AkzoNobel announced plans to invest in the expansion of in-house resin manufacturing as part of the company’s Grow & Deliver strategy.
The scale-up program, which is already underway, will help build resilience against supply disruptions while making an important contribution to achieving the company’s financial and Scope 3 (upstream) carbon reduction ambitions. Resins are a key ingredient for making coatings. They’re used as a binder to hold the pigment particles together and provide adhesion to the coated surface.
“All of our businesses use resins, and while we produce a good proportion of what we need ourselves, commodity and other specialty resins need to be sourced from third parties,” explains Michael Friede, AkzoNobel’s Chief Commercial Officer for Performance Coatings. “Further investing in our own resin capabilities will help us to secure sustainable business growth, as well as supporting our innovation pipeline and sustainability targets.”
The plans include investing in sites, equipment and the people needed to optimally run them. They were developed after an internal resins team was tasked with investigating opportunities to unlock more value and make the company more self-sufficient. The investment is expected to contribute around €15 to €20 million in EBITDA by 2023.
“It quickly became apparent that investing in our own resin capability was the way to go,” continues Friede. “It will enable us to secure raw material supply to optimally support our Grow & Deliver ambitions and, at the same time, we’ll look to generate extra value by leveraging and optimizing the volumes we don’t bring in-house with our network of external partners.
“We’re well aware that demand for resins is only expected to increase,” he adds. “Meanwhile, our resin manufacturing sites have extra production capacity available. So the decision to increase our investment in the production of resins at favorable economics is intended to add important value to our customers and our company.”
The investment is perfectly in line with AkzoNobel’s People. Planet. Paint. approach to doing business. It will specifically contribute to the company’s officially validated science-based sustainability target of reducing carbon emissions across the value chain by 50% by 2030. This target is also aligned with the 1.5˚C pathway of the Paris agreement.