AkzoNobel boosts growth momentum with China expansion

March 23, 2011

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AkzoNobel is to invest more than €60 million in boosting production capacity for its Bermocoll cellulose derivatives (paint and building material thickeners), providing additional momentum for the company’s accelerated growth strategy which includes doubling revenue in China to $3 billion by 2015.

As well as constructing a new facility at its Ningbo multi-site in China, the company will also debottleneck the existing manufacturing site in Örnsköldsvik, Sweden. The two projects will increase capacity to close to 40,000 tons per annum and elevate AkzoNobel to a global leadership position.

“This investment is all about meeting rapidly increasing customer demand and seizing an ideal opportunity to become market leader by establishing production in Asia,” explained Rob Frohn, AkzoNobel’s Board member responsible for Specialty Chemicals. “High growth markets are central to our growth strategy and adding a second production unit for Bermocoll in Ningbo will add further impetus to our ambition to double revenue in China by 2015.”

The debottlenecking project in Sweden is due to be completed by the end of this year. The majority of the investment, however, has been earmarked for the new plant in Ningbo, where the company’s Functional Chemicals business already operates facilities for chelates, ethylene amines and ethylene oxide. An organic peroxides facility is also due to come on stream in 2011. The new Bermocoll unit should be on stream in early 2013 and the funding allocated for this facility will bring the total investment in Ningbo to more than €320 million.

“Ningbo is the ideal location for the new facility as the infrastructure is already in place and we have access to on-site production of ethylene oxide, as well as being close to other key suppliers,” added Managing Director of AkzoNobel Functional Chemicals, Jan Svärd. “The fact that Asia is the world’s fastest-growing market also means that building the plant in China makes perfect strategic sense.”

Based on a natural polymer, the company’s cellulose derivatives are sourced from wood pulp or cotton linters. The main application areas are water-based paints, building additives and pharma/healthcare.

AkzoNobel currently employs around 6,700 people in China, with revenue for 2010 totaling €1.3 billion. The majority of revenue is generated from local demand. The company now has 27 manufacturing locations in China.