SHANGHAI - The paint and coatings giant Akzo Nobel NV said on Thursday that it will set up more manufacturing facilities in China as part of a plan to double revenue by 2015.
Annually, the Netherlands-based company will use four percent of its revenue - between 600 and 700 million euros ($1,007.78 million) - to build new facilities globally.
Half of that sum will go to high-growth markets, mostly in China, said Hans Wijers, chairman of Akzo Nobel, the world's biggest paintings and coatings maker by market share.
Although he declined to reveal detailed financial plans, Wijers said that China will definitely be an "important destination" for the company's investment in new manufacturing facilities and research and development (R&D) centers.
At present, a 60-million-euro facility for the production of paint and building-material thickeners is under construction in Ningbo, Zhejiang province, with production on track to start in 2013.
Last year, a 275-million-euro multi-site was inaugurated in the same city.
Akzo Nobel currently has 27 manufacturing locations in China, which holds 11 percent of its total R&D resources.
The company said earlier this year that revenue in China will reach $3 billion in 2015, up from $1.7 billion in 2010.
The announcement came after Akzo Nobel saw its business grow 25 percent in China in 2010.
The company has a broad strategy to raise global revenue to 20 billion euros by 2015, up from 14.6 billion euros in 2010.
"Clearly China will play a key role in our business going forward. We are very optimistic about our growth prospects there," said Wijers.
Developing middle-class clients in China's mid-market will be one of source of revenue growth for the owner of the Dulux premium paint brand, he added.
As China's biggest paint and coatings maker, Akzo Nobel is currently focused on selling up-market products, but mid-market expansion will be made through both mergers and acquisitions and organic growth, said Wijers.
Last year, the company acquired Changzhou Prime Automotive Paint Co Ltd, one of China's largest suppliers of goods for vehicle refinishing and a leader in the fast-growing mid-market segment.
"Prime is indeed an example of an acquisition that gave us an immediate position in the mid-market of the car-refinishing market ... and I don't want to exclude that we will do that (acquisitions) more often," said Wijers.
However, he added that acquisitions are not a prerequisite, the company will also grow organically in the fast-growing mid-market.
Akzo Nobel will greatly increase the number of Dulux stores in China's inland cities - 1,000 were opened nationwide in 2010 - to cater for an increasing number of middle-class clients.
