1

● Axalta Coating Systems opens regional Auto Refinish Training Centre in Dubai 2

● AkzoNobel reports record profitability in Q1 2017 3

● Memorandum of Understanding signed between Berger Paints India and Chugoku Marine Paints, Japan

6

● Milliken acquires Keystone Aniline Corporation; Colorant customers win 7

● Tnemec expands R&D facility and upgrades capabilities 8

● PPG paints CatalIST, Navistar SuperTruck of the future 9

● NEW FROM IRL: INDUSTRIAL WOOD COATINGS REPORTS 11

BASF named a General Motors Supplier of the Year

for twelfth time

BASF was named a 2016 General Motors (GM) Supplier of the

Year for the twelfth time since 2002.

The award winners were chosen by a global team of GM

purchasing, engineering, quality, manufacturing, and logistics

executives. Winners were selected based on performance criteria in product purchasing,

indirect purchasing, logistics, customer care and aftersales. With its broad array of color

solutions and modern paint processes, BASF’s Coatings division helps GM improve

productivity and environmental performance.

“We are focused on building positive supplier relationships, bringing new, customer-centric

innovations to GM and being the OEM of choice among suppliers,” said Steve Kiefer, GM

Vice President, Global Purchasing and Supply Chain. “The companies we recognise not only

have brought innovation, they delivered it with the

quality our customers deserve.”

CONTENTS

CUBE

807 21 April 2017

www.informationresearch.co.uk

cube@brggroup.com +44 (0) 208 832 7830

2

"BASF’s relationship with GM demonstrates the importance of cultivating partnerships to

drive innovation,” said Teressa Szelest, President, Market and Business Development North

America at BASF. "There is a creative space that lies between a materials provider and a car

manufacturer, and BASF looks to fill that with cutting-edge products and solutions."

Ms. Szelest accepted the award on behalf of BASF at the 25th annual awards ceremony in

Orlando, Florida on March 31.

Source: BASF, 18 April

Axalta Coating Systems, a

leading global supplier of

liquid and powder

coatings, has launched

the first of its kind Automotive Refinish

Training Centre in Dubai, United Arab

Emirates. The Centre will provide expert

training in the use of Axalta products that

are designed for the repainting of vehicles

in body shops. The opening of the next

generation facility follows the October

2016 opening of Axalta’s regional office in

Dubai’s Jebel Ali Free Zone Authority

(JAFZA).

The Dubai Automotive Refinish Training

Centre, Axalta’s 47th such center in the

world, will host world class training

programs for body shop, repair and

refinish technicians to hone their skills and

learn to use the latest coating

technologies found in Spies Hecker®,

Standox® and Cromax®, Axalta’s premium

refinish coating brands, and other refinish

brands which are available in eighteen

countries in the Middle East & North

Africa (MENA) region.

“We are excited to be able to expand our

presence in Dubai and the region over

such a short time span,” said Charlie

Shaver, Chairman and CEO of Axalta, who

formally inaugurated the new facility.

“The opening of this world-class customer

learning and development facility

highlights our commitment to invest in

the region and support our customers.

This interactive training and education

facility establishes a solid foundation that

will provide continuous support and

development to vehicle repair specialists

that will both enhance the level of

refinishing services and optimise the use

of Axalta technologies in the region.”

Axalta’s consistent investment in product

development and technology solutions

has resulted in innovative waterborne

refinish coating systems that enable its

customers to reduce waste while being

more productive, profitable and

sustainable. The Centre will enable

customers to maximise their use of these

products which can reduce the time and

energy needed to repaint vehicles.

"Decisions related to automotive repair

are following global trends in favour of

Axalta Coating Systems

3

environmentally responsible products, as

well as enabling refinish technicians to

improve productivity at their work place

while delivering superior results,”

explained Fadi Medlej, Managing Director

of MENA for Axalta. “The new facility will

meet the needs of refinish technicians

who will be trained in the use of all our

products, and especially our latest

waterborne products, to provide vehicles

with a durable and beautiful finish.”

During the launch of the Automotive

Refinish Training Centre, Axalta agents,

customers and regional partners, and

members of the media, participated in a

series of hand-on activities including spray

painting miniature cars, mixing colors and

experiencing the differences between

waterborne and solventborne coatings.

In 2016, Axalta spent $180 million on

technology and product research and

development which enabled the company

to remain a leading supplier of coatings to

light vehicle original equipment

manufacturers (OEMs) and the number

one global coatings supplier in the refinish

segment. The company is also the largest

global coatings supplier to heavy duty

truck and bus manufacturers and the

number two global supplier of electrical

insulation, powder and electrodeposition

coatings.

Source: Axalta Coating Systems, 17 April

AkzoNobel reports record profitability in Q1 2017

• Record profitability, with higher EBIT1, return on sales (ROS)2

and return on investment (ROI)3

• Revenue up across all Business Areas and 7% overall, mainly

due to higher volumes and acquisitions

• Volumes up 4% driven by Decorative Paints and Specialty Chemicals

• EBIT up in all Business Areas and 13% overall, at €376 million (2016: €334 million),

reflecting the positive effects of volume growth, continuous improvement and cost

discipline

• Full-year EBIT expected to be around €100 million higher than 2016, excluding any

substantial changes in market conditions

• Profitability improved, with ROS at 10.3% (2016: 9.7%) and ROI at 15.2% (2016:

14.5%)

• Adjusted earnings per share up 8% at €1.05 (2016: €0.97)

• Net cash outflow from operating activities improved to €287 million (2016: €336

million)

AkzoNobel

4

• €150 million share repurchase program underway: €144 million completed up to

March 31, 2017

Outlook:

AkzoNobel continues to anticipate positive developments for EMEA, North America and

Asia, improving during the year, while Latin America is expected to stabilise. Market trends

experienced in the second part of 2016, including for the marine and oil and gas industries,

are expected to continue during the first half of 2017.

The company has structurally improved its ability to respond to developments in its markets

and continues taking appropriate measures to deal with higher raw material prices in an

inflationary environment. EBIT for 2017 is expected to be around €100 million higher than

2016, as a result of growth momentum and continuous improvement, assuming no material

change in market and economic dynamics.

CFO Maëlys Castella: “Our record performance continued this quarter, showing the

substantial growth momentum we have across the business. Significant progress continues

across all our Business Areas, reflecting both our strong customer focus and great portfolio

of brands.

“We remain focused on increasing returns to shareholders, including a €150 million share

repurchase program that began in the quarter.

“We made another industry-leading commitment to sustainability, announcing our ambition

to become carbon neutral by 2050 and use 100% renewable energy. “Our R&D efforts will

be strengthened with a new innovation hub at Felling in the UK, and we announced more

key partnerships for our Human Cities Program around the world.

“Our strong financial and operational foundation has enabled us to embark on the next

phase of our strategy, with a review of options for the separation of the Specialty Chemicals

business to further unlock value for shareholders. We look forward to updating the market

on our new strategy.”

5

Decorative Paints:

Revenue was up 7%, mainly driven by strong volume growth. Volumes were up 9%, with

positive developments in all regions. Volume developments were positive for the sixth

consecutive quarter. EBIT increased by 48%, mainly as a result of higher revenue and

continued focus on cost measures, while recognising that Q1 is a seasonally smaller quarter.

Communities in more than 40 countries will benefit from a partnership between AkzoNobel

and MasterPeace, a global peace movement, to paint 100 “Walls of Connection,” part of the

company’s Let’s Colour initiative.

Performance Coatings:

Revenue was up 6%, driven by positive volume development across a number of segments

and the acquisition of BASF’s Industrial Coatings business. EBIT was up 1%, with positive

development in segments including Industrial and Powder Coatings and Automotive and

Specialty Coatings offsetting continued weak demand in the marine and oil and gas

industries and integration costs. More than 100 scientists will be brought together in a new

€12.6 million research and innovation hub in Felling, UK. The facility will focus on developing

protective coatings for the energy, mining, infrastructure and oil and gas industries.

Specialty Chemicals:

Revenue was up 7%, due to positive volume developments in all business units and regions

and favorable currency effects. Volumes were up 5%, with several businesses benefiting

from improved market conditions in the oil drilling, mining, agrochemical and building and

construction segments. EBIT increased by 7%, mainly due to improved volumes and

operational efficiencies, partly offset by price increases which were not yet fully recaptured

through increased selling prices. AkzoNobel’s Imagine Chemistry open innovation challenge

generated more than 200 ideas to solve real-life chemistry-related challenges as well as

uncovering sustainable commercial opportunities for the Specialty Chemicals businesses.

Sustainability:

AkzoNobel has committed to accelerating its sustainability agenda by announcing a new

ambition to use 100% renewable energy and become carbon neutral by 2050. The company

was also awarded a top grade on the Influential Supplier Climate A List for its efforts to

combat climate change. The Dutch government recognised AkzoNobel’s latest contribution

to meeting national sustainability targets resulting from investments at its chemicals

complex in Rotterdam.

Human Cities:

AkzoNobel joined forces with SOS Children's Villages to drive a positive impact on youth

unemployment including professional training through the company’s painter academies.

6

More than 200 children in Egypt have benefited from a major renovation of their school’s

facilities by AkzoNobel volunteers. The company’s Human Cities projects have touched the

lives of more than 9 million people in the past year.

Innovation:

AkzoNobel signed an agreement with specialty chemicals company Itaconix to explore

opportunities for the production of bio-based polymers. A new online tool which can track

and certify the amount of bio-based raw materials in products was launched as a pilot by

AkzoNobel and partners. Another partnership involving AkzoNobel is developing a drone

capable of remotely inspecting enclosed spaces, helping to improve safety in the marine and

oil and gas industries.

1. Operating income excluding identified items.

2. ROS% is EBIT divided by revenue.

3. Moving average ROI% is 12 months EBIT divided by 12 months average invested

capital

Source: AkzoNobel, 19 April

Berger Paints India Limited (“Berger”) and

Chugoku Marine Paints, Ltd. (“CMP”) of

Japan have entered into a Memorandum

of Understanding (“MOU”) for

cooperation and collaboration in the field

Berger Paints India

7

of marine and related industrial paints in

India.

The MOU envisages joint efforts in

marketing, supplying and purchasing

marine related industrial paints.

Subsequently, the parties have a view of

establishing a joint venture company as

their final objective.

Talking about the MOU, Mr. Masataka

Uetake, President & CEO said that:

"Chugoku looks forward to the partners

jointly

becoming leading players in marine

coatings in India and the neighboring

region." Mr. Abhijit Roy, CEO, Berger

Paints, mentioned that "Chugoku and

Berger together have considerable

strength in technical expertise, product,

market knowledge and relevant skills and

infrastructure and these are expected to

considerably benefit the territory's market

requirements.”

Source: Berger Paints, 11 April

Manufacturers of agricultural, plastic, coating, ink and

household institutional and industrial products that require innovative colorants can look

forward to major new benefits from Milliken Chemical’s recent acquisition of Keystone

Aniline Corporation. These include:

1. A broader array of advanced colorant solutions, technologies and services

2. A streamlined supply chain, thanks to availability of a wider range of products from a

single source

3. Enhanced reliability of global supply

The deal, which closed on April 12, brings together two world-class organisations with

complementary expertise and capabilities, shared values and a long, successful history in

the colorants industry.

• Milliken’s Performance Colorants & Ingredients business is a leading supplier of

polymeric colorants and is renowned for its innovative chemistry and the ability to

synthesize new molecules.

• Keystone, a global leader in dyes, pigments, pigment dispersions and polymers,

brings to the equation exceptional formulation skills and application development

technology.

Milliken

8

Both are privately held, family-owned companies that share fundamental values including a

strong emphasis on business ethics, as demonstrated by their leadership in regulatory

compliance and safety.

“This acquisition has far-reaching benefits for everyone involved,” said Russ Rudolph, Vice

President, Performance Colorants & Ingredients for Milliken. “Our combined customers win

through greater availability of proven colorant technologies and resources that can help

them penetrate and grow new markets to gain a competitive advantage. Our suppliers can

expect new opportunities that will allow them to play a greater role in serving our expanded

organisation.”

According to John Andrews, Chief Executive Officer of Keystone, “By combining our product

portfolios and specialised colorant knowledge with Milliken’s solutions and expertise, we

create business and market synergies that will drive new global opportunities and better

meet the evolving needs of our customers. The resulting organisation will possess greater

breadth and depth across the board, from research and development to formulation

capabilities, quality control and product stewardship.”

Milliken, celebrating 152 years in business, and Keystone, celebrating 97 years, operate

worldwide, with facilities in North America, Europe, Latin America and Asia.

Source: Milliken, 13 April

Tnemec Company

Inc., a leading

manufacturer of

protective coatings

and linings, opened

the doors of its

new research and development facility on

March 30, 2017. This expansion of the

company’s current manufacturing plant in

North Kansas City, Missouri, includes an

upgrade that doubles the size of its

previous R&D laboratory and office space

while making notable improvements to its

testing and ventilation equipment.

“Tnemec Company has always been

dedicated to researching and developing

innovative technologies to protect our

customers in corrosive environments,”

explained Remi Briand, Vice President –

R&D for Tnemec. “This expansion and

renovation represents the next phase of

this commitment.”

Among the upgrades, a new chemical

immersion room allows Tnemec’s R&D

team to conduct more expansive

performance testing, including in-house

autoclave tests and severe wastewater

analysis testing (S.W.A.T.). Several

updated fume hoods were also installed

to handle tougher testing protocols.

Tnemec

9

Other improvements include a controlled

spray booth for panel preparation, new

contact angle devices for nanochemistry,

an updated chamber capable of handling

temperatures ranging from -94°F (-70°C)

to 356°F (180°C) and a new state-of-the-

art ventilation system to ensure safety for

all personnel and the surrounding

environment. The building also received

high-performance Tnemec coatings

systems on the walls and floors.

“The scope of this project also included

updating our shipping and traffic offices

and renovating the building’s break

room,” noted Briand. “This expansion

improves our capabilities and the working

conditions for our current employees,

while also adding additional room for

added personnel in the future.”

The new R&D facility further helps

Tnemec Company stay focused on

delivering high-performance coatings to

customers in the ever-changing coatings

industry, according to Briand. This

expansion comes after several other

changes in the company, including the

introduction of Chase Bean as President,

various product introductions and an

effort to increase the domestic sales

force.

"We look forward to the future of

research and development for Tnemec

and the positive effect it will have on our

clients,” added Briand.

Source: Tnemec, Latest news

PPG was the paint supplier Navistar recently chose to give

“CatalIST”—its entry in the Department of Energy (DOE) SuperTruck

program—its dazzling and colorful finish, complementing the cutting-

edge technological features of the truck. The SuperTruck program, a

federal initiative for developing cost-effective technologies to

dramatically increase the freight efficiency of tomorrow’s Class 8 trucks, has produced a

model that has already had an impact on the future of the trucking industry. CatalIST, which

is named for serving as the catalyst for significant improvements in future commercial

trucks (with -IST standing for International SuperTruck, the truck’s brand), exceeded DOE

expectations on multiple fronts. The truck also impressed DOE personnel with its bold,

advanced PPG paint job.

Navistar Inc., parent company of INTERNATIONAL® Truck, turned to PPG and Gerber

Collision and Glass of Grand Rapids, Michigan, for the SuperTruck’s high-tech, forward-

looking appearance. PPG training center Manager Jamie Redd, Gerber fleet Manager Fred

Honoré II, Painters Chris Mayernick and Chris “Storm Trooper” Moore, and Body Lead Jim

PPG

10

Berens worked under a tight deadline to bring it all together. The truck’s topcoat scheme

features DELFLEET® Evolution paint system orange tricoat in FBC with F3921 clearcoat. The

gray on the trailer—FBC with a flattened F3921 clear—was painted to match the flattened

gray film on the skirts.

“This was a fantastic accomplishment with a quick, demanding turnaround,” said J.J. Wirth,

PPG Commercial Coatings Brand Manager. “There was a lot riding on CatalIST, and its finish

had to be as exceptional and innovative as the technology driving it.”

CatalIST technological innovations included intelligent controls such as:

• predictive cruise control,

• high-efficiency engine combustion,

• an aerodynamic wedge-shaped cab design featuring carbon-fiber panels,

• a smaller LED headlamp system and sloped windshield for reduced drag,

• a lightweight alloy and composite suspension, and

• 13 miles-per-gallon fuel consumption and a freight efficiency improvement of 104

percent compared to a 2009 production vehicle.

Navistar reports that a number of these innovations are now being implemented in

production vehicles.

Source: PPG, 11 April

11

INDUSTRIAL WOOD COATINGS REPORTS MARKET REPORTS & DATABASE

IRL presents for the first time an in-depth analysis of the global wood coatings market. This report focuses specifically on the furniture, parquet, joinery and outdoor structures segments providing market volumes, detailed prices, segmentations and market shares. IRL also provides top-line data (volumes, values and breakdowns by chemistry and technology) for Tier 2 countries. All this data is offered in PDF report format and also through our complimentary interactive database, where clients are able to manipulate and extract the information to an Excel spreadsheet. Unlimited users per subscription. Industrial Wood Coatings:

• Market volumes in metric tonnes (2011-2020) • Prices and market values in EUR and local currency (2015) • Market shares by company in volume (2015) • Chemistry breakdown: Pure acrylic, alkyds, nitrocellulose, polyesters, polyurethane,

others (2011-2020) • Technology breakdown: Water-based, solvent-based, radiation-cured (2011-2020) • End use: Furniture, joinery, parquet, outdoor structures (2011-2020) • Functional layer breakdown: Pre-treatment, primer, intermediate, finishing (2011-

2020) • Value breakdown by: Chemistry, technology, end use and functional layer (2015)

Methodology: The information in the reports is based on a comprehensive programme of interviews with key players in each country, backed up by thorough secondary research and IRL’s in-house database of global paints and coatings market data. Database Access: Purchasers of the full regional report or at least 5 country volumes will automatically receive complementary access to our Database. IRL’s Enterprise database provides a comprehensive and fast online tool that enables clients to analyse all data available efficiently and to every desirable level of detail. For further information on our database services, please contact us. For more information on these and our other reports, please contact Cathy Galbraith at: cgalbraith@brggroup.com

BRAND NEW FROM IRL

12

Coating Update by Email (CUBE) is a free weekly news digest of the latest business news and events in the global paints and coatings industry, and is published in-house by specialist coatings research company IRL.

Subscriptions: If you or your colleagues would like to subscribe to CUBE, please send an email along with your name, position and company to cube@brggroup.com with ‘SUBSCRIBE’ written in the subject field. Please add news@brggroup-chems.com to your safe senders list. If you no longer wish to receive CUBE, please send a blank email to cube@brggroup.com with ‘UNSUBSCRIBE’ written in the subject field.

Enquiries: For enquiries or feedback to the Editor of CUBE (Mrs. Katie Tofts), please send an email to cube@brggroup.com. Please also send your press releases to this address. For enquiries regarding other services that IRL can provide please email irl@brggroup.com detailing your request.

Disclaimer: Every effort is made to provide accurate information in CUBE, but in the event of errors neither

the Editor nor Business Research Group (UK) Ltd. or its companies can be held accountable.

CUBE © IRL 2017