Coatings - AkzoNobel

COATINGS
Sales of lnterpon® Powder Coatings showed strong
growth over 1997, despite particularly difficult trading
conditions in Asia and South America. Good progress
was made in the domestic appliance market, where
patent-protected thin film lnterpon® XTR powders
became available from lnterpon’s worldwide network of
class A production plants, and helped secure global
supply contracts with a number of major international
appliance manufacturers. In the architectural sector,
penetration was assisted by our superdurable polyester
powders, which are based on in-house resin technology.
Projects included the prestigious new Hong Kong
airport. Progress continued also with the Particle
Managed Powder program, which was successfully
extended to the industrial sector, where the cost
savings made possible by Intern AF, an advanced
fluidity powder coating, proved attractive to customers.
Coil
In Europe and Asia Pacific the unit is a major producer
of coil coatings for the protection of steel strip used for
buildings and appliances. The activities in Europe are
conducted by a joint venture with Nippon Paint,
Akzo Nobel Nippon Paint. The Asia Pacific operations of
former Courtaulds are fully owned. Since its foundation
in 1993, the coil business has grown strongly, both
organically and through the acquisition in 1995 of the
market leader in Germany, Mehnert & Veek. The
integration of these activities into the business unit
Industrial Finishes will significantly improve our position
in this market.
Performance in 1998 was adversely affected by the
strong sterling, poor demand in Russia, and increased
imports of cheap Asian coated steel into Europe. Even
so, volumes were up slightly. Prices, however, came
under pressure, resulting in lower sales and earnings.
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AEROSPACE COATINGS AND SEALANTS*
Full-year sales NLG 460 million (1997: NLG 410 million)
Market share further improved
Continued strong growth marked the performance of
the Aerospace Coatings and Sealants business, which is
the established global leader in both markets. Market
share again improved as a result of the introduction of
new products and geographic expansion.
A new high-solids, high-performance exterior coatings
system under the brand name Desothane HS® for the
commercial airliner, general aviation, and military
aircraft markets was successfully introduced.
Lightweight PRC brand aerospace sealants, based on
our proprietary Permapol® polymers, have been
specified for all Boeing and Airbus aircraft models.
Geographic expansion, particularly in Asia, the Middle
East, and Africa, has resulted in new airline customers
specifying our products.
* The European Commission decided on June 30, 1998, to clear the
acquisition of Courtaulds Plc. by Akzo Nobel UK Holdings Plc.
(Akzo Nobel). Akzo Nobel has given an undertaking, as a condition
of the clearance, to divest the worldwide former Courtaulds
Aerospace Coatings and Sealants Business or, as an alternative
undertaking, Akzo Nobel’s 60-percent interest in the Akzo Nobel
Dexter Aerospace Finishes Joint Venture (ADAF) to Dexter
Corporation, which already owned the remaining 40 percent.
Pending the completion of either of these divestments the
Aerospace Coatings and Sealants Business should be operated
independently from the ADAF Business under a trusteeship in order
to avoid the possibility of market coordination. Accordingly, the
Aerospace Coatings and Sealants Business was placed under the
trusteeship of Credit Suisse First Boston (CSFB). The alternative
undertaking was abandoned in December 1998. Subsequently, in
January 1999 Akzo Nobel acquired Dexter’s 40-percent
participation in ADAF. CFSB is currently proceeding with the
divestment of the Aerospace Coatings and Sealants Business (as
from January 1999 trading as PRC–DeSoto) on behalf of
Akzo Nobel in order to give effect to Akzo Nobel’s undertaking.