AkzoNobel opens $385m base

Dutch firm AkzoNobel is now in a "very good position" to do business in China compared with North America and some European countries, says Chief Executive Officer Hans Wijers. [Photo/China Daily]

NINGBO, Zhejiang - Dutch coatings and chemicals company AkzoNobel opened a 275 million euro ($385 million) manufacturing base in Ningbo on Monday to boost its portfolio in the Chinese market.

The project, which is also the company's largest single investment, is expected to produce chemical products for industries including construction, cleaning, food preservation, oil, personal care and pulp.

A substantial part of the project's products will be for the Chinese market, which is one of the fastest-growing for AkzoNobel, said Hans Wijers, chief executive officer of the company.

The opening of the manufacturing site "shows how committed we are to expanding organically in the exciting and vibrant Chinese market", Wijers said.

AkzoNobel also recently announced its medium-term targets, which include achieving total revenue of 20 billion euros in about five years.

As for China, the company aims to double its sales revenue to $3 billion in the meantime.

The Ningbo project "underlines the fundamental role new investment will play in those growth ambitions", Wijers said.

The Netherlands-based company will continue to add manufacturing facilities in China and some of the facilities will go toward the western regions of the country, Wijers said.

The company will also attach increasing importance to research and development (R&D) in the country.

"We not only produce in China, but also make innovations in the country," he said.

Eleven percent of AkzoNobel's global R&D resources are now based in China. Its technology center in Songjiang in Shanghai municipality is also a "global center for excellence" of the company, he said.

But the company will not exclude mergers and acquisitions opportunities in the market, he said. The company acquired Changzhou Prime Automotive Paint Co Ltd (Prime) in September to increase its presence in the market.

Based in Jiangsu province, Prime develops, manufactures, markets and distributes automotive coatings, primarily for the refinishing market.

Compared with Western countries, China's chemical market is still fragmented. "This is good and challenging news for us," Wijers said.

Admitting that the Chinese market is very competitive, Wijers said the company is now looking forward to many opportunities.

"There is no fairytale market in the world. Compared with North America and some European countries, we are now in a very good position to do business in China," he said.

AkzoNobel has 27 manufacturing sites in China, with revenue for 2009 totaling $1.5 billion. The company currently employs about 6,500 people in the country.

AkzoNobel said in October its third-quarter net profit rose by 20.8 percent due to strong demand in its chemicals business. The company posted a net profit of 238 million euros for the quarter, compared with 197 million euros a year earlier.

The company's sales rose 12.9 percent to 3.87 billion euros due to growth in emerging markets.