0

0

Tweet

More

AkzoNobel, PPG and Sherwin-Williams Post Financials

Hello and welcome to your early week international coatings industry update, brought to you by SpecialChem. With major financial announcements, the end of last week was extremely news-heavy, so here we are playing catch up.

AkzoNobel said on Thursday that its second quarter revenue was up due to price increases while volumes were down. Net profit suffered from higher charges for restructuring costs. Akzo Nobel said its Performance Improvement Program is on track and it will give a strategic update upon publication of its third quarter results.

Net profit was down 25% to EUR201 million from EUR268 million. Revenue was up 8% to EUR4.1 billion, driven by pricing actions to offset higher raw material costs and by favorable currency effects. Volumes were down 2% reflecting weaker demand across end markets. Decorative Paints revenue grew 6%, mainly due to favorable price/mix and positive currency effects. Revenue grew in all businesses, with the exception of South East Asia Pacific. In Performance Coatings, revenue increased 12% compared with the previous year. The strongest growth came from Industrial Coatings (due to acquisitions) and Marine and Protective Coatings (from strong demand in Protective Coatings).

In the USA, PPG Industries reported second quarter profit of $362 million versus $340 million a year ago. Adjusted net income for the quarter, excluding nonrecurring charges, was $365 million. Net sales declined to $3.96 billion from $3.99 billion in the prior-year quarter.

"In the second quarter, PPG delivered the highest quarterly earnings per share in company history as a result of continued execution, strong cost discipline and effective cash deployment," said Charles Bunch, PPG Chairman and CEO. "These record earnings were achieved despite significantly weaker European and Latin American currency exchange rates and growth that varied by region and end-use market."

In research news, scientists at Eindhoven University of Technology have developed a coating with a surface that repairs itself after damage. The results were published in the July 17 edition of the scientific journal Advanced Materials.

Researcher Catarina Esteves of the Department of Chemical Engineering and Chemistry at TU/e and her colleagues have developed surfaces with special 'stalks' carrying the functional chemical repair groups at their ends, mixed through the coating. If the outer surface layer is removed by scratching, the 'stalks' in the underlying layer re-orient to the new surface, thereby restoring the function. This development can be of great importance for many applications. For example it will be possible to make a self-cleaning car, with a highly water-resistant coating that keeps this self-cleaning property for long periods. The superficial scratches will be self-repaired and the water droplets simply roll off the car, taking dirt with them. An occasional rain shower is all that's needed to keep the car clean.

AkzoNobel announced on Friday that the company has launched a EUR750 million euro bond at attractive terms, with a ten year maturity, at a coupon of 2.625%. The announcement of the bond was well received by the market with an order book exceeding EUR7 billion.

The proceeds of the new bond issue will be used to improve the overall debt profile of AkzoNobel, further reducing future refinancing risk and improving its maturity profile. The new bonds will be issued by Akzo Nobel Sweden Finance AB and will be listed on the Luxembourg Stock Exchange.

Another bit of information offered along with PPG Industries financials is that the company is spinning off its commodity chemicals business in a deal with Georgia Gulf Corp. for about $2.1 billion. Under a deal announced Thursday, Atlanta, Georgia, USA-based Georgia Gulf will buy the PPG business for $900 million in cash and $1 billion in shares to build scale and lower production costs for products such as chlorine and caustic soda.

The two companies have a longstanding relationship, and both boards of directors approved the agreement. "The transaction complements the strategic initiatives of both companies, and is a unique opportunity to create value for both sets of shareholders," PPG CEO Charles E. Bunch said last week. Bunch called the move "another strategic step for PPG to continue its transformation into a more focused coatings and specialty materials company."

PPG plans to spin off or split the unit into a separate business before handing it over. The total price of the deal also includes $182 million in debt and minority ownership interests.

In other business news, Nippon Paint and Jalalabad Steel Limited officially signed a partnership agreement to form Nippon Paint (Bangladesh) Pvt Ltd. Nippon Paint, the largest paint manufacturer in Asia, announced its entry into Bangladesh recently.

Yaw Seng Heng, Managing Director, Nippon Paint (Bangladesh-Private) Limited said, "Today marks the beginning of a new era in Bangladesh's paint industry. We are delighted to be partnering with Jalalabad Steel Limited as they have very strong reputation in the construction industry. This will definitely help to propel Nippon Paint to grow in the Bangladesh market."

Delwar Hossain, Managing Director, Jalalabad Steel Ltd said, "From today onward, history of Bangladesh's paint industry would be revolutionized as one of the forerunners of paint industry landed its foot in the country. It has been a great honor and privilege for JaIalabad steel to be a partner in this venture. We believe Bangladesh's paint industry would be immensely benefitted as Nippon paint would bring out their century old experience and distinctive technology to a great effect. We will present international standard products before the people of Bangladesh to cater their ever changing tastes."

In research news, we seem to endlessly find new applications for humble titanium dioxide. New sunlight-activated plastic lawn furniture keeps itself clean and white after two years of sitting outdoors, new research finds. The same ingredient that kills bacteria and fungi in that plastic could one day go into paint for antibacterial walls and a coating for smudge-resistant touchscreens, the researchers say.

Scientists have long studied how titanium dioxide, a chemical commonly found in paint, sunscreens and cosmetics, destroys microbes and the stubborn layer of slime they create when they colonize a surface. When titanium dioxide molecules are exposed to sunlight, it kicks off a chemical reaction that creates free radicals, which penetrate the cell walls of bacteria and fungi and damage their DNA.

To test how that reaction works outside of lab, researchers at the Fraunhofer Institute for Interfacial Engineering and Biotechnology IGB in Germany coated the armrests of some plastic lawn chairs with titanium dioxide and left other chairs untouched. They then sprayed a mixture of bacteria, moss, algae and fungi onto both sets of chairs and left the chairs outdoors. After two years, the untreated armrests gathered a layer of grime that was difficult to clean, while the titanium dioxide-treated armrests appeared clean and white, according to Fraunhofer.

In another Fraunhofer lab, engineers are working on titanium dioxide paints for outdoor walls and on titanium dioxide coatings for glass that could go into touchscreen devices. "If you apply a thin coating of titanium dioxide to a glass surface such as a smart phone screen, the skin oils and fingerprints gradually disappear from the display by themselves," Michael Vergöhl, who is leading the sun-activated surfaces research, said in a statement.

The glass coating needs an hour of sunlight to work - an improvement over the three days' worth of sun needed by previous self-cleaning screens - but the process is still fairly inconvenient, as most people don't like to leave their electronics in direct sunlight. The next step is to develop antibacterial surfaces that are able to be get activated by indoor lights, according to Fraunhofer.

In other business news, Sherwin-Williams reported net earnings of $2.21 per share in the second quarter of 2012 versus $1.74 per share in the year-ago quarter. They reported a profit of $227.8 million, up from $179.1 million a year earlier. Revenue increased 9.3% to $2.57 billion, though negative currency impacts reduced net sales 2.5%. Gross margin rose to 44.7% from 43.4%.

"Selling price increases implemented across all segments in the previous 12 months are gaining traction against the higher raw material costs," chairman and CEO Christopher M. Connor said.

Net sales for the quarter increased 9.3% year over year to $2.57 billion. The growth was driven by an increase in paint sales volume and selling price, partially offset by negative impacts of currency translation.

The Paint Stores Group posted net sales of $1.49 billion in the reported quarter, up 14.6% from the year-ago period. The improvement largely stemmed from the increase in paint sales volume and selling price. Segment profit increased 29% to $267 million from $206.6 million in the prior year due to higher paint sales volume and selling price, partially offset by soaring raw material prices as well as selling, general and administrative expenses.

Net sales of the Consumer Group went up 5.9% to $397.7 million, driven by an increase in selling price and higher sales volume. Segment profit climbed 31.6% to $80.8 million in the quarter. The increase was due to a rise in selling prices and better cost management, which was partially offset by escalating raw material prices.

Net sales of the Global Finishes Group increased 3.3% to $498.7 million in the quarter as a result of acquisitions, higher selling price and paint sales volume. The segment's profit was $48 million, jumping 58.9% year over year. The progress achieved can be ascribed to increased paint sales volume and selling price, partially offset by increased raw material costs.

The Latin America Coatings Group sales declined 4.5% to $187.3 million in the quarter due to unfavorable currency translation changes, partially offset by selling price increases and higher paint sales volume. Segment profit dropped 70% to $9.3 million in the quarter from $15.8 million in the previous year quarter, primarily due to escalation in raw material costs and negative foreign currency translation, partially offset by improved paint sales volume and selling price increases.

From our "good news" file, the Haitian government agreed last Tuesday to allow a local paint manufacturing company to become the second tenant at a major U.S.-backed industrial park under construction in the northern end of the country.

The agreement came after President Michel Martelly and Cheryl Mills of the U.S. State Department took a tour of a 10-megawatt electrical plant that will power the Caracol Haiti Industrial Park and houses for up to 1,500 workers by year's end.

The newest tenant, Peintures Caraibes SA, will join South Korean garment manufacturer Sae-A Trading Co. Ltd. and will export paint made by Sherwin-Williams along with its own locally made paint.

The facility will initially employ 167 people, with the expectation of hiring a total of 350 people, said Pierre Yves Gardere, CEO of Peintures Caraibes.

"It's Haitian companies that came to the park and we're waiting for others to come, too," Martelly said at the future site of Peintures Caraibes, which is expected to begin production in October.

Financed by $224 million in subsidies, the Caracol Park is the U.S.'s biggest investment in Haiti since the 2010 earthquake whacked the capital of Port-au-Prince and threw up to 1.5 million people into grim settlements in southern Haiti.

The Caracol project on a 617-acre site was in the works long before the earthquake and is supposed to be Haiti's largest private employer. The goal is to provide 20,000 jobs at the park and create 133,000 in all through cottage industries.

Basco Paints in Kenya has partnered with New York, NY, USA-based firm Sensational Color in a bid to expand its product offerings. Through the partnership, Basco Paints has introduced the first of a series of customized color pallets for the local market dubbed Couture Fashion, which the President of Sensational Color Kate Smith hopes will raise the profile of interior decoration in the region.

"I've helped many individual homeowners as well as hundreds of designers get an understanding of how to pick colors, where to use them and how to understand the little intricacies of how light effects color," she said.

Basco Paints managing director Kamlesh Shah said the company plans to engage consumers in an interactive workshop later this week on its product range of over 7,000 color shades.

"Having color trends is not something that anybody has really focused on in the region, so more than the color is the trends that develop over a period of time," he said.

Shah noted that as Basco Paints increases its capacity of production, there is a growing market for paint in the East African region thanks to increased construction and real estate industry figures in Uganda and other neighboring countries, providing an opportunity for the company to export its products.

The company is working on increasing its production capacity from 22 million liters of paint to 54 million liters and he revealed that the new plant will be ready for production by the end of this year to effectively serve the increasing demand for paint in the region.

In other news on the site, University of Missouri engineers recently invented a clog-preventing nozzle cover by mimicking the human eye. Kwon's invention uses a droplet of silicone oil to cover the opening of the nozzle when not in use, similar to the film of oil that At the tiny scale of the ink jet nozzle, mechanical shutters like eyelids would not work, as they would be stuck in place by surface tension. Instead, the droplet of oil for the nozzle is easily moved in and out of place by an electric field... more about this news

Scott Bader Group and Satyen Polymers Pvt Limited announce the signing of agreements signaling the successful conclusion of negotiations between the two organizations to form a joint venture in India. Phase one of the joint venture will be to implement the sharing of technology and processes for manufacture of unsaturated polyester resin gelcoats that will be produced on Satyen Polymer's plant situated in Silvassa, Union Territory of Dadra and Nager Haveli located 175 kms north of Mumbai... more about this news

Regenerative, biodegradable, wax-like properties, and versatility - were the key aspects that fundamentally convinced the team of jurors of the innovative strength of CERAFLOUR® 1000. The BYK additive is formed with the aid of bacteria. It opens new perspectives for the use of biotechnology in the coating industry and can be applied in aqueous, radiation-curing, solvent-free and solvent-borne systems... more about this news

And finally, race and rally engineers constantly struggle to manage air intake temperatures, particularly in production-based competition cars such a British Touring Cars. The increased heat generated and the restrictions on modifications lead to the air intake temperatures rising with a noticeable drop in power. Now Pipercross believes it has solved the issue thanks to the use of a ceramic coating from Zircotec... more about this news

SpecialChem4Coatings Members Reactions

> Be the first to react about this document

Rate and React about this Document