Akzo Nobel Car Refinishes
Car Refinishes general MANAGER
Car Refinishes is one of the world’s leading suppliers of paints and services for the car repair, commercial vehicles and automotive plastics markets. It sells coatings for car body refinishing, or recoating, to customers including bodyshops, distributors, fleet owners, automotive suppliers and major bus and truck producers. Brands include Sikkens®, Lesonal®, Dynacoat®, Wanda®, and Autocoat® BT. Operating in more than 60 countries, Car Refinishes has specialists around the world who understand local markets and can serve local needs. Its state-of-the-art customer services, color and technology solutions include offering technical and logistical support and the delivery of training programs.
How would you summarize your business’ 2007 performance?
All but one of our activities and regions experienced growth in revenue and profit, generally outperforming the markets. We improved return on invested capital, while operating costs were well under control. We effectively managed our raw material costs, primarily through value engineering, although we saw some pressure. There was one important exception, however. Our Commercial Vehicles activities in North America – which is a cyclical business – suffered a decline in revenue after being impacted by lower unit builds from some of North America’s largest truck and transportation equipment makers.
Can you put a geographic perspective
on the year’s results?
On the Car Refinishes side, we beat the markets in both Asia and the EMEA (Europe, Middle East and Africa) region. Good growth was also achieved in South America and we were very strong in India. Within Automotive Plastic Coatings (APC), Europe turned in a record year, while the Americas region outperformed the market in our largest segment, which is bodyshop collision repair. Throughout EMEA – particularly in Western Europe – APC’s focus on its strategic customers has proved effective.
Did any of your product brands have a particularly good year?
Our Sikkens® brand continued to get even stronger. It grew in all regions, boosted by the business’ best-in-class color matching and technology capabilities. Sikkens® Autoclear® LV Superior became a trendsetter with its low level of VOCs and unmatched performance; while Sikkens® Autoclear® UV continued to lead the market in low energy, high speed curing technology. The widening acceptance of our Sikkens® Autowave® waterborne basecoat also boosted the brand’s 2007 performance.
Were there any other key developments?
A key aspect of our refinish business is the focus on creating a best-in-class global approach to key account management with the automobile makers. This clearly paid off for us in 2007 because it resulted in a record number of aftermarket approvals with car makers worldwide. We also opened a number of new facilities, including a polymer research center and a waterborne production unit, both located in Sassenheim, the Netherlands. In addition, we installed a new automatic dispensing unit at Pontiac, Michigan, in the United States, which allowed us to complete the closure of the North Brush plant. We were busy in India as well, doubling the size of our research facility in Bangalore in order to create a world class product development and color technology center. Other notable events included rolling out our waterborne basecoats in Canada and California; the launch of the Wanda® brand in the United States; and the presentation of a State Quality Award to our APC plant in Garcia, Mexico.
How will you continue to drive the renewed growth of the business?
One of the things that makes us unique is that we’re the only leading global supplier of vehicle refinishing products that does not have an OEM supply position for automobiles. Our primary focus is on the aftermarket and we are extremely skilled in key areas such as focusing on color and technology and marketing differentiation. For example, getting color matched in the aftermarket involves a lot of process steps and the more complexity you can take out of that process the better. We help our customers identify the color, mix it and spray it, so they get it right first time. So we will continue to concentrate on marketing our capabilities in the vehicle refinish business because they clearly mark us out as the suppliers most capable of improving our customers’ operations, resulting in the profitable growth of our business.
Can you say anything about your product pipeline?
We’re finalizing the development of a new UV primer, a low VOC (volatile organic compounds) basecoat, and a HAPs (hazardous air pollutants) free basecoat. We are also using the latest techniques to measure and digitize color so that we can use that data all over the world. We believe our expertise in color and color measurement is where we set ourselves apart, it’s a key differentiator, and we’re always looking to further improve our technological know-how.
What is being done to further increase the business’ environmental efforts?
There are developments ongoing relating to renewable feedstocks. Work is also continuing to remove VOCs and HAPs from our products. The increasing acceptance of our Sikkens® Autowave® waterborne basecoat in Europe – and its launch in Canada and California – underlines the value the market puts on this particular technology, and by end of 2007 we converted nearly all our collision repair customers in the EU to waterborne basecoats. This move towards a greener industry is something we have helped to pioneer to a certain extent and we will continue to ramp up our efforts in this field.
The perfect match
2007 was a record year for Akzo Nobel’s Car Refinishes business in terms of the number of aftermarket approvals – both technical and commercial – secured with car makers worldwide. (The term aftermarket simply refers to sales and services relating to a vehicle following its emergence from the production line, such as collision repair – car refinishes’ main market). These approvals came from some of the biggest names in the industry, including Toyota, GM, Ford, Hyundai, and Skoda.
A key factor in this notable success has been the strategic focus on creating a best-in-class approach to global key account management. To drive this process, the business puts significant emphasis on effectively marketing its capabilities to the industry’s major players. In fact, Car Refinishes was the first in the industry to successfully align cross-functional resources, coordinate activities and provide standardized processes on a global basis – while at the same time delivering value propositions locally anywhere in the world – for its key customers.
What’s also remarkable about Car Refinishes is the unique nature of its operations. It’s the only leading supplier of vehicle refinishing products (number three globally) which does not have an OEM (original equipment manufacturer) supply position for automobiles. In other words, the business does not supply coatings for new cars, but is the third biggest worldwide in repainting them. Commanding such a distinctive position requires expertise and cutting-edge technology, not to mention skillful management and top class marketing ability, all of which is embodied in the highly successful key account management philosophy.