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Price increase​, environmental protection pressure! Akzo Nobel and Sherwin-William do this!

Echemi 2021-10-11

As the global supply chain crisis continues to disrupt the global economy, the list of affected industries is growing day by day. Coating manufacturers have continuously increased prices in the past few months to cope with the rising cost of raw materials. However, continuous price increases are not a long-term solution. The fundamental reason for companies to reduce costs and increase efficiency still lies in continuous innovation.


The pressure of raw material price increases sharply

Since the beginning of this year, the cost of all products, from the resins and polymers used to make paints to the steel used to make paint cans, has been rising. Kaj van Alem, director of Akzo Nobel's industrial coatings business in Asia, told reporters that due to the rapid increase in raw material prices, it can be seen that the prices of the entire coatings industry have also been rising in the past 8-9 months.


US paint giant Sherwin-Williams also stated at a recent investor meeting that the industry is facing a shortage of raw materials, which has pushed up the supply costs required to produce paint. Sherwin-Williams predicts that the cost of raw materials this year may increase by more than 10%, and by the fourth quarter it may increase by more than 20%.


However, both Akzo Nobel and Sherwin-William believe that demand in the coatings market is still strong, and therefore not enough to weaken their performance and profit forecasts.


"If you see our performance in the second quarter of this year, you will find that the demand is very strong and the year-on-year growth is still achieved." Wan Linkai told reporters, "So so far we can still reduce the impact of raw material prices, but we There is no denying that in addition to the increase in raw material prices, some raw materials may be out of supply, which may make the situation more complicated."


Guo Zhenhua, President of Akzo Nobel China and North Asia, told reporters that Akzo Nobel's rich business lines can help the company better balance the impact of a single raw material price increase. "Our business in China and the world covers many fields such as ships, airplanes, automobiles, decorative paints, etc. In addition, in the past three years, the company's ‘slimming’ strategy has controlled part of the cost." He told reporters.


In the Chinese market, the driving factor for Akzo Nobel's growth also comes from China's emphasis on sustainable development, which has led to the launch of more and more sustainable development-related projects, such as wind power stations and solar power stations that focus on clean energy.


When asked about the impact of China’s latest energy consumption policy restrictions on the entire chemical industry, Guo Zhenhua said: “Power curtailment will have a certain impact on the entire chemical industry and the coatings industry. The layout of renewable energy, so our factories in China have not exceeded government standards in terms of electricity consumption indicators."


Innovation to respond to environmental pressures

In June of this year, Akzo Nobel launched solar renewable power projects in two decorative paint factories in Shanghai and Guangzhou, installing about 8,000 solar panels and equipment to provide power support for the production lines and office facilities of the two factories.


"We have been paying attention to renewable energy for a long time. Solar energy and wind energy are very important to our future." Guo Zhenhua said, "For example, Akzo Nobel's protective coatings business has also covered the new energy field of offshore wind power and liquefied natural gas. "


The best innovation always comes from cross-border cooperation. In order to discover potential Chinese start-ups, Akzo Nobel recently held the "Creating the Future" Start-up Challenge in China for the first time.

One of the winning representatives from Jinyi New Material Company introduced to reporters that the company is developing an inorganic foundation material that will superfinely grind solid waste such as glass for surface treatment, and hope to apply it in the field of powder coatings. . "Our more environmentally friendly multi-functional fillers can reduce the mining and use of more minerals, and at the same time reduce energy waste, which is helpful to protect the ecology." He told reporters.


A representative of another award-winning box sharing company told reporters that the company is using the Internet of Things technology to promote the circular sharing of product packaging, combining new technologies such as big data, cloud computing, Internet of Things, and smart algorithms with packaging and operations. In-depth integration has built a digital platform for logistics packaging cycle sharing, minimizing the harm and waste of disposable logistics packaging.


Akzo Nobel said that by 2030, the company plans to make sustainable products and solutions account for more than 50% of sales. By 2025, 50% of the plastic packaging materials used in European decorative paint factories will use recycled materials. 


In the past nine years, Akzo Nobel has reduced its waste emissions by 40%, and in 2019 it has reduced its total volatile organic compound (VOC) emissions by 24%. As of the end of 2020, Akzo Nobel has achieved the use of 40% of renewable electricity worldwide, and products and solutions that are conducive to the ecological environment account for 21% of its sales in 2020.


In recent years, multinational chemical giants are also strengthening cooperation in production, education and research with Chinese universities. The Tongji-Covestro Innovation Institute, co-founded by German material manufacturers Covestro and Tongji University, has also gone through ten years and has achieved fruitful results in education, innovation and talent training through school-enterprise cooperation.


Last year, the Institute announced positive progress in a number of joint material research projects in the field of electric vehicles. These projects can help reduce the weight of battery packs, increase the capacity of electrode materials, or enhance the safety performance of batteries. For example, the Research Institute has been exploring battery thermal management systems for electric vehicles and energy storage. This system can not only reduce carbon dioxide emissions, but also be more cost-competitive.


The Institute of Innovation also held for the first time a student competition on the theme of circular economy, focusing on the recycling and reuse of polyurethane foam from mattresses, aiming to encourage students to use their creativity in business and technology and explore innovative solutions.

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