1. Akzo Nobel Coatings NV/SA
Estimated 2002 global coatings sales: $5.789 billion
Akzo Nobel, the largest coatings company in the world with about 8% share, is a global leader in coatings, chemicals and healthcare products. It is active in all parts of the coatings industry and in all parts of the world. Its recent acquisition of Ferro?s powder coatings business in the Americas strengthened its international powder coatings holdings. The company is a major supplier of coil and wood coatings in the United States. North American coatings sales are estimated at $1 billion.
Akzo Nobel acquired Ferro?s powder coating business in September 2002, giving the company ?a credible number three position in a U.S. market which still has room to mature as customers reinvest in facilities and move from liquid to powder,? the company reports in its 2002 annual report.
In March, Akzo Nobel announced the opening of its new powder coatings factory in Ho Chi Minh City, Vietnam. With joint venture partner Chang Cheng Securities, the company was the first to invest in powder manufacturing in Vietnam. The facility is the company?s 12th powder coatings site in the Asia Pacific region.
?The acquisitions in Asia reinforce our number-one position in the fastest growing powder markets in the world,? the company says.
Last October, Akzo Nobel announced the purchase of a 50% stake in leading Mexican powder coatings producer Industrial de Acabados S.A. de C.V. (INDA). The new joint venture company, Akzo Nobel INDA S.A. de C.V., will manufacture and market powder coatings products under the global Interpon Powder Coatings brand from the existing INDA facilities in Monterrey. ?Mexico continues to grow in importance as a key industrial manufacturing base within the North American Free Trade Agreement, and this investment will open up significant opportunities for us,? says Rudy van der Meer, member of Akzo Nobel?s board of management responsible for coatings.
?Many of our international customers have located their manufacturing in Mexico,? says Bill McPherson, general manager of Akzo Nobel?s powder coatings business unit. ?This investment reflects one particularly important aspect of our global strategy, which is to supply our customers with the powder coatings products and services that they need, wherever they operate.?
In marine and protective coatings, 2002 was another year of strong performance for the company, with growth in sales and operating income across all market sectors and geographic regions, the company reports. Marine coatings benefited from a high level of new building, particularly in China and Korea.
2. PPG Industries Inc.
Estimated 2002 global coatings sales: $4.482 billion
PPG is a major global coatings company and the largest producer worldwide of transportation coatings. It also has a global position in metal packaging coatings. In the United States, PPG has a very strong position in almost all segments of the coatings industry. Coatings represent 56% of corporate sales; glass and chemicals make up the rest of the sales. North American coatings sales are estimated at 70% of the total coatings sales. PPG operates 51 manufacturing plants, 30 of which manufacture coatings in North America.
PPG?s CeramiClear clearcoat received a 2003 PACE Award, marking the fourth consecutive year the company has won recognition from the program that honors product innovation among automotive suppliers worldwide. It?s the first automotive clearcoat to use nanoparticle technology, which creates a highly crosslinked network at the surface of the coating for superior resistance to damage caused by everyday use, as well as a glossy appearance. Developed in conjunction with Mercedes-Benz during a three-year period, CeramiClear commercialization began in August 2002 at the Sindelfingen, Germany, plant.
In May, PPG received an Innovation in Occupational and Environmental Health Grant of $25,000 to help implement its program to improve the early diagnosis, treatment and management of depression for employees, retirees and family members. PPG joined Johns Hopkins University as the only organizations to receive the grant, which is sponsored by the Occupational and Environmental Health Foundation, the American College of Occupational and Environmental Medicine, and Pfizer Inc., a pharmaceutical company. Eliminating the stigma that can accompany depression is part of PPG?s program.
PPG announced in July that PPG Total Service Solutions was awarded chemicals management programs at three GM Corp. plants to help the automaker reduce the total costs associated with managing indirect chemicals and product vendors. At each site, PPG provides a fulltime, on-site chemicals management staff, including a chemical manager who acts as a single point of contact and supervises the Tier Two vendors.
In January, PPG earned ISO-14001 certification for its coatings manufacturing facilities around the world. It took PPG two years to earn the certification, one year less than expected.
Estimated 2002 global coatings sales: $4.096 billion
Sherwin-Williams is the dominant architectural coatings producer and marketer in North America. It is estimated that about 79% of sales represent coatings sales. With more than 2,800 company-owned paint stores, and branches in North and South America, the company maintains a strong position in DIY consumer and contractor sales and automotive finishes. In addition to the main brand, ?Sherwin-Williams,? the company sells coatings under many other brand names through other paint outlets. In the special-purpose coatings market, the company has strong positions in industrial-maintenance coatings, auto refinish, traffic marking and aerosol paints. Sherwin-Williams operates 50 manufacturing plants, 38 in North America.
For The Sherwin-Williams Co., 2002 was a solid year, the company reports in its 2002 annual report. ?After 2001 did not measure up to our expectations, we were determined to return our company to a high level of financial performance,? the report says. ?Our efforts this past year resulted in strong cash flow and a substantial improvement in operating income on a moderate sales increase.? Net sales for the year grew 2.3%. Diluted income per common share before an accounting change reached a new high of $2.04 per share, a 21.4% increase over a year earlier. The company was ranked in the top 10 of 404 companies evaluated in an October 2002 study by Money magazine that measured ?earnings quality.?
4. ICI Paints
Estimated 2002 global coatings sales: $3.511 billion
ICI is a leading international paint business with particularly wide geographic spread, selling in more than 120 countries. It specializes in architectural (91%) and metal-container coatings (9%). The consumer decorative paint business has one of the leading market shares in most countries where it operates. In North America, paint sales amount to an estimated $1.5 billion. ICI has 49 manufacturing plants in 25 countries.
Early this year ICI announced the first stage of a new restructuring program. According to ICI, ?The paints program involves intensive productivity improvements at each of the 10 main manufacturing sites across Europe, including rationalization of solventborne production facilities and restructuring of all European supply chain support functions to take overall supply chain productivity to world-class levels. By completion, the program will have reduced headcount by some 460, out of a global [paints business] workforce of 15,740, and realized a savings of 16 million pounds.?
ICI also announced early this year that it had improved its ranking in the seventh annual index on the way UK companies manage environmental matters. Within the Business in the Environment rankings, ICI moved from 48th position in 2001 to 20th in the list of 168 participating companies in 2002. ICI?s average score improved from 87% to 94%, and the company was ranked second in its industry group. The index is a voluntary benchmarking tool for companies to evaluate their own performance and compare it with peer companies.
5. DuPont Coatings & Color Technologies Group
Estimated 2002 global coatings sales: $3.150 billion
DuPont Coatings and Color Technologies Group is the world?s leading automotive coating supplier. DuPont offers high-performance liquid and powder coatings for the automotive OEM and aftermarket and general industrial OEM applications, as well as high-performance specialty products. Sales of coatings in North America are estimated at $1.500 billion. The company has plants in 30 countries.
In July, DuPont Performance Coatings and Beijing Red Lion Coatings Co. Ltd. (Beijing) announced that the two companies had signed agreements forming two automotive coatings joint ventures, one in Beijing and the other in Changchun, China. Both ventures will have a share distribution of 60% DuPont and 40% Red Lion. Operations had already begun when the announcement was made.
The joint annual capacity of the plants started at 20,000 tons of paint, which will initially be used by the Chinese automotive industry. ?As one of the fastest-growing automotive markets in the world, China will play an increasingly important role in our future business plans,? says John Lewis, vice president, DuPont Performance Coatings Asia Growth Initiatives. ?Almost all international automotive manufacturers are planning major investments to increase production in China, which already has exhibited stable, double-digit annual growth rates. A major share of this growth will be generated by the Chinese operations of our current global customers?that are seeking reliable local production of high-quality paint.?
The science behind DuPont Supersolids ultra-low emissions coatings earned the EPA?s Clean Air Excellence Award, which was presented at a ceremony in March. SuperSolids clearcoat lowers VOC emissions by 25%, while also improving scratch and mar resistance 60% for automotive finishes, the company says. The first commercial application of the clearcoat is on the 2002-2003 Dodge Durango, produced at the Daimler-Chrysler Newark, DE, assembly plant.
6. BASF Coatings AG
Estimated 2002 global coatings sales: $2.241 billion
BASF is the world?s leading chemical company, with other products including plastics, coating systems, dispersions, agricultural products, fine chemicals, crude oil and natural gas. Total corporate sales were $33.8 billion in 2002. Coating sales include automotive OEM coatings (40% of total), automotive refinish, ?Glasurit? coatings (20%), industrial coatings (25%) and decorative coatings in South America (15%). North American coatings sales for 2002 were 35% of total coatings sales.
The BASF plant in Munster, Germany, is celebrating its 100th anniversary. In its early years, the plant produced products for floors, buildings, machines, cars and ships. In 1925, the plant developed nitrocellulose paints, which enabled paint shops to employ the production-line method for finishing automobiles. The plant currently employs about 2,200 people and supplies automotive OEM coatings, automotive refinish products and other industrial coatings.
In April, General Motors named BASF as Supplier of the Year for exceptional performance as a global supplier of automotive OEM coatings. It was the first time GM has given the award to an automotive coatings supplier.
7. Valspar Corp.
Estimated 2002 global coatings sales: $1.989 billion
The Valspar Corp., in business since 1806, is a multinational coatings manufacturer. The industrial product line includes decorative and protective coatings for wood, metal and plastic substrates. The architectural, automotive and specialty product lines include interior and exterior decorative paints and aerosols, automotive and fleet refinish, and high-performance floor coatings. The packaging product line includes coatings and inks for rigid packaging containers. In the United States, Valspar is strong in all facets of the coatings industry with strong positions in architectural, packaging, coil, wood, powder and refinish coatings. The company has an additional $138 million in sales in resins and colorants used internally and sold to other coatings manufacturers. About 75% of corporate sales are derived in the United States. Valspar has 56 manufacturing plants; 38 are in North America.
The Valspar Corp. reported that its net income for fiscal 2002 was $120,121,000, or $2.34 per diluted share, compared with $51,500,000 or $1.10 per diluted share for 2001. Last year?s comparable diluted earnings per share was $1.87. Sales for the year increased 10.7%. ?In light of this year?s challenging business environment, we are very pleased with our core growth and our full year financial results,? said Richard Rompala, Valspar?s chairman and CEO, in a statement last November. ?While continued softness in the industrial economy constrained the performance of our industrial coatings line, our architectural and packaging coatings product lines generated strong results throughout the year.?
The company reported net income for the first nine months of 2003 was $87,889,000 or $1.70 per diluted share, compared with $85,196,000 or $1.66 per diluted share for the same period a year ago. Sales for the first nine months increased 4.4% to $1,628,920,000, compared to $1,560,085,000 during the comparable period a year ago.
8. SigmaKalon Group BV
Estimated 2002 global coatings sales: $1.782 billion
SigmaKalon is one of the leading worldwide providers of decorative (75% of total sales) and industrial coatings. It is Europe?s premier manufacturer of decorative paints, with a comprehensive range of leading brands and private-label paints. SigmaKalon is also a major worldwide supplier of marine and protective coatings. The company enjoys significant positions in the markets for joinery coatings, coil coatings, as well as general industrial and powder coatings.
In March, SigmaKalon announced that Bain Capital had completed the purchase of the company from its former parent company, TotalFinaElf. ?We believe the increased financial resources and stability will afford us the tools to grow our market share and pursue a variety of promising new business opportunities,? says Pierre-Marie De Leeneer, executive officer of SigmaKalon.
?We have made it our business to identify market-leading companies in Europe with strong upside potential, an approach that led to our partnership with SigmaKalon,? says Walid Sarkis, London-based principal of Bain Capital, which is based in Boston.
Later in March, SigmaKalon and Samsung Fine Chemicals (SFC) announced the signing of a memorandum of understanding on the creation of a joint venture, in which SFC will place its coatings business. SFC will hold a 40% share in the venture and SigmaKalon 60%, through its affiliate, Sigma Coatings. SFC has mainly been active in marine and industrial coatings in Korea.
9. Nippon Paint Co. Ltd.
Estimated 2002 global coatings sales: $1.360 billion
Nippon Paint Co., founded in 1881, is the oldest Japanese coatings company. It is one of the leading suppliers of coatings for architectural, automotive OEM and refinish, and other industrial coatings. It also has powder coating capability. The company has 23 subsidiaries; 16 are in Japan, five in the United States.
Nippon Paint (NP) and International Coatings Ltd. (IC), which is part of Akzo Nobel, in July agreed to terminate their association in marine coatings beginning in November 2004. During their association, the two companies licensed their marine coatings technologies to each other and have cooperated in providing support and services to customers. Transferred technology will remain available to both NP and IC after ending their association. The parties agreed that given geographic changes in the marine industry over the last decade and their desire to expand their individual marine coatings operations, they will operate independently. NP plans to use its own overseas infrastructure to serve Japanese and overseas customers and owners building and maintaining vessels throughout the world, while IC plans to extend its global network by developing its infrastructure in Japan to serve Japanese and overseas customers and owners building and maintaining vessels in Japan.
10. RPM Inc.
Estimated 2002 global coatings sales: $1.284 billion
RPM is a group of companies that operate in the coatings industry. The industrial division, with 53% of sales, includes waterproofing, corrosion control and maintenance coatings; the consumer division accounts for 47% of sales. Of total reported sales, 88% are from North America. Of these, an estimated 65% are actual coating sales. RPM owns Carboline, Tremco, Day-Glo, TCI Powder Coatings, Kop-Coat, Rust-Oleum, Zinsser, Flecto and Testor. RPM operates 62 manufacturing plants in 17 countries; the majority are in North America.
In July, RPM announced that fiscal 2003 was a record year for sales and earnings. Fiscal year net sales grew 5%, while net income increased 21%.
Also in July, the company announced the opening of RPM Europe SA, a new European development office, in Waterloo, Belgium. RPM Europe will mainly be looking to increase RPM?s presence in Europe by seeking and working with local businesses and manufacturing companies interested in joining RPM?s group of companies. In addition, it will provide a marketing support function for a all non-European RPM companies in their efforts to broaden market penetration of their exported product lines throughout Europe.
RPM Europe will also be implementing on a pan-European basis many of the successful North American programs that have allowed RPM companies to gain cost savings by better utilizing their scale economies and purchasing leverage, such as raw material sourcing. It will also attempt to identify futher efficiencies.
TOP 10 in North America
1. Sherwin-Williams Co.
Estimated 2002 North American coatings sales: $3.800 billion
2. PPG Industries Inc.
Estimated 2002 North American coatings sales: $3.137 billion
3. Valspar Corp.
Estimated 2002 North American coatings sales: $1.550 billion
4. (tie) DuPont Coatings & Color Technologies Group
Estimated 2002 North American coatings sales: $1.500 billion
4. (tie) ICI Paints North America
Estimated 2002 North American coatings sales: $1.500 billion
5. RPM Inc.
Estimated 2002 North American coatings sales: $1.130 billion
6. Akzo Nobel Coatings Inc.
Estimated 2002 North American coatings sales: $1.100 billion
7. Benjamin Moore & Co.
Estimated 2002 North American coatings sales: $900 million
8. Behr Process Corp.
Santa Ana, CA
Estimated 2002 North American coatings sales: $800 million
9. BASF Coatings AG
Estimated 2002 North American coatings sales: $784 million
10. Professional Paint Inc.
Lone Tree, CO
Estimated 2002 North American coatings sales: $400 million