UpdateAkzo Nobel focuses on ops in savings drive

29 September 2008 17:18  [Source: ICIS news]

(adds detail throughout)

LONDON (ICIS news)--Akzo Nobel, the Netherlands-based producer, is planning a raft of measures to achieve additional cost savings and improve performance, a company executive said on Monday.

Leif Darner, AkzoNobel board member and head of performance coatings, said that part of the company’s plans included accelerating efforts to integrate the ICI businesses acquired earlier this year as well as focusing on organic growth.

The growth element is particularly important, he said.

Although the company is cautious about the more mature markets, Akzo Nobel remains confident about emerging markets where it is building new factories, adding staff and expanding the business.

“AkzoNobel has come through a period where the headline has been ‘transformation’, I think now it is ‘operational excellence’,” said Darner.

“This is about managing the portfolio for better performance and adding organically where it makes sense. Never in this company’s history has there been such enormous change in such a short period of time. Our target is to grow faster than the market we operate in.”

Darner said that the company would concentrate on margin improvement, ensuring efficient procurement of raw materials and looking carefully at its cost structure, particularly in mature markets.

In addition to the €340m ($490m) saved through the ICI integration plans, AkzoNobel will aim for an additional net saving of €100m.

The combined effect of this will result in around 3,500 job losses by 2011.

Darner added that the company was in the final stages of selling ICI’s National Starch adhesives and electronic materials businesses to Germany’s Henkel, and was now looking to sell its speciality starches operations.

“We’ve been so busy in disentangling and separating National Starch that we can now focus on what remains,” he said.

“We know what the value of that business is and we’re looking to capture that value. If not, we will continue to run it; it is a good business and this is not a fire sale - we are not desperate to sell.”

Darner said that there had already been some initial discussions.

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By: Andy Brice
+44 20 8652 3214

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