- Email: [email protected]
Sales growth expected to slow in 2008
F O C U S acquired US-based specialtyresins producer Soluol, which makes high performance urethane resins used in a wide range of applications with sales of $20 M/y. DSM Resins also acquired Polymeric Processes Inc, an innovative producer of UV-curable coatings for tube and pipe applications. DSM Food Specialties acquired CMT Srl in Italy, a company dedicated to the production of the Copan Milk Test. On 28 Apr 2008, DSM announced the acquisition of The Polymer Technology Group (PTG) to expand its fast growing biomedical materials business at the crossroads of Life Sciences and Materials Sciences. PTG expects to realize approximately $40 M in net sales in 2008 with an above-average operating profit margin. DSM Venturing announced its first investment in China and also acquired a significant minority stake in IQ Therapeutics BV. A number of investments aimed at future profitable growth were announced during the quarter such as an investment of €15 M in a new resins plant in Meppen (Germany). More recently DSM announced plans for the largest investment program ever for DSM Dyneema, expected to involve up to $450 M. DSM Powder Coating Resins announced a long-term manufacturing plan to expand its polyester powder coating resin facilities. DSM recently opened a market development plant for PA4T, the first new polymer of the 21st century, for use in electronics and other applications. Since the announcement of PA4T in Sep 2007, numerous trials at selected customers have been completed. The initial results and customer feedback are very positive and with the opening of the market development plant customer access to PA4T will be extended. As a result of the accelerated shift towards Life Sciences and Materials Sciences, DSM announced that a number of JUNE 2008
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businesses, which do not fit in with the accelerated strategy, would be carved out and divested. This process started at the end of 2007. The carve-out is on schedule and is expected to be completed by mid 2008, with the divestment process for the major part commencing thereafter. During 1Q 2008, DSM announced the intended sale of DSM Special Products to Arsenal Capital Partners. The sale is expected to close in 2Q 2008, subject to regulatory approvals.
the Mahindra-Renault-Nissan facility that will be built near Chennai and the MahindraRenault plant in Maharashtra. Japanese firm Nippon Paints is establishing facilities in Delhi and Chennai. A bar graph illustrates regional automotive OEM coatings markets and their growth rates in 2006-2007.
DSM Interim Report 1Q 2008, 29 Apr 2008, 7-8 (DSM, PO Box 6500, 6401 JH Heerlen, The Netherlands, tel: +31 45 578 2422, fax: +31 45 574 0680, website: http://www.dsm.com)
Several mergers and acquisitions within the paint industry were completed in 2007, with about 24 paint transactions in the USA alone. These transactions ranged from million dollars management buyouts to multi-billion dollar investments by industry majors. The three leading acquirers were PPG, Sherwin-Williams and Akzo Nobel. In 2007, PPG launched bids to acquire SigmaKalon and Barloworld, and closed the purchase of Champion Coatings. The acquisition of Champion has allowed PPG to build up its market share in transportation coatings. Sherwin-Williams completed two major buyouts in 2007. The MA Bruder purchase included approximately $150 M in sales of architectural coatings. Sherwin-Williams’ merger deal with Columbia Paint & Coatings will allow the company enhance its foothold in the northwest USA. Akzo Nobel bought Ceilcote and Chemcraft in 2007. The Chemcraft acquisition bolstered Akzo’s presence in the North American wood coatings market. Akzo is able to strengthen its position in the protective coatings market with the purchase of Ceilcote. Other notable paint related acquisitions are discussed.
Automotive OEM coatings market The global automotive OEM coatings market was valued at about $8.971 bn in 2007, according to Chemark Consulting. The three largest markets were North America, Western Europe and Japan, making up a combined $7.3 bn of the sector. China, India and Eastern Europe represent a small portion of the global automotive OEM coatings market, but they demonstrated the highest growth rates. In 2007, China achieved a double-digit growth of 11.5%, India posted an 8.2% growth rate and Eastern Europe, led by Russia, recorded 5.5%. Information Research predicts Russia’s automotive OEM coatings market will expand by a maximum of 30%/y from its current level of approximately 50,000 tons. This will be driven by the expected increase in car production in the country from 165,000 units in 2004 to 900,000 by 2010. To take advantage of the flourishing Indian automotive sector, paint companies are setting up production bases in the country. Korea Chemical Co (KCC) is constructing a site in Sriperumbudur near Chennai, close to the Hyundai Motors plant. Asian PPG is setting up a facility in Sriperumbudur, to service Hyundai as well as tap
Coatings World, Mar 2008, 13 (3 (part 1)), 28,30,32-33
2007 M&A review
Coatings World, Mar 2008, 13 (3 (part 1)), 34-35
Sales growth expected to slow in 2008 Sales of paint companies are expected to experience a slump 7
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in 2008 because of the slowdown in the world economy. However, their counterparts in Western Europe remain optimistic that the sort of recession lurking in the USA will not happen to them. Strong economic growth in Eastern Europe, especially in Russia, will also significantly bolster the prospects of paint companies in the region. Strong demand in Asia will also help companies with worldwide sales presence. For example, Akzo Nobel generated substantial sales growth in industrial coatings in
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Asia, Russia and the rest of Eastern European countries in 2007. Coatings sales grew by 5% to $6.5 bn while earnings before interest, tax, depreciation and amortization increased by 12% to €737 M. Sales of paint at ICI, which was acquired by Akzo Nobel in Jan 2008, grew by only 3% in 2007 due to a drop in demand for decorative coatings in the USA during 2H 2007. Jotun of Norway, which is mainly focused on shipbuilding and oil and gas projects, posted a 25% increase in operating profit.
C OAT I N G S Revenues in Southeast Asia and the Middle East rose by 18%. The company also has a strong presence in China, signing a coating supply contract for 80 vessels to be constructed at Dayang Shipyard on the Yangtse River. Hempel of Denmark, another player in marine and protective coatings, posted a 57% growth in operating profit to €96 M on a 19% sales growth to €927 M. Coatings World, Apr 2008, 13 (4), 18-19
17-18 June 2008
Hands-on Powder Coating Workshop Wagner Systems Inc, Elgin, Il, USA The Powder Coatings Institute (PCI) Website: http://www.powdercoating.org
24-26 June 2008
Asia Pacific Coatings Show Convention Centre, Kuala Lumpur, Malaysia Mr Jeff Montgomery, APCJ/PPCJ, 120/130 Station Road, Redhill RH1 1ET, UK Tel: +44 (0)1737 855078 Fax: +44 (0)1737 855034 E-mail: [email protected]
Focus on Powder Coatings (ISSN 1364-5439) is published monthly by Elsevier Ltd, Block 6, Westbrook Centre, Milton Road, Cambridge CB4 1YG, UK. 2008 annual subscription rate: US$1068/€954 (in Europe)/¥126,800 (in Japan) Material published in Focus on Powder Coatings includes abstracts sourced from Chemical Business NewsBase (CBNB) (E-mail: [email protected]) CBNB is available as part of a subscription to Ei’s EngineeringVillage discovery platform. Visit our website for more details: http://www.ei.org Orders and enquiries Elsevier Ltd, Block 6, Westbrook Centre, Milton Road, Cambridge CB4 1YG, UK. Tel: +44 (0) 1223 463160. Fax: +44 (0) 1223 463169. E-mail: [email protected] For US orders Elsevier Journals Customer Service, 6277 Sea Harbor Drive, Orlando, FL 32887-4800, USA. US Customers Tel: +1 (877) 839 7126. Fax: +1 (407) 363 1354. Customers outside US Tel: +1 (407) 345 4020. Fax: +1 (407) 363 1354 Other Locations Elsevier Customer Support Department, PO Box 211, 1000 AE Amsterdam, The Netherlands. Tel: +31 20 3853757. Fax: +31 20 4853432. E-mail: [email protected]
Permissions may be sought directly from Elsevier Global Rights Department, PO Box 800, Oxford OX5 1DX, UK. Tel: +44 (0) 1865 843830. Fax: +44 (0) 1865 853333. E-mail: [email protected]. You may also contact Global Rights directly through Elsevier’s home page (http://www.elsevier.com), by selecting ‘Support and Contact’, then ‘Copyright and Permission’. Derivative Works Subscribers may reproduce tables of contents or prepare lists of articles including abstracts for internal circulation within their institutions. Permission of the publisher is required for resale or distribution outside the institution. Permission of the publisher is required for all other derivative works, including compilations and translations. Electronic Storage or Usage Permission of the publisher is required to store or use electronically any material contained in this journal, including any article or part of an article. Contact the publisher at the address indicated. Except as outlined above, no part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the publisher. Notice No responsibility is assumed by the Publisher for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any methods, products, instructions or ideas contained in the material herein. Typeset by Chat Noir Design, France Printed by Mayfield Press (Oxford) © 2008 Elsevier Ltd. All rights reserved
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businesses, which do not fit in with the accelerated strategy, would be carved out and divested. This process started at the end of 2007. The carve-out is on schedule and is expected to be completed by mid 2008, with the divestment process for the major part commencing thereafter. During 1Q 2008, DSM announced the intended sale of DSM Special Products to Arsenal Capital Partners. The sale is expected to close in 2Q 2008, subject to regulatory approvals.
the Mahindra-Renault-Nissan facility that will be built near Chennai and the MahindraRenault plant in Maharashtra. Japanese firm Nippon Paints is establishing facilities in Delhi and Chennai. A bar graph illustrates regional automotive OEM coatings markets and their growth rates in 2006-2007.
DSM Interim Report 1Q 2008, 29 Apr 2008, 7-8 (DSM, PO Box 6500, 6401 JH Heerlen, The Netherlands, tel: +31 45 578 2422, fax: +31 45 574 0680, website: http://www.dsm.com)
Several mergers and acquisitions within the paint industry were completed in 2007, with about 24 paint transactions in the USA alone. These transactions ranged from million dollars management buyouts to multi-billion dollar investments by industry majors. The three leading acquirers were PPG, Sherwin-Williams and Akzo Nobel. In 2007, PPG launched bids to acquire SigmaKalon and Barloworld, and closed the purchase of Champion Coatings. The acquisition of Champion has allowed PPG to build up its market share in transportation coatings. Sherwin-Williams completed two major buyouts in 2007. The MA Bruder purchase included approximately $150 M in sales of architectural coatings. Sherwin-Williams’ merger deal with Columbia Paint & Coatings will allow the company enhance its foothold in the northwest USA. Akzo Nobel bought Ceilcote and Chemcraft in 2007. The Chemcraft acquisition bolstered Akzo’s presence in the North American wood coatings market. Akzo is able to strengthen its position in the protective coatings market with the purchase of Ceilcote. Other notable paint related acquisitions are discussed.
Automotive OEM coatings market The global automotive OEM coatings market was valued at about $8.971 bn in 2007, according to Chemark Consulting. The three largest markets were North America, Western Europe and Japan, making up a combined $7.3 bn of the sector. China, India and Eastern Europe represent a small portion of the global automotive OEM coatings market, but they demonstrated the highest growth rates. In 2007, China achieved a double-digit growth of 11.5%, India posted an 8.2% growth rate and Eastern Europe, led by Russia, recorded 5.5%. Information Research predicts Russia’s automotive OEM coatings market will expand by a maximum of 30%/y from its current level of approximately 50,000 tons. This will be driven by the expected increase in car production in the country from 165,000 units in 2004 to 900,000 by 2010. To take advantage of the flourishing Indian automotive sector, paint companies are setting up production bases in the country. Korea Chemical Co (KCC) is constructing a site in Sriperumbudur near Chennai, close to the Hyundai Motors plant. Asian PPG is setting up a facility in Sriperumbudur, to service Hyundai as well as tap
Coatings World, Mar 2008, 13 (3 (part 1)), 28,30,32-33
2007 M&A review
Coatings World, Mar 2008, 13 (3 (part 1)), 34-35
Sales growth expected to slow in 2008 Sales of paint companies are expected to experience a slump 7
F O C U S
O N
EVENTS
in 2008 because of the slowdown in the world economy. However, their counterparts in Western Europe remain optimistic that the sort of recession lurking in the USA will not happen to them. Strong economic growth in Eastern Europe, especially in Russia, will also significantly bolster the prospects of paint companies in the region. Strong demand in Asia will also help companies with worldwide sales presence. For example, Akzo Nobel generated substantial sales growth in industrial coatings in
POWDER
Asia, Russia and the rest of Eastern European countries in 2007. Coatings sales grew by 5% to $6.5 bn while earnings before interest, tax, depreciation and amortization increased by 12% to €737 M. Sales of paint at ICI, which was acquired by Akzo Nobel in Jan 2008, grew by only 3% in 2007 due to a drop in demand for decorative coatings in the USA during 2H 2007. Jotun of Norway, which is mainly focused on shipbuilding and oil and gas projects, posted a 25% increase in operating profit.
C OAT I N G S Revenues in Southeast Asia and the Middle East rose by 18%. The company also has a strong presence in China, signing a coating supply contract for 80 vessels to be constructed at Dayang Shipyard on the Yangtse River. Hempel of Denmark, another player in marine and protective coatings, posted a 57% growth in operating profit to €96 M on a 19% sales growth to €927 M. Coatings World, Apr 2008, 13 (4), 18-19
17-18 June 2008
Hands-on Powder Coating Workshop Wagner Systems Inc, Elgin, Il, USA The Powder Coatings Institute (PCI) Website: http://www.powdercoating.org
24-26 June 2008
Asia Pacific Coatings Show Convention Centre, Kuala Lumpur, Malaysia Mr Jeff Montgomery, APCJ/PPCJ, 120/130 Station Road, Redhill RH1 1ET, UK Tel: +44 (0)1737 855078 Fax: +44 (0)1737 855034 E-mail: [email protected]
Focus on Powder Coatings (ISSN 1364-5439) is published monthly by Elsevier Ltd, Block 6, Westbrook Centre, Milton Road, Cambridge CB4 1YG, UK. 2008 annual subscription rate: US$1068/€954 (in Europe)/¥126,800 (in Japan) Material published in Focus on Powder Coatings includes abstracts sourced from Chemical Business NewsBase (CBNB) (E-mail: [email protected]) CBNB is available as part of a subscription to Ei’s EngineeringVillage discovery platform. Visit our website for more details: http://www.ei.org Orders and enquiries Elsevier Ltd, Block 6, Westbrook Centre, Milton Road, Cambridge CB4 1YG, UK. Tel: +44 (0) 1223 463160. Fax: +44 (0) 1223 463169. E-mail: [email protected] For US orders Elsevier Journals Customer Service, 6277 Sea Harbor Drive, Orlando, FL 32887-4800, USA. US Customers Tel: +1 (877) 839 7126. Fax: +1 (407) 363 1354. Customers outside US Tel: +1 (407) 345 4020. Fax: +1 (407) 363 1354 Other Locations Elsevier Customer Support Department, PO Box 211, 1000 AE Amsterdam, The Netherlands. Tel: +31 20 3853757. Fax: +31 20 4853432. E-mail: [email protected]
Permissions may be sought directly from Elsevier Global Rights Department, PO Box 800, Oxford OX5 1DX, UK. Tel: +44 (0) 1865 843830. Fax: +44 (0) 1865 853333. E-mail: [email protected]. You may also contact Global Rights directly through Elsevier’s home page (http://www.elsevier.com), by selecting ‘Support and Contact’, then ‘Copyright and Permission’. Derivative Works Subscribers may reproduce tables of contents or prepare lists of articles including abstracts for internal circulation within their institutions. Permission of the publisher is required for resale or distribution outside the institution. Permission of the publisher is required for all other derivative works, including compilations and translations. Electronic Storage or Usage Permission of the publisher is required to store or use electronically any material contained in this journal, including any article or part of an article. Contact the publisher at the address indicated. Except as outlined above, no part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the publisher. Notice No responsibility is assumed by the Publisher for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any methods, products, instructions or ideas contained in the material herein. Typeset by Chat Noir Design, France Printed by Mayfield Press (Oxford) © 2008 Elsevier Ltd. All rights reserved