AkzoNobel building more competitive Deco business

October 2, 2013

AkzoNobel intends to introduce a streamlined management structure and new operating model for its Decorative Paints business in order to accelerate profitable growth in Europe and the high growth markets.

The planned changes represent the critical next phase in simplifying the organization and making it more agile and competitive following the recent divestment of the Decorative Paints North America business.

"We divested our North American activities to focus on key markets in Europe and the world's high growth regions and this intended reorganization of our management set-up and operating model is a major step towards reducing complexity and making us stronger," explained Ruud Joosten, the company's Executive Committee member responsible for Decorative Paints.

"Our intention is to put in place a structure which fits our strategic ambitions for the business and will help propel us towards achieving a level of profitable growth in line with our 2015 targets."

The planned changes – due to come into effect on January 1, 2014 – involve reducing the number of senior management teams and introducing a new top level Deco structure divided into five regions instead of eight: North and Central Europe, South East Europe and Africa, India and South East Asia, Latin America, China and North Asia.

A number of key global functions will also be centralized, including human resources, research and development, supply chain, finance, sourcing and information management. This will free up the country organizations to focus more keenly on sales and marketing and help forge closer links with customers and markets. It will also bring about significant cost savings and efficiency benefits.

"We need to create a leaner organization and we are confident that the proposed new structure will provide a springboard for us to further build on our leadership positions across all our markets," continued Joosten. "In addition, streamlining the organization will also make us better equipped to build our brands, increase market penetration and become more competitive."
The intended changes involve a number of potential relocations and discussions are currently underway with the relevant works councils.