new production structure and an upgrade of administration buildings in Norway, factory projects in the uSA, China and Brazil. ■

‹‹ page 7



Henkel adhesives outperform markets

COMPANy NeWS

Eastman’s coatings materials business raises profits in first quarter

Momentive Specialty Chemicals swings to first quarter profit

Henkel’s adhesive technologies busi-ness sector reported a substantial

increase in sales in the first quarter of 20�� achieved by appreciable volume in-creases and price rises. Quarterly sector sales grew by �4% to €�.88 billion.

Adjusted operating profit improved by 22.6% compared to the prior-year quarter to €247 million, even as raw ma-terial costs rose steeply. All regions and businesses within the unit contributed to the positive performance.

The emerging markets added par-ticular momentum, with eastern eu-rope, Africa & the Middle east and Asia registering the highest rates of growth. However, says Henkel, substantial sales growth was also achieved in the mature markets.

Operating profit jumped nearly 32% to €244 million as efficiency measures

and higher selling prices more than offset cost increases and compensated for ris-ing raw material and packaging prices.

Henkel’s chief executive, kasper Rorsted, said: “With intense competi-tion and rising raw material costs, the economic environment will remain chal-lenging.” In response, the business “will need to continue reviewing our struc-tures to ensure our long-term interna-tional competitiveness.”

Henkel has slightly raised its expec-tations for organic sales growth.

“We are confident that we will again outperform our relevant markets in 20�� and now expect an increase in organic sales at the upper end of the 3-5% range. We expect to increase our adjusted eBIT margin to around �3% and to improve adjusted earnings per preferred share by about �0%,” added Rorsted. ■

FINANCIAl

Momentive Specialty Chemicals turned in a net profit of $63 million

in the first quarter of 20��, after losing $7 million a year ago, due to higher volumes and a leaner cost structure.

The former Hexion Specialty Chemicals company also benefited from sharing certain overhead expenses with sister company Momentive Performance Materials, saving the business $4 million in the quarter and contributing to a plan to strip out $�5 million in annual running costs.

Revenue for the quarter climbed $300 million to $�.4 billion from $�.� billion in the 20�0 first quarter.

“Strong performances in our specialty products, including oilfield proppants and versatic acids and derivatives, as well as continued year-over-year gains in our base epoxy resins drove the significant increase in sales and earnings in the first

quarter of 20�� compared to the prior year,” said Craig Morrison, the company’s chairman, president and chief executive.

Morrison said Momentive had gained ground against the rapid rise in raw materials that began late last year and was continuing to price upwards in response to ongoing raw material inflation.

eBITDA-earnings at the epoxy, Phenolic and Coating Resins segment jumped 44% in the quarter to $�52 million on a 28% sales gain to $9�� million. eBITDA-earnings at the Forest Products Resins segment improved by 7% to $45 million on �6% higher sales at $448 million.

In mid-April, Momentive entered into an agreement with PCCR uSA, to sell its North American coatings and composites business. This follows the divestment of Momentive’s inks and adhesive resins business in January 20��. ■

FINANCIAl

FINANCIAl

eastman Chemical said its business unit which provides materials for

coatings, adhesives, speciality polymers and inks, grew earnings and sales in the first quarter of 20��, driven by higher prices and strengthening demand.First quarter operating profit at the unit jumped 5�% to $98 million as sales revenue climbed to $467 million, 25% higher than the first quarter of 20�0. The year ago earnings figure was down about $8 million due to an outage at the company’s Texas manufacturing facility.

The kingsport, Tennessee-headquartered company said higher sales volumes were achieved because of stronger end-use demand in the transportation, industrial and packaging markets, particularly in the uS. eastman raised selling prices in response to higher raw material and energy costs, and tight industry supply.

Jim Rogers, eastman’s chief executive, said he expected the momentum seen in the first quarter to continue into the second quarter and for the full year. The same applies to eastman’s other business units, which include fibres, performance chemicals and intermediates, and plastics.

Company-wide, he is anticipating full-year earnings per share to be slightly higher than $9. However, key variables include whether inflationary pressures negatively impact on global demand and the volatility of raw material and energy costs, particularly the spread between prices for propane and propylene. ■

www.pra-world.com �0 [email protected]


Bayer MaterialScience raises profits

COMPANy NeWS

Bayer MaterialScience (BMS) has re-ported a nearly 50% rise in pre-tax

profit for the first quarter saying it sees significantly higher demand from all its main customer industries so far this year.

Quarterly earnings climbed to €205 million due to higher volumes.

Compared with the 20�0 first quarter, which was still hampered by the global fi-nancial and economic crisis, sales climbed 2�% to €2.69 billion. The strongest growth in absolute terms came from the construction and automotive sectors, as volumes rose in all product groups and regions, with a marked increase in sell-ing prices. The German business said it

was able to offset much of a considerable increase in raw material and energy costs through significantly higher selling prices for its products.

Bayer’s chief executive, Marijn Dekkers, commented: “This growth in sales chiefly resulted from the encourag-ing increase in demand in all the main customer industries.”

Sales at the business unit for raw ma-terials for coatings, adhesives and speci-alities improved by 9.5% year-on-year. The polyurethanes business expanded by �9.3% and high performance plastics grew 22.2 % year-on-year.

The good results at BMS in the first

quarter were in line with Bayer’s expec-tations, and the company expects the economy will continue to recover. Bayer is adjusting its sales forecast for 20��, as it now expects to be able to pass on raw material cost increases to its customers by raising selling prices.

The business plans to raise sales by a high single-digit percentage on a currency and portfolio-adjusted basis and contin-ues to expect the eBITDA before special items will increase at a higher rate than sales. It expects continued growth in sales in the second quarter and an improved eBITDA before special items compared with the first quarter. ■

Huntsman Pigments trebled earnings in the first quarter as the uS

titanium dioxide major profited from higher volumes and selling prices.

volumes rose ��% compared to the year ago quarter due to stronger demand in all regions of the world while selling prices of TiO2 climbed by an average of 25% higher than a year ago. The trend helped push earnings before interest, taxes, depreciation and amortisation (eBITDA) for the three months to the end of March 20�� to $84 million versus $28 million in the first quarter of 20�0.

First quarter revenue at the TiO2 pigments business jumped 35% to $364 million from $269 million in the prior year quarter. Huntsman said average selling prices increased in all regions of the world, primarily as a result of higher raw material costs and stronger overall market demand. The higher selling prices were partially offset by higher manufacturing, selling and general administrative costs. looking ahead, Huntsman is expecting to improve its TiO2 prices further.

The pigments division of the uS chemicals company operates facilities in

Huntsman Pigments trebles profits on higher TiO2 volumes and selling prices

FINANCIAl

seven countries with a combined total manufacturing capacity of approximately 560,000 tonnes of TiO2 pigment per year. The business employs around 2,000 people.

Companywide, the Huntsman group appears to be in better shape than a year ago turning in a first quarter net profit of $62 million in contrast to a net loss of $�72 million in the first quarter of 20�0, while revenue rose 28% to $2.68 billion.

Huntsman’s Advanced Materials division, a major supplier to paints and coatings markets, increased first quarter eBITDA-earnings by �8% to $39 million on 20% higher revenue at $350 million.

Huntsman said it raised average selling prices for specialty components

and base resins primarily in response to higher raw material costs. However, it was forced to lower average selling prices in the formulations business due to competitive market pressure in the wind turbine sector. Sales volumes increased in the Asia-Pacific and european regions while volumes decreased slightly in the Americas, primarily as a result of raw material constraints for base resins.

Peter Huntsman, Huntsman’s president and chief executive, said he was “raising prices and recapturing margin despite the headwind of increased raw material and energy costs,” adding that “underlying demand for our largest businesses continue to improve with the global economic recovery.” ■

Source: Huntsman

Huntsman Pigments End Markets

PRA business publications [email protected]��


COMPANy NeWS

Higher prices and volumes pushed year-over-year first quarter sales at

TOR Minerals up 40%, as tight global supplies of titanium dioxide steered more customers towards the Texas-based pro-ducer.

Sales for the three months to 3� March 20�� rose to $9.6 million compared to $6.9 million a year ago, helping to gener-ate a 22% year-on-year improvement in quarterly net income to $697,000. It was the second highest quarterly profit posted in more than a decade, according to the company’s chief executive, Olaf karasch.

karasch said: “Our titanium dioxide business is benefiting from increasing tightness in the global supply of titanium dioxide. As a result, market interest in re-formulation is high and we have had success in both raising prices and gaining many new global customers.” However, he insisted that higher pricing of its TiO2 products had yet to have a major impact on the company’s profitability, because pricing of its speciality TiO2 products

lags behind commodity TiO2. First quar-ter benefits from increased pricing and sales volumes were more than offset by increased raw material and energy costs and lower fixed cost absorption at the company’s plant in Malaysia, said kara-

sch. Combined with a one-time increase in employee incentive costs, the higher costs resulted in a �.9 percentage point decrease in operating margin.

“Going forward, we expect our pric-ing to catch up and provide a more mean-ingful contribution to year-over-year comparisons,” said karasch. Demand for TiO2 pigments was continuing to grow, he said.

karasch said the TiO2 plant in Malay-

sia was improving, but was still underu-tilised. However, he expects to run the plant for eight to nine months this year in contrast to six months last year. “The increase in utilisation, combined with pricing, should be more than enough to offset increasing raw material and other input costs, and result in a bottom line that grows faster than the top line for the balance of the year,” said karasch.

Business increased at both of TOR’s two product groups, TiO2 pigments and speciality aluminas, in the quarter. TOR’s speciality alumina business is also benefit-ing from new business, which has helped to diversify the company’s customer, geo-graphic and product mix.

TOR is planning to invest approxi-mately $2 million at its plant in the Neth-erlands this summer to meet current and anticipated demand for its speciality alu-mina products. The Netherlands plant is near capacity and TOR expects business with existing customers to fill a significant portion of the expanded capacity. ■

Sales rise 40% at TOR Minerals in first quarterTiO2 firm reports second highest quarterly profit in more than a decade

‘‘Pricing of speciality TiO2 products lags behind commodity TiO2”Olaf Karasch, chief executive of TOR Minerals

MANuFACTuRING

DuPont has announced a compre-hensive titanium dioxide expansion

plan that will add about 350,000 tonnes of global capacity to the market. Plans include a new production plant in Mex-ico and investments at existing DuPont plants around the world.

A new TiO2 line at DuPont’s site in Al-tamira site in Mexico, costing over $500 million, is scheduled for completion by the end of 20�4 and will provide approxi-mately 200,000 tonnes of new capacity per year. In addition, facility upgrades at five of DuPont’s TiO2 manufacturing sites are under way and will continue over the next three years, resulting in �50,000 tonnes of additional capacity.

DuPont is still pursuing a business licensing agreement with the Chinese

authorities for a 200,000 ton per year world-class TiO2 plant. Construction at the proposed site of Dongying, in Shan-dong Province on China’s eastern coast, would cost approximately $� billion. The plant would serve the Asia Pacific region and China in particular, which today relies heavily on imports for much of the white pigment used on high-quality products such as automotive coatings and white goods, especially those intended for export.

BC Chong, president of DuPont Ti-tanium Technologies, said: “This expan-sion and upgrades of our facilities allow us to rapidly adapt to changes in the marketplace and consistently meet the ever-changing demands of our customer base.”

DuPont Titanium Technologies is the world’s largest manufacturer of titanium dioxide, serving customers globally in the coatings, paper, plastics and laminates in-dustries. The company operates plants at Delisle, Mississippi; New Johnsonville, Tennessee; edge Moor, Delaware; Al-tamira, Mexico; and kuan yin, Taiwan; all of which use the chloride manufactur-ing process. The company also operates a mine in Starke, Florida. Technical service centres are located in Paulinia, Brazil; Mexico City, Mexico; Mechelen, Bel-gium; Dzerzhinskiy, Russia; kuan yin, Taiwan; Ichon, korea; Shanghai, China; Hyderabad, India; and Wilmington, Del-aware, to serve the latin American, euro-pean, Middle eastern, Asian and North American markets. ■

DuPont to build new TiO2 plant in Mexico, invest in own plants



COMPANy NeWS

© H

B Fu

ller

lAnxESS PlAnS HQ MOVELanxess plans to relocate its headquarters from Leverkusen to Cologne within the next two years. The speciality chemicals group has signed contracts with building owner Kennedy-Ufer-Köln and the project developer Hochtief Projektentwicklung and expects to lease an area of around 38,000 square meters in the new 22-storey office building in Cologne’s Deutz area. More than 1,000 employees will make the move in the second half of 2013. Lanxess’ chief executive, Axel Heitmann, said the city has an infrastructure unique in North Rhine-Westphalia with excellent transport connections. It is also a renowned academic and research centre with an enormous attraction for top talent. “The building is currently being completely modernised. It will then become one of the most energy-efficient buildings in Germany,” said Heitmann. He added: “The high cost-efficiency of the new company headquarters and the benefits of Cologne as a location will assist us in our course of growth.”

HB Fuller this month celebrates the official opening of its manufacturing facility at the Nanjing Chemical Industrial Park in China. The plant is the first multinational reactive adhesives plant in China.

IN BRIeF

PPG COMPlETES CHlOr-AlKAlI BUSInESS ACQUISITIOnPPG has completed its $27 million acquisition of certain assets of Equa-Chlor, a producer of chlorine, caustic soda and muriatic acid. The Equa-Chlor plant, located in Longview, Washington, produces about 220 tons of chlorine a day with around 65 employees. In addition, the railcar fleet formerly owned by Equa-Chlor will be integrated into PPG’s own rail delivery system, enabling PPG to optimise overall railcar use while reducing future capital requirements and logistics costs. Michael McGarry, PPG’s senior vice president for commodity chemicals, commented: “We anticipate that current supply disruptions in Asia will have a favourable impact on the overall economics of this transaction.”

Swedish speciality chemicals company Perstorp is to establish production for

the polyalcohol neopentyl glycol at the group’s manufacturing site in Zibo, Chi-na, through its joint venture, Shandong Fufeng Perstorp Chemical Co., ltd.

Start up is expected in the second half of 20�2. “The investment is driven by the increased demand for neopentyl glycol in Asia, but specifically in China, and will amount to 40,000 tonnes per year,” says Mats Olofsson, vice president of Perstorp’s resin intermediates business. “The Chinese market is rapidly growing, thanks to an increased awareness of the environmental benefits of powder coat-ings, the main application for neopentyl glycol”,

Olofsson continues: “This investment is yet another step for us to strengthen

our presence in Asia and it is fully in line with our strategies going forward. With this new capacity, Perstorp will cement its position as one of the leading producers of neopentyl glycol, making it possible to take part in the fast and strong growth in this region.”

Perstorp says the polyalcohol neo-pentyl glycol is increasingly being used in environmentally friendly powder coatings for architectural applications, domestic appliances, transportation and automo-tive applications and general industrial applications. New application areas are being developed, like powder coatings curing at lower temperatures, giving good opportunities for the future. Currently, Perstorp is producing neopentyl glycol at its production facility in Perstorp, Swe-den. ■

Perstorp increases polyol capacity with investment in China

encouraged by the market’s appe-tite for bio-based chemical building

blocks, DSM is planning a commercial scale bio-based succinic acid plant for the second half of next year.

The �0 kilotons/year capacity plant will be built in partnership with French

starch and starch derivatives company Roquette Frères on the premises of Roquette in Cassano Spinola, Italy. It will be europe’s largest bio-based succinic acid facility.

Succinic acid is a chemical building block used in the manufacture

DSM builds bio-based succinic acid plant in Italy

MANuFACTuRING

›› page 13

PRA business publications [email protected]�3


COMPANy NeWS

Hempel has signed an agreement with Russian officials to build a

€23 million turnkey paint factory close to the city of ulyanovsk, 893 kilome-tres east of Moscow, promising �20 new jobs in the region and expand-ing the number of products Hempel has available to the Russian market. Scheduled to start production in Decem-ber 20�2, the plant is part of a strategy by the Danish marine and protective coatings producer to expand business in Russia. At present, Hempel supplies about 3�0 prod-ucts to the Russian market. The new plant will make six times that number available including a mix of standard products and products specialised for the local market.

“This will be our first Hempel factory in Russia,” said Hempel’s chief financial officer, kim Junge Andersen. “We’ve had a very good experience with our organi-sation in Russia, and they have become well-established in the market. This plant will significantly increase our ability to service our customers in the region.”

The new plant will feature the latest in environmentally-friendly coating produc-tion equipment technology, including a semi-automatic powder handling system, an automatic liquid dosing system and a solvent recovery unit. It has been designed to house raw materials and the finished product under one roof. The one-build-ing factory will occupy a 70,000 square metre plot. under one-shift operation, the factory will produce �6.3 million li-tres annually, but if further capacity is re-quired, the factory can operate with two shifts to raise production capacity to 26 million litres.

In order to meet local and Hempel Group environmental standards, all floors will be sealed to prevent soil contamina-tion in the event of a spill, or to collect water in the event of a fire. Solvents that have been used in the production proc-ess will be recovered in a solvent recovery unit and recycled for future use. Hempel estimates that this method can recover up to 90% of the solvents. ■

Hempel plans first Russian paint production facility

MANuFACTuRING

of polymers, resins, food and pharmaceuticals among other products. It can be used in a broad range of ap-plications, from packaging to footwear. Bio-based succinic acid is an alternative to petroleum-derived chemical building blocks, such as adipic acid and �,4-bu-tanediol.

DSM says its price competiveness and its renewable nature means bio-based succinic acid is addressing a larger market than fossil feedstock-based succinic acid.

The new commercial production fa-cility in Italy will produce fermentation-based bio-succinic acid. The proprietary yeast-based fermentation process, which operates at a much lower pH than com-peting processes says DSM, allows suc-cinic acid to be produced with a signifi-cantly higher energy efficiency compared to the traditional method. It is also one of the first bio-based processes that se-

questers carbon dioxide in the produc-tion process. Initially, starch derivatives will be used as feedstock. In the longer term the aspiration is to switch to second generation feedstock such as cellulosic biomass.

early in 20�0, DSM and Roquette opened a demonstration plant in lestrem, France, which has been running at full capacity. In 20�0 DSM and Roquette also announced their intention to estab-lish a joint venture, which will operate under the name Reverdia. The compa-nies are seeking regulatory approval for the joint venture. “The initial feedback from the market is very encouraging and proves that DSM and Roquette’s choice to invest in bio-renewable alternatives for fossil feedstocks by using biotechnologi-cal routes is starting to pay off. In case the market develops as DSM and Roquette expect, an even larger facility will be con-

sidered in the future,” said Rob van leen, DSM’s chief innovation officer.

He added: “The time is right to capi-talise on the tremendous progress we have made together with Roquette in the last two years. Our proprietary yeast-based fermentation process not only allows cost effective production; it also eliminates salt waste and other by-products and thus improves the overall eco-footprint of end-products. This bio-based chemical building block is a substitute for various fossil feedstock-derived monomers and proves that the bio-based economy is no longer a distant prospect.”

To optimally combine its competenc-es in life Sciences and Materials Sciences, DSM has set up emerging Business Ar-eas, including DSM Bio-based Products & Services and DSM Biomedical, and set ambitious growth targets including more than €� billion in sales in 2020. ■

‹‹ page 12

uS traffic paint producer ennis Traf-fic Safety Solutions, has sold its

uk-based contracting subsidiary, Prismo Contracting Services, which produces thermoplastic road marking materials, to DBi Services of Hazleton, Pennsylvania. Terms of the sale were not disclosed.

“We’ve thought about divesting our contracting division to concentrate on our core horizontal road marking products for quite some time,” said John Midea, presi-dent of ennis Traffic.

“ennis Prismo operated our only contracting division, so this decision was good for our international operations, the Prismo Contracting Services group and DBi.

“We will continue to concentrate on our core safety solutions products in eu-rope, the Middle east and Africa. This sale gives DBi a wonderful opportunity to ex-pand their international operations.” ■

Ennis sells UK road markings subsidiary

DIveSTMeNT



COMPANy NeWS

PPG Industries has agreed to acquire Dyrup, the Danish coatings company

owned by public holding company Mon-berg & Thorsen, for around €�35 million ($200 million), including assumed debt. The acquisition will expand PPG’s growth in several key european countries, includ-ing Poland, France and Denmark, and further establish PPG in several regions where until now it has had limited or no architectural coatings presence, especially in Portugal, Spain and Germany.

The transaction is expected to close in the third quarter of this year, subject to regulatory approvals, customary clos-ing conditions and consultation with ap-propriate employee representative bodies. Dyrup’s portfolio of architectural coatings and wood stains includes brands such as Bondex, Gori and Xylophene, sold prima-rily in Denmark, France, Germany, Portu-gal, Poland and Spain through professional and do-it-yourself channels. Sales in 20�0 were approximately €�90 million. Dyrup

employs about 950 people and operates six manufacturing facilities in europe. Pierre-Marie De leener, president of PPG europe, commented: “The acquisition of Dyrup would expand PPG’s european architectural coatings business by extend-ing our geographic presence in the region and by bolstering our wood care product offerings, an end-user segment where we today have a modest presence.”

Synergies, including improved raw material procurement, are expected to im-prove eBITDA margins at Dyrup in the near term to a level consistent with PPG’s existing european architectural business. “Dyrup’s operations and sales channels would be a great complementary fit with PPG’s structure,” added De leener.

“We believe this acquisition presents an excellent opportunity for customers of both companies, as well as a means to profitably grow PPG’s european architec-tural coatings business beyond organic opportunities.” ■

PPG to buy DyrupAcquisition would expand PPG’s presence deeper into Europe

ACQuISITION

African paint manufacturer Crown Berger kenya has formed a five-year

partnership with Flowcrete that will al-low it to sell Flowcrete’s seamless resin flooring systems in kenya and other east African countries.

Flowcrete, based in the uk and spe-cialising in epoxy floor paint and coat-ings, gains access to the African market, while Crown Berger gains additional products with which it hopes to win a bigger slice of kenya’s growing property market.

Flowcrete, owned by RPM Interna-tional in the uS, has also agreed to train Crown Berger staff, Rakesh Rao, Crown Berger’s chief executive, said. The five-year agreement covers sales to uganda, Rwanda, Sudan, Tanzania and Burundi,

in addition to kenya.last year Crown Berger made a pre-

tax profit of Sh�69.4 million for the year ended December 3�, 20�0. This was a 29.6% increase compared to Sh�39.8 million posted a year earlier. Turnover reached Sh3 billion as volumes grew by 2�.5 per cent. Net profit grew to Sh9�.4 million from Sh86.3 million in 2009.

“During the final quarter, rapid esca-lation of raw material prices was evident, although for 20�0 gross margins were improved by three per cent, with net profit being 5.52 per cent of sales, previ-ously 3.48 per cent,” said Rao.

Crown Berger manufactures decora-tive paints, automotive paints, industrial paints, road marking paints, as well as intermediates and thinners. ■

Kenya’s Crown Berger signs manufacturing agreement with Flowcrete in the UK

BASF plans to build a new dispersions plant in South Africa that will begin

production in the second half of 20�2. located in Durban, South Africa’s third largest city positioned on the east coast of the African continent, the plant will produce acrylic dispersions mainly for the coatings and construction industry.

locally available raw materials and proximity to key customers who serve South Africa’s and Sub Saharan Africa’s fast-growing markets make it an attractive proposition.

South Africa is the largest market for dispersions in Sub-Saharan Africa, ac-cording to BASF. “With this new facil-ity, we are well positioned to support our customers’ growth in South Africa and its neighbouring countries providing BASF’s quality, service and reliable supply,” said Christoph Hansen, senior european vice president for BASF dispersions for ad-hesives and construction. He says BASF can help customers move towards more environmentally friendly technologies, such as reduced volatile Organic Com-pounds (vOC) and products free of alkyl phenol ethoxylate (APeO), because of its portfolio of specialties. “This investment reflects BASF’s focus on participating in the strong growth markets in emerging Africa,” added Hansen.

BASF’s dispersions & pigments divi-sion encompasses pigments, resins, dis-persions and a broad range of additives like light stabilisers and photoinitiators. end-use industries include coatings, con-struction materials, adhesives, printing and packaging. The portfolio is mainly focused on environmentally friendly sys-tems, such as low-vOC water-based coat-ings.

BASF has been doing business in South Africa for more than 40 years. ■

BASF to build dispersions plant in South AfricaMove strengthens supplies for coatings and construction in South Africa and Sub Saharan region

MANuFACTuRING



AkzoNobel has struck a deal with the uS’s largest nationwide automotive

aftermarket and collision repair provider in which lkQ will take over the Dutch firm’s 40-store uS automotive paint dis-tribution business.

The Akzo stores will become part of Chicago-headquartered lkQ’s 300-strong network of facilities, which serve thousands of collision repair centres across the uS. lkQ will distribute all of Akzo’s refinish paint lines including the Sikkens, lesonal and u-Tech brands.

The transaction is expected to close at the end of the month, subject to custom-ary conditions. Financial details were not disclosed.

Jim Rees, managing director of Akzo’s automotive and aerospace coatings busi-ness, said moving towards independent distribution in North America would enable Akzo to focus on “strengthening our leadership in providing exceptional products, technology and service to the

automotive repair industry.”lief Darner, Akzo’s head of Perform-

ance Coatings, added: “By partnering with lkQ, we will be able to offer our products to a wider set of customers and strengthen our leadership position in one of our most important markets.”

The transaction impacts all AkzoNo-bel branch operations in the uS that are involved with automotive repair direct sales. The agreement between the two companies will see AkzoNobel’s Sikkens, lesonal and u-Tech brands distributed by lkQ. Financial details were not dis-closed.

“As part of AkzoNobel’s new sustain-able growth strategy we want to focus on growing our market share in mature markets and this deal will enable us to do that,” explained leif Darner, AkzoNobel’s executive Committee member responsi-ble for Performance Coatings. “By part-nering with lkQ, we will be able to offer our products to a wider set of customers

and strengthen our leadership position in one of our most important markets.”

With nearly 300 facilities, lkQ is the largest nationwide provider of after-market recycled and refurbished collision and mechanical replacement products for the automotive and truck market. Their diverse network as a partner to thousands of collision repair centers has made them one of the leading vehicle refinish paint distributors in the uS. “lkQ Corporation is one of the most recognized and respected names in the automotive industry and we are proud to have them as part of our growing North American network of distribution part-ners,” added Jim Rees, Managing Di-rector of AkzoNobel’s Automotive and Aerospace Coatings business. “By mov-ing towards independent distribution in North America, we can focus on strength-ening our leadership in providing excep-tional products, technology and service to the automotive repair industry.” ■

AkzoNobel divests US automotive repair distribution network

Superior Capital Partners acquires Rubex, Inc. as add-on investment to Edge Adhesives platform

Moving towards independent distribution will allow the business to concentrate on products, it says

COMPANy NeWS

ACQuISITION

ACQuISITION

Superior Capital Partners has bolstered its acquisition of edge Adhesives by

adding Ohio industrial sealant manufac-turer Rubex Inc. The bolt-on could be the first of more to follow.

Formerly owned by diversified chemi-cals company Chemence, Rubex special-ises in industrial, construction and trans-portation sealants and adhesives, and is one of the world’s largest manufacturers of extruded preformed butyl tape. Com-bining it with edge Adhesives, both in-creases edge’s manufacturing capacity and geographical reach. It also broadens edge’s offering with a complementary line of products.

edge, which makes gaskets, sealants and adhesives based on butyl, asphalt and

proprietary block copolymer technologies from its factory in Fort Worth, Texas, was acquired by the lower-middle market pri-vate equity firm in March last year. In an-nouncing the acquisition of Rubex, Scott Hauncher, Superior Capital’s managing director, said he was looking for more such bolt-on acquisitions. His plan is to grow edge through additional acquisi-tions in the industry. Financial details of this transaction were not disclosed.

Superior’s strategy is to acquire or recapitalise niche manufacturers, value-added distributors and speciality service companies. Companies generally have annual revenue of $�0 to $�50 million, identifiable growth opportunities and a need for capital and resources.

nEW CEO nAMEDRecently, edge named Dave Burger as

its president and chief executive. A former 3M executive from its industrial adhesives business unit and a former chairman of the Adhesives & Sealants Council, Burger is a 25-year veteran of the adhesives and sealants industry.

Of the acquisition, Burger said: “The partnership between edge and Rubex creates a more diverse and substantial player in the industry with complemen-tary manufacturing locations in Ohio and Texas. The combined company possesses several unique formulations and adhesive technologies that offer performance and environmental qualities that are among the best in the industry.” ■



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COMPANy NeWS

evonik Industries has finalised its pur-chase of the Hanse Chemie Group,

including Hanse Chemie and Nanoresins, for an undisclosed sum. The acquisition opens up additional markets for special-ity applications in silicone chemistry for evonik.

Headquartered in Geesthacht, near Hamburg, Hanse Chemie produces raw materials and components for the manu-facture of sealants and adhesives, molding and casting compounds, and other prod-ucts used in a variety of industrial mar-kets including construction, automotive manufacturing, wind-power and photo-voltaics. The group also makes nanocom-posites, based on extremely fine-parti-cle silicic acid. These are mostly used in paints and coatings to improve their sur-face hardness and achieve a higher degree of scratch resistance without any loss of transparency. ■

Evonik finalises acquisition of Hanse Chemie Group

Altana acquires printing ink manufacturer Color Chemie

German specialty chemicals group Altana is to acquire compatriot inks

maker Color Chemie as part of a growth through acquisition strategy.

Headquartered in Büdingen, Hesse, Germany, Color Chemie produces main-ly environmentally friendly, water-based speciality printing inks and related serv-ices with about �50 employees. Its print-ing inks are primarily used for packaging boxes, foils, carrier bags, gift wrapping papers and wallpapers. Sales last year to-taled €46 million.

The business has additional produc-tion sites in Bonn, Germany, and in Austria, France and Poland. The business will be integrated into Altana’s ACTeGA Coatings & Sealants division.

Altana’s chief executive, Matthias Wolfgruber, said targeted acquisitions will

make a decisive contribution to Altana’s growth course. He added: “like Altana, Color Chemie focuses on products and services in technologically demanding niche markets and therefore fits excellent-ly into our portfolio.” The Color Chemie focus on water-based technology is an ad-vantage in the context of ever increasing environmental protection requirements. “Color Chemie’s range of products, there-fore, optimally complements our existing activities in the area of packaging print-ing. At the same time, due to the divi-sion’s global presence, ACTeGA opens up further growth opportunities for the products of Color Chemie.”

The transaction is subject to the ap-proval of Germany’s Federal Cartel Of-fice. ■

German inks company with plants in Germany, Austria, France and Poland had sales of about €50m in 2010

ACQuISITION



COMPANy NeWS

AkzoNobel is seeking to separate the paints activities from the rest of the

business of its subsidiary ICI Pakistan. The Dutch firm, which acquired the Pa-kistani business as part of its acquisition of ICI in 2008, wants to retain the paints part of the business but feels the rest of the business would be better off in the hands of new owners.

ICI Pakistan is listed on the karachi, lahore and Islamabad stock exchanges, with AkzoNobel currently holding 75.8% of the shares. Focused primarily on the Pakistan market, ICI Pakistan’s main busi-nesses are in polyester fibre, soda ash, life sciences, chemicals and decorative paints. In 20�0 ICI Pakistan had revenues of €305 million.

AkzoNobel has asked the approval of the Pakistani courts for it to create two le-gal entities, both of which would be listed on the karachi, lahore and Islamabad stock exchanges. Akzo would retain a 75.8 shareholding in the new paints business

PPG has acquires the business of Du-col Coatings South Africa, which has

served as an importer and distributor of PPG’s automotive refinish products in South Africa since 2003.

Financial details were not disclosed.Ducol Coatings, based in

krugersdorp, northwest of Johannes-burg, was formed in �990 and has been active throughout South Africa and in Namibia.

John Outcalt, PPG’s vice presi-dent, automotive refinish, said: “We are pleased with the acquisition of the Du-col Coatings business, as this investment illustrates PPG’s commitment to grow its coatings business presence in the re-

gion.” He continued: “PPG now will be able to directly serve customers in the region with our high-quality, innovative automotive refinish products and our customer service, technical support and training programmes.”

PPG plans to continue to use the Ducol brand, as well as Ducol Coatings’ former franchisee and distributor net-work, giving PPG access to a solid, prov-en distribution network in the growing South African and surrounding markets. Many of the world’s largest automotive manufacturers have a presence in South Africa. PPG anticipates population growth and higher incomes will lead to more vehicle sales. ■

AkzoNobel seeks to separate paints from rest of business at ICI Pakistan

PPG acquires auto refinish distributorDeal strengthens PPG’s presence in the South African region

ACQuISITION

CARve OuT

DSM closes sale

entity, but would seek appropriate buyers for its shareholding in the other business entity. AkzoNobel said a strategic review conducted over the last few months had shown a “clear commercial benefit” to holding onto the paints business. ■

DSM has completed the sale of its DSM elastomers business to lanxess

for €3�0 million.The transaction will result in a book

profit of more than €�00 million for DSM in 20��.

DSM elastomers produces the syn-thetic rubber ethylene-propylene-diene monomer under the brand name keltan. located in Sittard-Geleen, the Nether-lands, it has roughly 420 employees who will transfer to lanxess. ■

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PRADOCUMENT

DELIVERY SERVICE



TeCHNOlOGy

By Sean Milmo

Jazz Aviation has repainted two regional aircraft with the most advanced, “green”

coatings system by PPG Industries’ aero-space business. The chromate-free PPG coatings system reduces environmental impact, lowers weight, and provides a smooth, glossy and highly durable finish.

The two Jazz airplanes were repaint-ed by Springer Aerospace, Sault Ste. Marie, Ontario, with DeSOTHANe(R) HD/CA 9000 basecoat/clearcoat, DeSOPRIMe(TM) CF/CA 7502 epoxy primer and DeSOGel(TM) eAP-9 metal pretreatment, all from PPG.

According to Ron Nakamura, PPG general manager and business manager for aerospace in Canada, Jazz is the first airline in Canada to specify the complete green PPG system.

“Jazz jumped on the opportunity to be the first commercial operator in Canada to have aircraft painted with the newest green coatings technology,” Na-kamura said. “One aspect of going green is the chromate-free pretreatment and primer formulations of our coatings sys-tem, which require no special handling

or waste disposal. A second aspect is that the PPG green coatings system reduces the weight of painted aircraft by more than 30 pounds, resulting in fuel savings and lower emissions. Third, because Des-othane HD/CA 9000 basecoat/clearcoat features high durability, we expect the repaint cycle to be extended by several years, leading to additional cost savings and green benefits.”

The PPG coatings system consists of a heavily pigmented basecoat and a clear topcoat. using Desothane HD/CA 9000 basecoat/clearcoat can reduce painting cycle process time by up to one full day, because the fast-drying basecoat provides colour in one coat, as compared with two or three coats in a typical system.

“One thing I really liked was the one-coat application,” said Jeff Springer, president of Springer Aerospace, who de-scribed the system as being user-friendly. “It was amazing how well the basecoat covered. We were all surprised. It covered better than any new type of paint that I’ve seen in a very long time.”

Springer also was pleased with the

Jazz repaints aircraft with advanced PPG Aerospace ‘green’ systemIt is the first commercial aircraft in Canada to use PPG system for weight and maintenance savings

“very glossy finish” and the fact that the clearcoat is applied over external markings and placards, unlike traditional systems in which they are painted on last. Springer explained that this makes them suscep-tible to wear-and-tear from the elements so that they wear off quickly. “With this system, you apply clear right over all of those. I’m hoping that will make them last as long as the paint,” he added. ■

© P

PG A

eros

pace

Producers and importers of lead chro-mate pigments in the european mar-

ket are under mounting pressure to find alternatives with the same quality of col-our and hiding power.

lead chromate pigments for yellow and red have been put on the european union’s ReACH candidate list for the au-thorisation or replacement of substances.

This could mean that, over the next few years, production and imports of the lead pigments will be phased out. Because they are thought to be carcinogenic and toxic to reproduction, they are classified as being substances of very high concern (SvHC), while there is also the belief that alternatives are possible.

The problem is lead chromates provide yellow, red and orange colours and shades that cannot be replicated by a single pig-ment. ekhard korona, a technical market manager for pigments at BASF, says: “It’s impossible to have a single lead-free pig-ment with the same levels of chroma and hue. The best alternative is a combina-tion of an inorganic with an organic pig-

Can hybrid inorganic/organic pigment combinations replace lead chromate pigments?



ment.”BASF has become the world’s larg-

est pigments producer since its takeover of Ciba Speciality Chemicals two years ago. The company has brought together its knowledge in both inorganic and or-ganic pigments and has already developed a lead-free pigments portfolio.

Inorganic bismuth vanadate pigments, which are marketed by BASF and inor-ganic specialists like Nubiola of Spain, has properties similar to lead chromates with a high level of heat and weather resistance. But to provide the same level of brilliance and opacity as lead chromates, a hybrid is required with the organic component giv-

ing the colour intensity and the inorganic one the same resistance.

But it is not clear how quickly the industry will move. Not many pigment producers are big enough to have suffi-cient expertise in inorganic and organic pigments to make hybrids. “They are dif-ficult to make technologically,” says ko-rona during a product presentation at the recent european Coating Show in Nu-remberg. “Also, the hybrid replacements are more expensive than the original lead chromate pigments.”

Suppliers of bismuth vanadate pig-ments like Nubiola are among a decreas-ing group of european pigment producers still marketing lead chromate pigments and says Oriol Argemi, one of Nubiola’s sales managers, sales of lead chromates at Nubiola are actually increasing because so many producers have pulled out of the market. So at the moment, his company does not have plans to switch to inorgan-ic-organic hybrids as an alternative to lead chromates. ■

‘‘It’s impossible to have a single lead-free pigment with the same levels of chroma and hue”Ekhard Korona, market manager for pigments at BASF

TeCHNOlOGy

REACH: Companies to notify European Chemicals Agency about dangerous substances in articles

From 1st June 2011, producers and importers of articles containing substances of very high concern (SVHC) must notify the European Chemicals Agency of the presence of these substances. The articles affected include clothes, toys, vehicles and electronic equipment. The obligation, which is part of REACH, the EU chemicals legislation, will ensure that industry, authorities and citizens are better informed about the use of substances of very high concern in everyday articles. Substances of very high concern, such as those that cause cancer, mutations or problems with reproduction are listed on the REACH Candidate List. There are currently 46 substances on the list, which is updated regularly. After each extension of the list, companies have six months to notify the European Chemicals Agency of the newly listed SVHCs in their articles. Companies must also inform their customers when an article contains substances on the Candidate List in a concentration above 0.1% of its mass and provide sufficient information to allow safe use of the article.

Due to new accommodations and scheduled construction of new plants, global ethylene capacity is expected to outrun the demand growth and reach �62 million tons by 20�2, according to Merchant Research & Consulting.

MR&C says the geographical demand supply dynamics are anticipated to change due to large capacity additions currently in progress in the Middle east and China. During the next few years, over 28 million tons of new capacities are planned to be added in Middle east and China. This will result in a significant downturn in the share of developed regions (North America and europe).

The augmentation of capacity in the Middle east is expected to be disastrous for liquids-based producers, forcing them to pull down the shutters, possible bankruptcy or government rescue, says MR&C. Most likely to being under pressure from new world scale plants are ageing facilities. The older crackers are likely to be shut down because of higher variable costs and feedstock costs.

Ethylene: 2011 World Market Outlook and Forecast is a new market research report providing a detailed review and forecast on global, regional and country markets of ethylene. The report covers the present situation, historical background and forecasts and presents comprehensive data showing ethylene capacities, production, consumption, trade statistics, and prices in the recent years are provided (globally, regionally and by country).

See: http://mcgroup.co.uk/periodicals ■

MARkeTS

Global ethylene capacity is forecast to reach 162 million tons by 2012



MARkeTS

Tony Mash, the British Coatings Fed-eration’s chief executive, summed up

the mood when addressing members at the trade group’s annual conference in lon-don this month: “The industry is having a really tough time. There are some signs of recovery for some sectors, but others are floating along still in recession.” And, he said, the industry is in the grip of raw ma-terial price inflation and shortages.

Mash was unashamedly critical of the chemicals industry for failing to keep pace with global demand for raw materials. “The chemical industry is not growing fast enough, and it’s not good enough,” said Mash, adding that: “long term supply relationships are being destroyed by the current shortages from traditional suppli-ers.” He sees little evidence of investment in upstream raw material manufacturing capacity, other than in Asia, which he says is “constraining growth in the coatings in-dustry.”

But, in addition to some cold truths, the afternoon speeches at the annual event were about practical positive actions and large helpings of inspiration, with no one delivering all three more forcefully than Brian “I call it as I see it” Davidson, the chief executive of Crown Paints. The Glaswegian related how he turned Crown around, despite taking it on just as the 2008 economic crisis was unfolding, and nothing short of a complete overhaul of the cost structure, purchasing system and culture was needed. A.T. kearney con-sultant Daniel Mahler argued the business case for sustainability and Tim Smit, co-founder of the eco garden eden Project, treated everyone to an extremely enter-taining and inspirational, off-the cuff nar-rative about taking risks and innovation.

Paints and inks companies in the uk are now coping with a basically flat mar-ket after experiencing two years of sharp falls in sales and volume. For industrial coatings, the slide started in 2007, falling almost 30% over a time period of almost three years. Decorative paint volumes be-gan to slide in 2008 and declined by near-ly 20% over the next two years.

The British Coatings Federation talks about tough times and positive actions at annual conference in London

Stephen Snaith (left) of AkzoNobel took over the presidency of The British Coatings Federation this month following the two-year tenure of Richard Chapman (right)). Snaith is currently director of marketing for professional brands across europe, the Middle east and Africa for AkzoNobel Decorative Paints. Prior to this he was marketing director for the uk trade business of ICI Paints with responsibility for the sustainability and environmental strategy of the uk decorative coatings business.

BCF members’ data shows the uk in-dustrial sector sales were badly hit in 2008 and 2009 with double digit falls in both years but with 20�0 showing sales up 5% and with 20�� also improving by a simi-lar amount so far this year, though marine and high performance coatings have been struggling.

In the decorative sector, early signs of improvement at the start of 20�0 were short lived and the trade paint market was broadly flat compared with a fall of �2% in the previous year, according to the BCF. And, says the BCF, woodcare has been having a good run in 20�� in part due to the favourable weather in re-cent months. The market for printing ink appeared to stabilise in volume terms in 20�0, after a �0% reduction in 2009.

Some companies have taken advan-tage of the weak pound and increased their focus on export sales. Profitability has recovered some of the ground lost in recent years, but members report that margins remain well below long term av-erage levels.

rEGUlATIOnS

On the regulations front, last year was significant for two major european regulatory requirements. The adoption of the 20�0 vOC limits, which was imple-mented successfully, and the launch of the first round of europe’s chemicals registra-

tion regulation – ReACH. At this point, ReACH round one has not led to major supply chain discontinuities, commented Mash, although he said some raw materi-als are being withdrawn as a result.

A bone of contention is the consider-ably increased size of the new safety data sheets. Mash said the BCF is working with regulators to address this. He stressed that he sees it as a prime job of the BCF to influence the course of regulation by fighting to reduce cost and complexity and getting involved in development at an early stage.

The body, he said, is strengthening its working relationships with european umbrella trade association, CePe and with the International Paint & Printing Ink Council (IPPIC). The BCF’s Wayne Smith and Tony Newbould play key roles on CePe committees that address issues with the european Chemicals Agency (eCHA) and the european Commission. Wayne Smith also sits on safety data sheet and labelling and transportation panels, while Mash has chaired the CePe Sus-tainability Task Force and Working Party as well as sitting on the National Associa-tion Directors meeting. New european legislation is likely to stem from politi-cal interest in areas such as updates on ReACH, printing ink ordinances, green product procurement initiatives, trans-port, the biocidal products and

BCF welcomes new president

›› page 21

PRA business publications [email protected]�


MARkeTS

the construction products regu-lations.

Mash concluded the afternoon speech-es by saying the BCF remained in good health with a balanced budget. However, to ensure a strong future he is reposition-ing the association with stronger links to outside organisations and investigating the potential for a merger with other trade associations. ■

‹‹ page 20

The head of AkzoNobel’s european powder coatings business has said the

industry is living through “unprecedented times” describing a “tidal wave” of raw material price hikes as “literally unimagi-nable until very recently.”

“As a long term participant in this in-dustry, we have never witnessed a similar situation with continued, and ever more frequent, increases in our purchasing costs,” said Gordon Macleman, manag-ing director of the business unit, in a note published at the end of the month.

“However, our main concern is the availability of raw materials,” said Macle-man. For all its size, Akzo has experienced late deliveries and short supply, causing some disruption to its supply chain, even as it benefits from a strong global net-work.

“Following on the strong price in-creases at the end of 20�0 and beginning of 20��, we are now seeing significant

Raw material price escalation “unprecedented” says Akzo Powders managing director

The TiO2 industry is currently rebounding from years of

persistently low margins and, barring a recurrence of any global calamities such as the just past financial one, this trend is likely to continue for several years, says mineral and mining experts TZ Minerals International.

At the same time, the stress on the market in 20�� may be leaving some pigment producers unable to source adequate supplies and forced to temporarily idle or reduce output. Similarly, TiO2 producers face being unable to meet the demands of all of their customers, due to the lingering effects of 2009 capacity shutdowns. Furthermore, there is no available inventory from which to supply short-term customer needs, as has been the case in prior years, says TZMI.

TZMI’s latest TiO2 Pigment Annual Review will say that the first quarter of 2009 turned out to be one of the worst the industry has ever encountered, with business down 34% compared to the first quarter in 2008. As production eventually dropped below demand, the supply chain de-stocked.

However, the recovery in 20�0 was firm and trade volumes increased to 3.6 million tonnes in 20�0, or 68% of

global demand.Global demand is now rising at

a compound average growth rate (CAGR) of 4.4% and will continue at this rate until at least 20�3 - rising from 5.3� million tonnes in 20�0 to 6.05 million tonnes in 20�3, TZMI calculates.

Demand in North America, it says, will grow by 2.2% during this period. However, demand in Asia-Pacific is expected to grow by 6.7%.

Capacity growth during the next �0 years is expected to be driven by the above global average demand growth in Asia-Pacific. TZMI expects global capacity to grow by around 4.7% in the 20�0 to 20�3 period; around 65% of this new capacity will be installed in Asia-Pacific.

The 20�� TiO2 Pigment Annual review details the titanium supply chain, manufacturing technologies, characteristics, demand, supply, trade pigment plant economics, tends and outlooks. Trade data is reviewed and producer profiles are included. The locations of pigment plants are also listed.

For more information see: http://www.tzmi.com ■

TiO2 producers potentially unable to meet demands of all customers, says review

TiO2

further increases in our purchasing costs,” said Macleman, adding: “This looks set to continue for the foreseeable future and there are no indications that this situation will improve. Demand for raw materials is still increasing, especially in some rap-idly developing economies, and this is re-

sulting in prolonged price escalation glo-bally. unfortunately, we believe we will see continued shortages and consequently increases in our purchase costs for some considerable time to come.” In response, Akzo is seeking to pass on part of these increases to its customers. ■

‘‘We have never witnessed a similar situation with continued and frequent increases in costs”Gordon MacLeman, managing director of AkzoNobel Powder Coatings, Europe



MARkeTS

The market for renewable chemicals is estimated to reach $76.�6 billion

across the globe in 20�5, according to a report now available from Markets and Markets. This is a rise of nearly $40 bil-lion from $36.90 billion in 2009, or a compound average growth rate of �2.67% from 20�0 to 20�5.

Global Renewable Chemicals Market by Geography, Feedstocks, Prices, Applications Trends and Forecasts (2010 -2015) analy-ses the global markets for major renewable chemicals, such as alcohols, polymers, ke-tones, and acids; along with the major ap-plications of renewable chemicals. various end-use segments for these products are also discussed as are a number of industry players, plus market trends, opportunities, drivers, and inhibitors. The market is di-vided into the major geographical regions of North America, europe, Asia, and Rest of the World (ROW). The top 20 compa-nies in the renewable chemicals space are identified and described.

More information about the report can be found at: http://www.marketsand-markets.com/Market-Reports ■

German industrial market research institute Ceresana forecasts a world-

wide growth in demand for plasticisers to more than 7.6 million tonnes per year by 20�8. The largest market is the Asia-Pa-cific region, with China holding on to its dominating position with a 65% share.

While the demand for plasticisers in North America and Western europe is ex-pected to see only below-average growth, all other regions will expand their shares. Dynamic development in China, India, Russia and Brazil offers manufacturers and processors of plasticisers the best op-portunities. Ceresana anticipates that de-mand in these countries will increase by more than 4% per year by 20�8.

Floorings, profiles, cables, and films made of plastics, especially PvC, are the most important fields of application for plasticizers, accounting for more than 50% of the global market. While the de-mand for plasticisers used in plastics is expected to weaken over the next eight

years, adhesives, rubber, as well as paints and varnishes will see their demand in-crease by more than 3% each.

Ceresana Research forecasts changes in the types of plasticiser used. In 20�0, the market was still dominated by phthalate plasticisers, says Ceresana. With a rough-ly 54% share, di-(2-ethylhexyl)phthalate (DeHP) was the most widely used plas-ticiser. However, DeHP will be increas-ingly replaced by other plasticisers over the coming years.

Due to legal provisions and growing environmental awareness, producers are increasingly being forced to use non-phthalate plasticisers, for example, based on vegetable oils. In North America alter-native plasticisers account for about 30% of the market in 20�0.

Information about the report of the plasticiser market and a list of producers, can be found from Ceresana Research at http://www.ceresana.com/en/market-studies/additives/plasticizers-new/ ■

Formaldehyde is fairly easy to produce, but it cannot be shipped over long distances. It can generate stability-associated problems during transportation. So this chemical product is usually produced close to the point of consumption, says Merchant Research & Consulting. Consequently, global formaldehyde trade is minimal. Major uses of formaldehyde include the production of urea-, phenol-, and melamine-formaldehyde (uF, MF, and PF) resins, accounting for 66% of total global consumption. The largest end-use being uF resins that consume over half of total global formaldehyde.A new report will say that in 20�0, both global production and consumption of formaldehyde reached 29 million metric tons. However, formaldehyde consumption is expected to grow 5% per year during the period of 20��-20�5.A detailed review and forecast on global, regional and country markets of formaldehyde can be found in the new market research report Formaldehyde: 20�� World Market Outlook and Forecast that covers the present situation, historical background and future forecast and addresses comprehensive data showing formaldehyde capacities, production, consumption, trade statistics, and prices in the recent years are provided (globally, regionally and by country).For details about the report contact http://mcgroup.co.uk/periodicals ■

Plasticisers report shows demand growth led by China, India, Russia and Brazil

Formaldehyde market expected to grow 5% annually, according to Merchant Research & Consulting

Market report: Global Renewable Chemicals Market to reach $76 Billion Plasticisers improve the properties of plastics, paints and varnishes,

rubber and adhesives.

GROWTH



Our monthly roundup of coatings features from the world press, available in full from the PRA library.Requests for copies of any of these articles can be made to the PRA library at [email protected]. A photocopying and copyright fee is charged.

Sales and production of paint in Japan 2010Japanese paint shipments totalled �,600,0�5 tonnes in 20�0, up 7.8% com-pared with 2009. Sales volume totalled �,74�,377 tonnes, valued at y 674 bil-lion (up 6.3%). Nitrocellulose lacquers accounted for production of �7,630 tons (up �9%), insulating enamels and var-nishes 28,4�4 tons (up 3�.3%), organic solvent type coatings 599270 tons (up 5.9%), water thinnable types 357,390 tons (up 9.8%), powder coatings 29,729 tons (up �4.5%) and road marking paints 58,790 tons (unchanged). Statistics are included for various specific coating sys-tems, e.g. urethane base paints at ��4,3�4 tons.JAPAN PAINT MANUFACTURERS ASSOCIATION Available at http://www.toryo.or.jp/eng/data e/eng10.htm

Photocopies of articles and books can be provided from PRA library call 0208 487 0800

Paint firms look to emerging economies for growth opportunitiesThe activities of european paint companies in expanding their markets outside Western europe are discussed. It is noted that the slow-growing domestic market for these companies means that increases in sales have to come from expansions in

AlSO IN PRINT

Bouncing back: adhesives

Global formulated adhesives consumption in 20�0 was 8 million tonnes, valued at $22 billion. volume rose 6% compared with the low of 2009, and was about equal to 2008. volume growth is forecast at 4.5% per annum to 20�5. The Asia-Pacific region accounted for 38% of global volume in 2008 and this is forecast to increase to 46% by 20�5. China is by far the largest market in the region, accounting for 54% of the regional volume in 20�0. European Coatings Journal, 2011, No 4, 12-3.

Brazil’s decorative paints market to growBrazil’s decorative paints market was valued at $2077.3 million in 20�0, according to Frost and Sullivan. Growth is forecast at 5.8% per annum, with the market value reaching $3262.6 by 20�7. Almost all Brazilian decorative paint consumption is produced locally, while exports contribute 5% of revenues, and come mainly from multinationals. Decorative paints accounted for 63.8% of the Brazilian paint market in 20�0, followed by general industrial paints at 2�.4% and refinish and automotive at �4.8%. The top �0 companies in Brazil account for 90% of the decorative coatings market. Coatings World, 2011, Vol 16 No 4, 20

Resins market report

The opinions of some resins suppliers on the state of the market are presented. Most suppliers are seeing signs of recovery from the economic downturn, and demands from paint formulators are reported to include alternative technologies, lower cost, security of supply and better performance properties. The ways in which resins producers are trying to balance the demands of customers with rising production and raw material costs are discussed. Products introduced to meet the demands of environmental legislation are also considered.Coatings World, 2011, Vol 16 No 4, 27-30

Smart coatings markets 2011A recent market report from NanoMarkets llC is discussed. The applications discussed in the report include anti- corrosion, antifouling, self-cleaning, antimicrobial agents, self-healing/self-repairing, and self-stratifying coatings.Polymer Paint Colour Journal, 2011, Vol 201 No 4559, 12

the faster-growing markets of Asia, latin America and eastern europe. AkzoNobel is reported to have increased decorative coatings sales in Asia and latin America by 33% and 25% respectively, whilst growth in europe was only 2%. Coatings World, 2011, Vol 16 No 4, 22-3

Vinyl acetate market to be more competitiveChinese vinyl acetate capacity reached �.605 million t. per annum in 20�0, with domestic production at about �.� million tons, up �8.3% from 2009. There are �5 vinyl acetate manufacturers in China, with the top five accounting for over 56% of output. the largest company is Celanese (Nanjing) Chemical, which contributed 220,000 tons in 20�0 (20% of China’s total). Consumption of vinyl acetate in China reached �.34 million tons in 20�0. Polyvinyl alcohol production accounts for 84.�% of production, whilst consumption in ethylene/vinyl acetate copolymer and polyvinyl acetate are rising rapidly, reaching 4% and 8.6% of the total in 20�0. Capacity expansion plans, pricing and prospects are discussed.China Chemical Reporter, 2011, Vol 22 No 8, 20-1



Predicted Paint Demand in Japan

Market Volume (1,000tons)

Year-on-year change

(%)Buildings 385 101.6

Building Materials 74 101.4

Steel Structures 84 105.0

Marine Usage 111 98.2

New Vehicles 219 97.8

Repainting 44 97.8

Electrical Appliances 65 101.6

Industrial Machinery 54 103.8

Metallic Products 93 101.1

Wooden Products 23 100.0

DIY usage 34 100.0

Road Markings 77 100.0

Exports 98 110.1

Others 97 101.0

TOTAL 1,458 101.2

Source: The Japan Paint Manufacturers AssociationThe Paint & Finishing News 16-03-11

Predicted demand for paint by market in Japan for fiscal 2011 (01.04.2011-31.03.2012)

STATISTICS



PrA Training Programme2011

www.pra-world.com/training

Paint & Coatings Basics, 7 June 2011 & 22 November 2011Member £378.00 Standard £420.00

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For further information contact: Elisabeth Brown - [email protected]: +44 (0)20 8487 0815

DIARy



AkzoNobel 15, 17Altana 16BASF 3, 14, 17Bayer MaterialScience 10Becker Industrial Coatings 4, 5BYK-Chemie 8Crown Berger 14DSM 4, 17DuPont 11, 12Dyrup 14Eastman Chemical 9Edge Adhesives 15Ennis 13Evonik 16Focus DIY 8Hempel 13Henkel 9Huntsman Pigments 10Jotun 8Lanxess 12Momentive Specialty Chemicals 9Perstorp 12PPG Aerospace 18PPG Industries 12, 14Rubex 15Superior Capital Partners 15Tikkurila 6TOR Minerals 11Valspar 7

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