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Sun Closes Deal, Perstorp Broadens Range, MIT Gets Wrinkly

Hello and welcome to your early week international coatings industry update, brought to you by SpecialChem. We have something for everyone in this issue, as the industry takes a breather after financials.

Sun Chemical and its parent company, DIC, have closed the acquisition of Benda-Lutz Werke GmbH, a leading manufacturer of metallic effect products based in Austria. On June 1, 2012, Sun Chemical and DIC signed a definitive agreement to acquire Benda-Lutz. Terms of the deal were not disclosed.

The acquisition allows Sun Chemical and DIC to purchase 100 percent of the shares, assets and business from Benda-Lutz and would expand its product portfolio in metallic effects. With the acquisition, Sun Chemical adds production facilities in Austria, Poland, Russia and the United States to accompany its aluminum pigment manufacturing site in China, forming the basis of a new global Metallics Business Unit as part of Sun Chemical's Performance Pigments Division.

Perstorp announced that they have expanded their product offering for resin producers with 1,6-hexanediol. The company is now producing substantial volumes to meet the growing market demand. Demand for 1,6-hexanediol is increasing thanks to continued growth in applications such as coatings, sealants, polyurethane elastomers and printing inks where the product is a key building block.

"We aim to help support this growth and broaden our platform, to better serve our customers in Europe," says Mårten Olausson, Perstorp Business Unit Manager Caprolactones. "The product represents an ideal complement to our already wide portfolio for resin production."

In research news, the wrinkles on a raisin result from a simple effect: As the pulp inside dries, the skin grows stiff and buckles to accommodate its shrinking size. Now, a team of researchers at MIT has discovered a way to harness that same principle in a controlled and orderly way, creating wrinkled surfaces with precise sizes and patterns.

This basic method, they say, could be harnessed for a wide variety of useful structures: microfluidic systems for biological research, sensing and diagnostics; new photonic devices that can control light waves; controllable adhesive surfaces; antireflective coatings; and antifouling surfaces that prevent microbial buildup. A paper describing this new process, co-authored by MIT postdoctoral fellows Jie Yin and Jose Luis Yagüe, former student Damien Eggenspieler and professors Mary Boyce and Karen Gleason, is being published in the journal Advanced Materials.

In a follow-up to a deal announced in May, it looks like a verbal battle has ensued between paint producer Dulux Group and garage door maker Alesco, with both companies making submissions to the Takeovers Panel alleging improper conduct by the other. Dulux made an initial takeover offer for Alesco in May 2012, offering AU$2 in cash for each Alesco share. At the same time, Dulux acquired 20% of the Alesco's shares from large shareholders.

On July 23, Dulux upped its bid to AU$2.05 in cash and said it would allow Alesco shareholders to receive AU$0.18 in franking credits per share if Alesco declared and paid a AU$0.42 fully franked dividend. Alesco reported a loss of AU$13.9 million for the financial year and didn't declare the Dulux-mandated dividend, but instead declared dividends of AU$0.18 for the full year, including a final dividend of AU$0.05 and a special dividend of AU$0.10, both fully franked.

Dulux was upset that Alesco sent shareholders a letter stating that DuluxGroup will pay shareholders AU$1.90 in cash, while Alesco's management made statements to the media that Dulux had decreased its offer to AU$1.90. Now the company has asked the Takeovers Panel to prevent Alesco from making any further comment without panel approval and to order Alesco to announce that Dulux had increased its offer to AU$2.05 plus franking credits.

(Anybody remember the Three Stooges? -Ed.)

Alesco saysthat Dulux's second offer document suggests that the AU$2.05 bid includes the final AU$0.05 dividend and the AU$0.10 special dividend -- which is cash paid to shareholders by Alesco, not Dulux. This suggests that the theoretical price Dulux is offering shareholders is AU$1.90 in cash -- plus AU$0.15 in dividends already paid by Alesco.

Alesco's submission to the Takeovers Panel states that Dulux's bid was misleading and overstated the amount of dividends Alesco could pay. With just AU$3.1 million in cash on its balance sheet, AU$69 million of debt, and a net cash outflow of AU$3.8 million for the year, it appears that Alesco would have had trouble producing the funds to pay out the AU$0.42 dividend.

In India, Berger Paints shares surged over 8% in early morning trade on Friday and is trading very close to its 52-week high of Rs 153.30 after the company posted a rise of 19% at Rs 44 crore in its consolidated net profit for the first quarter ended June 2012. Net sales during the quarter stood at Rs 803 crore, up from Rs 693 crore posted in the same period last year.

The company is also looking to expand its distribution channel from the existing 12,000 dealers to 16,000 in the next four years. Roy said the company was aiming to be among the top 25 paint companies in the world.

Within the next five months, Berger Paints, India's second-largest paints company, will likely wrap up an overseas acquisition or a technology collaboration, besides acquiring additional capacity in India.

Speaking after the company's annual general meeting on Thursday, managing director Abhijit Roy said, "We would love to acquire new technologies in areas like protective, automotive and wood coatings. An acquisition is also possible, if it boosts our market share."

Roy said Berger does not yet have all the technologies available now. So, a joint venture, a tie-up or an acquisition is possible "very soon".

Berger has set itself a target to double fiscal 2012 turnover of INR 2,948 crore by fiscal 2017. Towards this end, it is launching an INR 35 crore TV promotion. And, for the first time, it is hiring a Bollywood female actor as ambassador for its brand Silk. The marketing campaign, to be kicked off shortly, will highlight the Silk, Easy Clean and Allguard brands. With distribution and sales channels already primed for the campaign, Berger expects to make a "significant impact" on the market, said Roy.

Capacity will be increased to 42,000 tons a month from 24,000 tons now by 2013, to keep up with the expected rise in demand. "We are in the process of raising capacities at Rishra (West Bengal) and in Goa from 3,000 tons a month to 8,000 tons each. The 12,000 ton Hindupur plant would be commissioned by April-May of 2013."

Despite raw material prices stabilizing after last year's wild swings, Berger is witnessing renewed upward pressure on certain costs. "Reliance Industries has hiked prices of zylene and toluene on Wednesday. These aromatic hydrocarbons, commonly used as solvents by industrial paint makers such as Berger, will impact us," said Roy.

This might necessitate a price hike but not in the current quarter, unless prices of other raw materials, particularly mineral turpentine oil (MTO), too, rise, Roy said. MTO's supplies and prices are controlled by the government.

"The government is yet to announce the revised prices. If its price goes up, then we have to raise our prices. MTO, after all, constitutes about 35% of raw material costs of our solvent-based decorative paints," Roy said.

In the latest coatings-related health alert, research now points to a new and ubiquitous indoor source of harmful UV rays: eco-friendly compact fluorescent light bulbs. Scientists say they found widespread chipping or cracking in the phosphor surface coating of nearly all the compact fluorescent bulbs they examined, allowing UV rays to escape.

Most of the bulbs "have cracks in the phosphor coating, probably due to the fact that the coating is brittle and has trouble making the tight bends required to make these bulbs compact," explained study lead author Miriam Rafailovich, a Professor of Materials Science and Engineering and Director of the Garcia Center for Polymers at Engineered Interfaces at Stony Brook University in Stony Brook, N.Y. "As a result, we observed, by eye, defects in nearly all the bulbs that we studied."

And, Rafailovich added that, "skin cells exposed to compact fluorescent light emissions showed the same damage as those exposed to UV light" when placed within one foot of a CFL bulb.

The study is funded by the U.S. National Science Foundation and is published in a recent issue of the journal Photochemistry and Photobiology.

As Americans grow more concerned about environmental and energy issues, millions have made the switch from the old incandescent bulbs to compact fluorescents. The U.S. National Institutes of Health notes that the newer technology uses roughly 75 percent less energy than standard incandescent bulbs. In addition, it will soon be illegal to sell incandescent for home use.

Each compact fluorescent bulb has a phosphor coating applied to its narrow glass tubing. The coating is designed to both enhance the bulb's luminescence capacity while at the same time absorbing UV radiation that would otherwise be emitted. The authors warn that if the bulb's surface area is riddled with "bald" spots, UV protection is lost.

To see how widespread the problem might be, the Stony Brook team set out to purchase a wide array of compact fluorescent bulbs commercially available in stores across the Suffolk and Nassau county regions of Long Island, N.Y. They measured each bulb for levels of UV emissions, while at the same time examining each for signs of cracking in its phosphor coating.

The result: All the bulbs, regardless of manufacturer or brand, were found to emit "significant" levels of both UVC and UVA rays as a result of cracks in their respective applied coatings.

Further laboratory testing revealed that when healthy human skin cells were exposed to the UV emitted from the bulbs, damage ensued that was "consistent" with the damage typically caused by UV radiation from the sun.

By contrast, exposure to incandescent bulbs of similar strength prompted no skin cell damage.

According to Rafailovich, "these bulbs are fragile, the phosphor is easily damaged, and possibly dangerous amounts of UV are emitted. Therefore, it's best not to use these bulbs at close range -- less than a couple of feet -- or look directly at them. To be safe, they should be used behind a glass cover, or kept at a distance of several feet or more."

Rafailovich said it's incredible that this situation has arisen at all. "You should not need suntan lotion to protect you from indoor lighting," she said.

In other research news, as we wrote last week, a team of Harvard scientists has developed a slick way to prevent the troublesome bacterial communities from ever forming on a surface. Biofilms stick to just about everything, from copper pipes to steel ship hulls to glass catheters. The slimy coatings are more than just a nuisance, resulting in decreased energy efficiency, contamination of water and food supplies, and - especially in medical settings - persistent infections. Even cavities in teeth are the unwelcome result of bacterial colonies.

In a study published in the Proceedings of the National Academy of Sciences (PNAS), lead coauthors Joanna Aizenberg, Alexander Epstein, and Tak-Sing Wong coated solid surfaces with an immobilized liquid film to trick the bacteria into thinking they had nowhere to attach and grow.

"People have tried all sorts of things to deter biofilm build-up - textured surfaces, chemical coatings, and antibiotics, for example," says Aizenberg, Amy Smith Berylson Professor of Materials Science at the Harvard School of Engineering and Applied Sciences (SEAS) and a Core Faculty Member at the Wyss Institute for Biologically Inspired Engineering at Harvard. "In all those cases, the solutions are short-lived at best. The surface treatments wear off, become covered with dirt, or the bacteria even deposit their own coatings on top of the coating intended to prevent them. In the end, bacteria manage to settle and grow on just about any solid surface we can come up with."

Taking a completely different approach, the researchers used their recently developed technology, dubbed SLIPS (Slippery-Liquid-Infused Porous Surfaces) to effectively create a hybrid surface that is smooth and slippery due to the liquid layer that is immobilized on it.

First described in the September 22, 2011 issue of the journal Nature, the super-slippery surfaces have been shown to repel both water- and oil-based liquids and even prevent ice or frost from forming.

"By creating a liquid-infused structured surface, we deprive bacteria of the static interface they need to get a grip and grow together into biofilms," says Epstein, a recent Ph.D. graduate who worked in Aizenberg's lab at the time of the study.

"In essence, we turned a once bacteria-friendly solid surface into a liquid one. As a result, biofilms cannot cling to the material, and even if they do form, they easily 'slip' off under mild flow conditions," adds Wong, a researcher at SEAS and a Croucher Foundation Postdoctoral Fellow at the Wyss Institute.

Aizenberg and her collaborators reported that SLIPS reduced by 96-99% the formation of three of the most notorious, disease-causing biofilms - Pseudomonas aeruginosa, Escherichia coli, and Staphylococcus aureus - over a 7-day period.

The technology works in both a static environment and under flow, or natural conditions, making it ideally suited for coating implanted medical devices that interact with bodily fluids. The coated surfaces can also combat bacterial growth in environments with extreme pH levels, intense ultraviolet light, and high salinity.

SLIPS is also nontoxic, readily scalable, and - most importantly - self-cleaning, needing nothing more than gravity or a gentle flow of liquid to stay unsoiled. As previously demonstrated with a wide variety of liquids and solids, including blood, oil, and ice, everything seems to slip off surfaces treated with the technology.

To date, this may be the first successful test of a nontoxic synthetic surface that can almost completely prevent the formation of biofilms over an extended period of time. The approach may find application in medical, industrial, and consumer products and settings.

In future studies, the researchers aim to better understand the mechanisms involved in preventing biofilms. In particular, they are interested in whether any bacteria transiently attach to the interface and then slip off, if they just float above the surface, or if any individuals can remain loosely attached.

"Biofilms have been amazing at outsmarting us. And even when we can attack them, we often make the situation worse with toxins or chemicals. With some very cool, nature-inspired design tricks we are excited about the possibility that biofilms may have finally met their match," concludes Aizenberg.

Aizenberg and Epstein's coauthors included Rebecca A. Belisle, research fellow at SEAS, and Emily Marie Boggs '13, an undergraduate biomedical engineering concentrator at Harvard College. The authors acknowledge support from the Department of Defense Office of Naval Research; the Croucher Foundation; and the Wyss Institute for Biologically Inspired Engineering at Harvard University.

In other news on the site, a team of Iranian researchers consisted of experts from Amirkabir University of Technology and Islamic Azad University, Mahshahr Branch, have recently come up with a new method to increase the scratch resistance of automotive clear-coats. During the recent decades, there has been a great deal of efforts to improve the resistance of automotive clear-coats against the abrasive and erosive wear... more about this news

Marubeni and Azelis announced a joint cooperation agreement to work together in Asia. This win-win deal is seen to considerably strengthen both parties and will help to further drive their shared ambition for rapid expansion and sustainable business development in the region. Many complimentary synergies exist between the two companies to provide opportunities for future profitable growth... more about this news

At Labelexpo Americas 2012, Sun Chemical will introduce visitors to its full range of solutions for the narrow web, tag and label market, from inks and coatings to brand protection, pre-press services with high-definition digital plate technology, and a dispenser program which lowers ink spend by up to 45 percent... more about this news

And finally, PIA recently presented Kodak with a 2012 InterTech Technology Award honoring Kodak's NEXPRESS Red Fluorescing Dry Ink's innovative capabilities. The KODAK NEXPRESS Red Fluorescing Dry Ink Solution helps printers provide increased security and fraud protection on documents, packaging, promotional, and direct mail materials and is part of the KODAK NEXPRESS Fifth Imaging Unit Solutions portfolio... more about this news

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