Akzo Nobel Expanding Operations in China with New Coatings Facilities
The company also announced the construction of a new powder-coatings plant in China, with the facility to be located at the company's joint-venture operation Akzo Nobel Chang Cheng Coatings (Beijing) Co. Ltd. The plant will manufacture Akzo Nobel's Resicoat range of specialty fusion-bonded epoxy (FBE) anticorrosion powders for steel pipes used in the oil and gas industry. The start of production is anticipated in the fourth quarter of this year.
"In the past five years, our sales in the country have quadrupled to 300 million euros, stemming from both organic growth and acquisitions," Van der Meer said at a news conference at the new coatings facility at Suzhou. He said the company now employs 1,500 people in China, with 10 production facilities involved in coatings, chemicals and pharmaceuticals. The Suzhou site and a wood-coatings plant to be opened soon are 100% owned by Akzo Nobel.
"These investments aim to strengthen our position in China and will enable us to respond quickly and flexibly to market demands," Van der Meer said. "The facilities will serve as a platform for further expansion in the region." He said a key company objective is market-share gains "in the fast-growing Asian economies, and we consider China a key market."
Van der Meer said the powder-coatings plant is being built in response to growing demand for pipeline materials resulting from China's extensive investment in its infrastructure. "The move reflects our strategy to focus on expanding in growth areas, and will put us into an excellent position to serve the Chinese market," he said.
Bill McPherson, general manager of Akzo Nobel's Powder Coatings business unit, noted that the company has been active in the powder-coatings market in China for more than 10 years, and said the expansion "will position us in all segments. It remains our global strategy to have a significant presence in every region and in every market segment."
Ron Koel, Global Market manager for Functional Powder Coatings, said the company estimates that the global market for pipeline powders is approximately $120 million, with China representing an increasing share that currently stands at about 20%. Several major pipeline projects are under way or planned in China, including the West-East pipeline and the Russia-China-Korea, the Zhong-Wu and the Hainan circle pipelines.
Akzo Nobel said it recently completed a restructuring of its operations in which various joint-venture companies in Taiwan and China have been consolidated into a single venture business with Chang Cheng Chemicals. Akzo Nobel also announced plans recently for a new powder-coatings manufacturing facility in Vietnam, scheduled to open in early 2002.