03 May 2013 17:55 [Source: ICIS news]
LONDON (ICIS)--Dutch coatings and specialty chemicals group AkzoNobel is altering its feedstock purchasing strategy to try and reduce costs and cut carbon dioxide consumption, its CEO said on Friday.
The world’s largest coatings company - heavily reliant on petrochemical feedstocks plus inorganics such as titanium dioxide (Ti02) – is investing heavily in innovation to allow it to alter what it uses to reflect market conditions and environmental footprint, Ton Buchner said.
AkzoNobel is a large buyer of Ti02 which makes up around 7-8% of its entire feedstock slate. It also consumes large volumes of petrochemicals such as solvents and resins for its coatings businesses.
“We’re constantly spending innovation money on simplifying our raw material slate and reducing the requirement for expensive raw materials,” Buchner said. “We’re working very hard in our labs to reduce the amount of Ti02 required to create whiteness and opacity for decorative paint.”
The company could see significant gains from this technology once it is commercialised. “The first generation is already out and we’re working on second and third generations in the labs. This is happening across the industry – companies are looking for a reduction strategy on Ti02,” Buchner added.
AkzoNobel is also buying different grades of Ti02 to optimise pricing and carbon footprint. “Our sustainability strategy is also important so we’re looking at suppliers and saying that those with a lower CO2 footprint will be positively judged by AkzoNobel. We want CO2 reduction across the value chain and that includes our supplier base,” the CEO said.
He added that the company is also working with suppliers to see how it can swap from one raw material to another on the basis of a sustainability judgement.
AkzoNobel is taking advantage of increasing supply of Ti02 from China.
“Chinese Ti02 has required some small adaptations in our formulas but it works very well. There has been a lot of capacity coming on-stream there which has helped the industry coming out of the 2011 squeeze,” said Buchner.
Referring to petrochemicals, he said: “We’re trying to build in flexibility to be able to swap from one feedstock to another without altering the characteristics of our products. We have many technologies which would enable us to reduce our exposure to the propylene chain and it’s a continuous effort.”
Asked for his outlook for 2013 on feedstocks Buchner said: “Ti02 is down from last year and we expect it to remain fairly constant for the rest of 2013: within a reasonable band it will be rather predictable. For oil we expected some upward pressure at the beginning of the year and that is certainly the case for some of its derivatives.
"Some of this is linked to shale gas and the changing feedstock slate such as propylene becoming more expensive. Overall we don’t expect to see the spikes in 2013 that we saw in 2011.”
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