COATINGS Sales of lnterpon® Powder <strong>Coatings</strong> 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. 42 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 <strong>Coatings</strong> 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 <strong>Coatings</strong> 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 <strong>Coatings</strong> 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 <strong>Coatings</strong> 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 <strong>Coatings</strong> 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.
Responsible in Board of Management: Rudy M.J. van der Meer Ove H. Mattsson (alternate) Group Director Technology: Conrad S. Kent Business Units: Pulp & Paper Chemicals Functional Chemicals Surface Chemistry Polymer Chemicals Base Chemicals Catalysts Plastics and Processing Additives Salt Energy Chemicals General Managers: Dag Strömqvist Simon J. Vogelaar Jan Svärd Arend-Jan Kortenhorst H.C.J. (René) Scheffers W.W. (Jon) Meijnen Kees van Nierop Floris A. Bierman Gert N. van Ingen
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