AkzoNobel scales up investment
By Le Hoang in HCMC
Despite economic recession, the global paints and coatings company AkzoNobel still commits to boost investment in Vietnam, as well as prioritize innovation to better meet customers’ demand.
|AkzoNobel’s senior executives pose for picture besides the company’s products of the Dulux brand, which is currently dominating the decorative paint market - Photo: Courtesy of AkzoNobel|
AkzoNobel has announced the completion of a major phase of an ongoing plant expansion in Vietnam, which will add momentum to the continued growth of the company’s decorative paints business in South East Asia. Around €13 million has been invested in the production facility in Binh Duong Province in order to optimize operations and help meet growing customer demand in the region.
AkzoNobel Decorative Paints has been continuously investing in the South East Asia region with several plant expansions. The plant in My Phuoc Industrial Zone in Ben Cat District in Binh Duong Province is the latest addition. The Binh Duong Plant was built in September 2007 with an initial investment of €8 million, in a 60,000-square-meter area.
AkzoNobel’s recent investment expansion will greatly boost production capacity of its plant in Binh Duong. Its current decorative paint output of 60 million liters per year is expected to mount to 100 million liters per year when the plant is totally finished in 2016.
Jeremy Rowe, Managing Director of AkzoNobel Decorative Paints for South East Asia & Pacific, notes that besides Indonesia, Vietnam is one of the countries that AkzoNobel invests in heavily in South East Asia because the company believes in the local market’s strong growth potential. The business in Vietnam currently occupies the number one position in decorative paint in the country.
“We believe Vietnam will be an important decorative paints market over the coming years,” he furthers, adding “Decorative paints in general continues to be a fast growing coatings business.”
Vietnam has a young and vibrant population of over 86 million people. Its economy is growing rapidly and the standard of living increases considerably. As people get higher income, they spend more money on decorating their houses, according to the company.
“Last year was a challenging one for AkzoNobel due to inflation and the continuing economic crisis. But, the company showed performance improvement in South East Asia, including Vietnam,” says Rowe. Vietnam is the second biggest market of AkzoNobel in South East Asia, after Indonesia. Last year the company also invested €7.5 million in its plant in Jababeka Industrial Estate-Cikarang, Indonesia, where the Dulux decorative paints brand has been enjoying growing popularity since 1971.
Innovation that meets customers’ needs
Besides expanding business scale, the company confirms that innovation will remain as a growth element for its business policy. Despite the worsening economic conditions, innovation will remain as a major global activity.
Jeremy Rowe says that the Binh Duong plant has cutting-edge technology which leads to high flexibility in the production process through shorter cycle-time. This technology allows a choice of more colors. The new “raw material dosing system” with superior level of accuracy provides better product quality.
Innovation also helps cut energy consumption in line with the company’s sustainability drive. “Besides the expansion of our capacity and production facilities, the level of energy consumed in the production process also becomes lower. This new technology will reduce energy consumption by 20% and reinforce AkzoNobel’s commitment to sustainability, while at the same time providing better quality in our products,” says Rowe.
He also stresses: “Our market share achievement is contributed by the ongoing trust and preference for our brand Dulux – the reward for our commitment in providing the best products for our customers’ needs. Our success has been our focus behind innovation, quality and sustainability. We place much emphasis on research, development and innovation for eco-premium solutions.”
AkzoNobel Decorative Paints has developed and launched several eco-premium products in South East Asia. A popular outdoor decorative paint the company recently introduced is Dulux Weathershield Keep Cool, which adopts heat reflective technology that reduces exterior wall temperatures by up to 5oC as compared to conventional exterior paint.
AkzoNobel has left its footprint in many buildings in Vietnam. These include Thu Thiem Star in Thu Thiem East Residential and Petroland Binh Trung Dong, The Cherry Thanh My Loi, and Thu Thiem Xanh Binh Tri Dong among others.
In 2011, AkzoNobel Decorative Paints in Asia had total revenue of €952 million, an increase of 13% from 2010. The South East Asia business grew faster than the market, cementing its overall number one position in the region.
The Saigon Times Daily