Industrial Activities

Rob Molenaar
 Industrial Activities
Sales 1,740 mln
8,000 employees
Akzo Nobel’s Industrial Activities

ƒ Industrial Finishes
– Wood Coatings

– Coil Coatings

– Specialty Plastics Coatings

ƒ Powder Coatings

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 Our Unique Strengths

ƒ Customer focus

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 Powder Coatings – Markets and Products

ƒ Global presence, global brands, global customers

Production Sites

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 Powder Coatings – Markets and Products

ƒ Focussed approach: 8 Global Market Segments

Appliance Automotive

General
Architectural Industrial Functional
General Trade Furniture I.T.
Coaters

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 Powder Coatings - Market Position

ƒ Market Shares
– Akzo Nobel global market share 15%
– Nearest competitor 9%

ƒ Major competitors
– Du Pont , Rohm & Haas

ƒ Industry Consolidation
– Top 3 market share 30%
– Top 10 market share 45%

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 Powder Coatings - Strategy

ƒ Expansion of Global Position

ƒ Adding Value in Mature Markets

ƒ Cost leadership

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 Delivering on Strategy -- Growth
ƒ Match capacity with market movements

ƒ East Europe

– Build capacity in East to match

movements of OEMs

ƒ West Europe

– Continued growth from liquid –

powder conversions

– Re-tool for rapid service

-3%
– Restructure

8%

15%

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 Delivering on Strategy -- Growth

Expansion of Global Position 2004-2006

ƒ China:

– Acquired JV

– New plants Langfang / BaoAn / Chengdu

ƒ E Europe:

– New plant Russia, expansion Turkey , Czech rep

ƒ Americas:

– Mexico JV

ƒ M East:

– JV Egypt, planning plant Dubai

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 Delivering on Strategy– Growth

ƒ Akzo Nobel Powder Coatings Sales Growth

170
LE
160 Purchase of Ferro
Sales Value Index

150 (US/Asia)
(1999 = 100)

140
130
120
110
100
90
1999 2000 2001 2002 2003 2004 2005 2006

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 Delivering on Strategy–Adding value

ƒ The Cromadex concept

ƒ Interpon Express

Express
General Trade Coater, General Industrial sectors 11
 Delivering on Strategy–Cost Leadership

ƒ Western Europe
– Operating in single virtual factory

ƒ USA
– Consolidation into Nashville

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 Delivering on Strategy

IT Auto Func Arch Furn GTC GI App

Global co-
ordination
Product
Development
Specifications
Approvals
Color and
Fashion
Small Order
Rapid Supply
Selling to small
customers
Services

Selectivity &
Weeding
Low cost
formulations
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 Growth Opportunities – Global Market

1200
’02 to ’05
CAGR = 6.7%
1000

800 ‘90 to ‘00

CAGR = 9% pa
‘000 Tonnes

600

‘80 to ‘90
400 CAGR = 12% pa

200

0
'80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08

Global Market Volume 2005 (Euromonitor) = 1,050,000 tonnes

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2006 – 2008: Forecast, Coatings World
 Growth Drivers – Regional Markets

ƒ Forecast Growth Rates

– East Europe 18% pa
– Asia Pacific 12% pa
– NA/EW 3.5% pa

ƒ Drivers
– Global GDP growth

– Growth export driven China, India

– Continued liquid to powder conversions

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 Growth Opportunities - Innovation

ƒ Innovation and Patents

– Patents

– 32 active families of patents (485 individual patents)

– Approx 3 new filings per year

– Innovations

– Thin film technology

– UV / IR technology for temperature-sensitive

substrates

– Mixing powders like liquids

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 Our Unique Strengths

Patented products for non-stick cookware,

free of hazardous materials

Insulating products for wind

turbine motors &hybrid car engines

Patented zinc-free anti-

corrosion technology
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Without active primer With active primer
 Our Unique Strengths
Clean
Global
Anti-bacterial powders for Supplying OEMs with identical
hygienic surfaces products no matter where they
are located

Colourful

Unique color concepts for

designers & architects

Color warranties up to 20
years on buildings 18
 Looking ahead

ƒ Strong price competition in Asia –

Unique position to realize cost savings and synergies

ƒ Further declines in Western “bulk” markets –

Continue to grow in East Europe / Asia

ƒ Continued industry globalization –

Unique global position to capitalise on

ƒ Further consolidation of Powder Manufacturers –

Focussed and disciplined use of acquisition opportunities

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Fit For the Future

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