Understanding the value chains of the Paint & Coatings industry in CEECoatings industry in CEE- A chemical distributor’s perspective
Martin Rimmer: European Marketing Manager Coatings & Construction
26th September 2013
▌CEPE Plenary Session
DISCLAIMER
This presentation (the “Presentation”) contains con fidential information and is being given on a confidential basis. It contains only summary i nformation and does not purport to be comprehensive and is not intended to be (and should not be used as) the sole basis of any analysis or other evaluation.
Nothing in the Presentation shall form the basis of any contract, representation, or undertaking, express or implied. The Company does n ot make any representation that this
BRENNTAG SPECIALTIES - Title of presentation 2
undertaking, express or implied. The Company does n ot make any representation that this Presentation is sufficient for the recipient’s asse ssment process.
This Presentation is confidential and may not be co pied or used in whole or in part for any purpose or furnished or disclosed to the press / me dia. The unauthorized disclosure of this Presentation to the press / media or any informatio n contained in or relating to it could damage the interests of the Company and have seriou s consequences.
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AGENDA
▌Introduction
▌Value Chain Position
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▌Brenntag The Leading Chemical Distributor
▌Brenntag in CEE
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AGENDA
▌Introduction
▌Value Chain Position
BRENNTAG SPECIALTIES - Title of presentation 4
▌Brenntag The Leading Chemical Distributor
▌Brenntag in CEE
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IntroductionBRENNTAG
▌Understanding the value chains of the Paint & Coati ngs industry in CEE- A chemical distributor’s perspective ...
▌What is the role of a distributor in today’s market and in the future?
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▌We intend to explore this role and explain our offe ring to the Coatings Industry
AGENDA
▌Introduction
▌Value Chain Position
BRENNTAG SPECIALTIES - Title of presentation 6
▌Brenntag The Leading Chemical Distributor
▌Brenntag in CEE
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…providing tailor-made solutions within the Value Ch ainBRENNTAG'S STRATEGIC PARTNERSHIP APPROACH
Relationships based on trust, creating value
Supplier Coatings Customer
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Benefits for supplier
� Growth potential based on full-line product portfolio and broad market access
� Better cost efficiency
� Reduced complexity and increased focus
� Higher customer satisfaction
� Quick response to market changes
� Agreed business reporting
Benefits for Coatings Customers
� Reduced Raw Material spend
� Strengthening of core competences
� Working capital optimization
� Complexity reduction(Reduced cost and time of supplier management)
� Improved HSE protection
� Easier compliance reporting
� Application support
Relationships based on trust, creating value
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AGENDA
▌Introduction
▌Value Chain Position
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▌Brenntag The Leading Chemical Distributor
▌Brenntag in CEE
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Brenntag is the leading global chemical distributorFACTS AND FIGURES
Europe47%
Latin America
9%
Asia Pacific
7%
RoW5% Sales of €9.7bn in 2012
13,000 employees, thereof more than 4,800 dedicated local sales and marketing employees
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North America
32%
Full-line portfolio of over 10,000 products to more than 170,000 customers globally
Network of 450+ locations across more than 70 countries worldwide
3.5 million usually less-than-truckload deliveries annually with average value of €2,000
Brenntag is at your service…VALUE-ADDED SERVICES
Technical ServicesMarketing & Sales Mixing & Blending
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Supply ChainManagement
Online ServicesSingle SourcingSupply ChainManagementSupply ChainExcellence
Concern for our environment:Responsible Care
Commitment to Safe Operations Formulation Advice
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Full-line product portfolio & dedicated industry ap proachTWO CHANNELS TO MARKET
Industrial ChemicalsIndustrial Chemicals
Specialty ChemicalsSpecialty
ChemicalsMajor industriesMajor industries
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Polymers
Cleaning
Animal NutritionPharmaPersonal Care
Food & Nutrition
Coatings
Water Treatment
Oil & Gas
Metal Working Textile & Leather
Chemical Synthesis
Electronics
Agriculture
Pulp & Paper
Printing & Publishing
Adhesives
Construction Chem.
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COMPLEMENTARY MARKET APPROACH
Industrial Chemicals Specialty Chemicals
� Alternative � Long-term partnerships/ Exclusivity
� Product/ logistics � Application knowledge/ product performance/ marketing
Sourcing
Drivers
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� Commercial � Techno-commercial
� Market � Intense knowledge exchange
� Cyclical � Less cyclical
� Product driven � Industry focused
Sales force
Information
Prices
Strategy
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Brenntag is clearly committed to meet HSE standardsBRENNTAG`S HSE PRINCIPLES
Health, safety and environmental protection, are al l paramount for Brenntag and for preserving natural resources for the long-t erm. If it cannot be done safely, Brenntag will not undertake it.
In recognition of the Responsible Care / Responsible Distri bution programof the International Council of Chemical Trade Association s, Brenntagaffirms its commitment to sustainable development and to the eight guiding
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affirms its commitment to sustainable development and to the eight guidingprinciples outlined in this worldwide initiative.
As a global company with more than 300 locations worldwide, B renntag isconscious of its obligation towards the health and safety of its employeesand the environment.
These principles are enforced by policies which ens ure compliance to the highest standards of safety, product stewardship, care for the environment and quality.
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Brenntag is the leading European chemical distribut orFACTS AND FIGURES
CEE22%
Italy9%
Nordic6%
Iberia6%
Switzerland5%
Specialty Chemicals
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Germany17%
United Kingdom
13%Benelux
12%
France10%
9%
Industrial Chemicals
60%
Chemicals40%
Brenntag Europe sales 2012: € 4.3 billion
BRENNTAG EUROPE ORGANISATION
Georg MüllerCFO Brenntag Group
Dieter Wöhrle CFO Brenntag Europe
Managing DirectorsEuropean countries
and regions
Jan-Joop Alberts Marketing DirectorSpecialties Europe
Gordon HayOperations Director
Europe
David O’ConnellMarketing Director
Industrial Chemicals Europe
Steven E. HollandCEO Brenntag Group
Harry van BaarlenCEO Brenntag Europe
Karsten BeckmannCOO Brenntag Europe
T. ChattHead EKAT/
Blending Solutions
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* Contracted to local countries
F. de La Fouchardière
Controlling
H. WillnerFinance Operations
& Logistic
F. HavenEuropean Market
Development Director
P. BrandsFood & Nutrition
M. WilkopPharma & PC
S. Schnaufert *Polymers
T. Heinrich *WT & Cleaning
P. Verboeket *Animal Nutrition
H. van MegenHSE
C. KorrOperations
J. AustMDA
D. O’ConnellChlor Alkali/Solvents
P. JanoczekSourcing
A. Pattyn *General Chemicals
A. Pattyn *Air 1 Business
P. Honoré *Procurement
U. SchierenBusiness
Development
T. CarstensenIT
T. van Elsen *Oil & Gas
M. RadunerREACH & European
Projects Analyst
C. DeslypereGlobal Accounts /
BBS
S. Bolter *Key Accounts
J. NagelKey Accounts
J. EisenbartKey Accounts
M. RimmerCoatings &
Construction
R. NeumannEuropean Product & Marketing Services
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DRIVING SUCCESS WITH INDUSTRY EXPERTISE
Electronic linkage
Extension of supplier‘s strategy into the distribution sector
Regular and detailed market reporting
Joint development and implementation of
marketing concepts
Shared Values -Shared Values -
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Techno-Commercial(engineers and specialists)
Dedicated teams focused on specific industries
Long term partnership with knowledge exchange
Electronic linkage
Flexible logisticsand coordination
Shared Values -Shared SuccessShared Values -
Shared Success
WE PROMOTE QUALITY BRANDS
We are eager to develop strategies with suppliers
We recognize the value of suppliers’ investment in branding
We have a strong track record in executing branding strategies
We promote products according to supplier’s strateg y
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We encourage a collaborative European culture where by our market dedicated experts work in close partners hip with
our customers and suppliers to generate sustainable profitable growth.
SPECIALTY INDUSTRY SEGMENTS
FOOD & NUTRITION PHARMA
COATINGS &
PERSONAL CARE
Coatings at the centre of what we do
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WATER TREATMENT
ANIMAL NUTRITION COATINGS & CONSTRUCTION
POLYMERS
CLEANING OIL & GAS
BRENNTAG SPECIALTIES EUROPE: COATINGS & CONSTRUCTION
Brenntag Coatings & Construction Europe develops and pr ovides new
ideas and perspectives to create solutions by recommending the right
Brenntag Coatings & Construction Europe offers you unparalleled
knowledge, service and solutions in the adhesives, coatings and
construction industries.
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ideas and perspectives to create solutions by recommending the right
products and guidance.
Brenntag Coatings & Construction Europe offers a compr ehensive
package of services, alongside access to specialty produc ts from world-
class manufacturers.
Brenntag Coatings & Construction Europe - Building a br ighter World
BRENNTAG SPECIALTIES EUROPE: C & C PRODUCT PORTFOLIO
Coatings Construction Chemicals
Adhesives & Sealants
Other Raw Materials
Inks Elastomers
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Acrylic Emulsions
Acrylic Resins
Epoxy Curing Agents
Epoxy Resins
Film Formation Additives
Pigments
Polyurethane systems
Accelerators
Acrylic Emulsions
Acrylic Resins
Pigments
Retarders
Super Plasticisers
Acrylic Resins
Epoxy Hardeners
Epoxy Resins
Plasticisers
Polyurethanes
Tackifiers
Acrylic Monomers
Curing Agents
Epoxy Resins
Fumed Silica
Molecular Sieves
Reactive Diluents
Acrylic Resins
Dyes
Pigments
Polyvinyl Butyrals
Solvents
Surfactants
Acrylic Resins
Plasticizers
Polysulphides
PU Elastomers
Silicone Fluids
Silicone Resins
BRENNTAG SPECIALTIES EUROPE: C & C FACTS AND FIGURES
Technical sales force: 74
External sales 2012: Total € 702 million, Specialtie s € 281 million
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Technical sales force: 74
BRENNTAG SPECIALTIES EUROPE
� Integrated European strategy
� Infrastructure with similar business unit structure in all countries
� Industry experts
� Know-how exchange
� Multi-country contracts with suppliers
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� Multi-country contracts with suppliers
� European product management
� Large techno-commercial sales force by industry segment
� European supply chain management
� Coordinated key account business
� Full compliance with EU regulations
Application Centres as integral part of our marketi ng & sales activitiesEUROPEAN APPLICATION CENTRES
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Brenntag operates 25 Application Centres throughout Europe and provides
� Customer specific projects on product improvement or product innovation
� Development of concepts and pro-active marketing toolboxes
� Individual trainings for our customers
� Internal Brenntag training and workshops with our principals
EUROPEAN APPLICATION CENTRES MAP
Colours, Halifax,UK
Coatings & Construction, Kedzierzyn Kosle, Poland
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Decorative Coatings, Amiens FranceCoatings, Budapest, Hungary
AGENDA
▌Introduction
▌Value Chain Position
BRENNTAG SPECIALTIES - Title of presentation 25
▌Brenntag The Leading Chemical Distributor
▌Brenntag in CEE
03/10/2013
LONGSTANDING HISTORY OF MORE THAN 140 YEARS
1874
1990-2000
1970-1979
1966
� Philipp Mühsam founds the business in Berlin
� Brenntag becomes international, acquiring Balder in Belgium
� US business established; continued acquisitions in European andNorth American chemicals distribution business
� Expansion in Europe via acquisitions; takeover of Neuber Group in Austria establishes foothold in Central and Eastern Europe
1980-1989 � Further expansion in North America
1912 � Entry into chemical distribution business
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2000
2008
foothold in Central and Eastern Europe
� Acquisition of Holland Chemical International, at the time the fifth largest chemical distributor worldwide, providing global scale and a leading position in Latin America
� Acquisition of Rhodia’s distribution activities in 8 countries, establishing Asia Pacific platform
2000-2008 � Becoming global market leader; acquisition of LA Chemicals (US, 2006), Schweizerhall (Switzerland, 2006) and Albion (UK and Ireland, 2006)
2010 � IPO; acquisition of EAC Industrial Ingredients, substantially strengthening presence in Asia Pacific
2011 � Market entry in China
2012 � The free float of the Brenntag AG share reached 100% of the share capital, after final placement of Brachem Acquisition S.C.A.
• CEE leader with approx. 6 % market share (excl. Rus sia)
• Over 1.450 employees with more than 600 dedicated lo cal sales employees
• Full-line portfolio of over 30.000 products to more than 26.000 customers
• Network of 40 distribution facilities across 15 cou ntries
Market Leader in Full-line Chemical Distribution
Commercial Track Record
Brenntag in the CEE Market
CEE Market Coverage
Poland
Lithuania
Latvia
Russia
Central NorthSales Offices: 18Employees: ~750Customer: ~15,000
EastSales Offices: 9Employees: ~90Customers: ~1,500
Czech Republic
Slovakia
AustriaHungary
Slovenia
Croatia
Serbia
Romania
Ukraine
Turkey
BulgariaCentralSales Offices: 12Employees: ~490Customers: ~7,500
South EastSales Offices: 6Employees: ~85Customers: ~2,000
Our Value-Adding Function in the Supply Chain
Purchase, logistics and storage of full-line range of specialties and industrial chemicals
– Broad and complimentary supplier partnerships with more than 5.000 suppliers
– Full-line product portfolio of more than 30.000 industrial and specialty products
Pro
duce
r
Logistics StorageFilling
Re-packingLabelling
BlendingFormulation
Application Technical Support
VendorManagedInventory
Delivery & Service
Purchase
Coatings
Custom
erBrenntag in the Value Chain
– Full-line product portfolio of more than 30.000 industrial and specialty products
– Network of 40 warehouses
• Filling, labelling, bar-coding and palletizing
• Re-packing from large into smaller quantities
• Blending and formulation according to customer specific requirements
• Formulating and technical support from dedicated application laboratories
Logistics StorageFilling
Re-packingLabelling
BlendingFormulation
ApplicationTechnicalSupport
VendorManagedInventory
Delivery &Service
Purchase
Pro
duce
rC
ustomer
Our Value-Adding Function in the Supply Chain
• Formulating and technical support from dedicated application laboratories
• Techno-commercial sales force
• Providing just-in-time delivery
• Vendor-managed inventory service
• Product stewardship & Responsible Care
• Supply chain solutions
Logistics StorageFilling
Re-packingLabelling
BlendingFormulation
ApplicationTechnicalSupport
VendorManagedInventory
Delivery &Service
Purchase
Pro
duce
r Custom
erOur Value-Adding Function in the Supply Chain
• Supply chain solutions
• Return services for packing material
CEE Sales StructureYear 2012 Year 2012
Total: 970.744
T
We service more than 26,000 customers covering a br oad range of industries including 2,286 Coatings & Construction producers.
Total: 26.211
Year 2012Year 2012
Major Supply Partners in CEE
We represent broad and complimentary supplier relat ionships with more than 5.000 suppliers and over 30.000 products for all in dustries
Specific Application Centres
Zgierz (Poland)Food & Animal Nutrition
Kedzierzyn (Poland)Coatings & Construction
Budapest (Hungary)Coatings
Guntramsdorf (Austria)Food & Material Science
Customer Days / Seminars
Customer days are key to understanding needs and bringing our suppliers and customers together!
Coating & Construction Seminar in Hungary Spring 2 013