The "crisis" hidden behind the rapid development of paint giants

The debt crisis in Europe is difficult to cure for chronic illnesses, the US debt crisis has raised alarms, the global economy is in turmoil, and the numerous layoffs of well-known multinational companies are currently facing issues that AkzoNobel, the world's top 500 old European company, is apparently facing. Happy troubles"

“The only thing that we currently determine is that we live in a world full of uncertainty.” At the headquarters of the company in Amsterdam, the Netherlands, AkzoNobel chief executive officer Wei Siwei interviewed the reporter and used a gentleman’s humor to describe the external economic environment. However, for the company's established growth targets, Wei Siyi has no doubt that “above the market growth rate means that we are quite likely to have more than 5% growth.”

“To deal with these uncertainties, we have some principles, such as not putting all eggs in a basket or spreading the risk globally. This is what we need to do.” If divided by geographical regions, Akzo Novo Bell's sales revenue is 40% in the European market, 30% in the American market, and the remaining 30% in the Asia-Pacific region and other markets. But Wei Sikai prefers another method of division: 60% of businesses are in mature markets, 40% of Sales revenue comes from emerging markets or high growth markets.

However, in the future, China, which will become its largest market, how does this European company, which previously looked very conservative and low-key?

Global financial market turmoil, Akzo Nobel, the world's paint giant disputed on the board most content, not layoffs, but how to allocate the proportion of investment in emerging markets, and how to quickly open the market through mergers and acquisitions, to minimize the risk, Maximize returns.

Investment in many regions In AkzoNobel's “contrarian growth” with sales of 16% in the first quarter of this year, the continued strong growth contribution of emerging markets contributed the most, with the growth rate of the Chinese market reaching as high as 25.3%.

“The way we see the world economy is this way. China is indeed one of the most important promoters of the world’s economic development. We also hope to be one of the major winners in this economic development trend. But this means that we are only in China. Are you investing? No, we will develop in any place with potential for development. Of course not only China," said Wei Siyi.

Accelerating expansion in high-growth markets is a major strategic change that AkzoNobel proposed last year. Emerging, high-growth markets such as Turkey, Brazil, Russia, Indonesia, and Latin America are all targets of their expansion. In fact, the high-performance paint department of one of AkzoNobel's three core businesses has reached 50% of its sales from high-growth markets.

Although the growth of the global population and wealth has given emerging markets a strong demand, prices are still an important factor that customers often consider. Although the mid-market is large, it is not so good. The demand for growth in emerging markets is also gradually increasing.

M&A opens up a new round In 2010, AkzoNobel's three core businesses - sales of high-performance coatings, specialty chemicals, and decorative paints - accounted for 33%, 33%, and 34%, respectively, and the income distribution was exceptionally even. This is not a coincidence.

“This is the result of our strategic choices over the years. The three major business segments are now in the top or the top three positions in the market. But if we say that a certain business unit has not grown or is not profitable, we will spin it off. This is what we have done in the past.” The strategic choice that Wei Si’s said, the specific form is actually M&A.

Akzo Nobel’s board member and management committee member, Dhenna, who is in charge of high-performance coatings, also made it clear in an interview with reporters: “In some countries or regions where we are not very competitive, we will conduct some mergers and acquisitions, for example, in China. Changzhou Freem was acquired.” It is reported that in September 2010, Akzo Nobel acquired Fotom Automotive Coatings Co., Ltd., one of the largest automotive refinish suppliers in China, and quickly occupied the mid-range market; The purchase of Shandong Boxing Huarun Grease Chemical Co., Ltd. to fill the gap in the mid-range market.

The expansion of China may not have an era that will enable China’s economic planning to draw close attention from many global companies.

In fact, AkzoNobel has set a target of doubling the sales revenue of the Chinese market to $3 billion during the "12th Five-Year Plan" period. Moreover, bets have already begun.

In November 2010, AkzoNobel announced that its largest single investment project so far in Ningbo, the diversified base was officially launched, with an investment of up to 275 million euros. Later, at the beginning of this year, the company’s board of directors resolved to increase the Ningbo project investment to 320 million euros.

Wei Sijun said: “The Chinese market is one of the key priority markets for AkzoNobel's future development. At present, it is also the company’s second largest market, but in the near future, it will definitely become the largest market. “Our global R&D resources have been invested in China. 11%, already invested in the Netherlands and the United Kingdom, and will further increase. Their R&D results are not only for the Chinese market but also for the global market. ”

In addition, it is worth noting that on September 1st, Akzo Nobel appointed Lin Liangqi, who was born in China, to assume the post of president of China. He also seems to have foreshadowed that the paint giant in more than 80 countries in the world has reached an upsurge in China’s expansion.