AkzoNobel inaugurates Rs 14.5-crore green factory

After expansion of its industrial coating site in Songjiang, China, which doubled its annual production capacity in 2014, AkzoNobel has set up a new packaging coating facility in Navi Mumbai with an investment of Rs 14.5-crores.

The new plant was inaugurated on 11 July 2014 by AB Ghosh, managing director – industrial coatings and Ashok Joshi, director - packaging coatings at AkzoNobel. Seen as a step to strengthen its position in India and neighbouring countries, the new plant for packaging coating is poised to cater to "vigorous growth" in the packaging segment.

PWI: AkzoNobel has been aggressive in India.
AB Ghosh (ABG): We have been strong in North America, Europe and Brazil. With urbanisation of middle class and Chinese and Indian middle classes poised to be the prominent groups in the respective countries, the metal packaging growth has accelerated and so we have decided to focus on these markets. The market growth has been 6-11%. The main drivers are urbanisation and the lifestyle. In India, 20% of population is middle class. As more urbanisation happens, metal packaging will see growth in India and China. That is the reason we have added capacity with an investment of Rs 14.5-crores.
        
PWI: Tell us about the new plant in Navi Mumbai.
ABG: It is our first packaging coating plant in India. It will cater to both metal and flexible packaging markets with a capacity of 5000 tonnes per year. The aim is to supply local customers with locally made products. The plant will manufacture lacquers and varnishes for the general line and food closures market. It is located in our existing Akzonobel site at Navi Mumbai, which hosts a large decorative plant established in 1997.

We have tried to maximise AkzoNobel assets as best as possible. This facility, which covers 4000 sq/m area boasts of green building concepts. It is modelled on our Vilafranca facility in Spain and is one of our latest designs that ensures best practice performance as it will operate in full compliance with all AkzoNobel health, safety, environmental, and security standards (HSE&S) using the AkzoNobel’s HSE&S Management System.

PWI: At the start of 2014 AkzoNobel completed the expansion of its industrial coating site in Songjiang, China, doubling annual production capacity. It is your biggest packaging coating plant. What is your strategy for the Asian market?
AJ: The Indian story is very similar to China; it is just two to three years behind. We were growing fast, particularly in the beer and beverage segment which is a much bigger market in China than it is in India at this moment. We had already grown quite significantly in China even though we were importing. Our first facility was in Taiwan in 1987, when it wasn’t possible to invest in mainland of China.
In 2008 we invested in our first factory in China and within 3-4 years, the capacity was exhausted and we had to reach out to Taiwan to import again. So growth has been rapid in China. We have 90% plus share of the beer and beverage market. We decided to invest early and expand that capacity in 2014. We hope India will follow the same trajectory.

PWI: What is happening in the packaging coatings segment in India and globally?
AJ: If you look at the packaging coatings market globally, it is 75% serviced by the three global players: Akzonobel, Valspar and PPG. Broadly speaking we have similar shares; there are small differences, in some regions we lead while in others our competitors have stronger positions.
In Asia Pacific in particular, we have been growing organically, there has been no M&A activities. All the support has come from our main businesses in America or Europe. We are leveraging our strengths in those areas to grow. In last 4-5 years we have grown three times.

PWI: Describe your vision for packaging coatings in 2020? Are you bullish about the Indian market?
ABG: The market has been growing at 5-7% in last 3-4 years. We believe that it will continue to grow till 2020. That is the reason for this investment. We want to grow at the rate of 10% in coming years. The Indian players are bringing in more sophistication and hence it requires similar types of products and solutions that are offered in developed countries of the world.

PWI: Are your products similar in developed markets like Europe and US and India?
ABG: There is always going to be customisation for local needs however the main chemistry and the backbone remain similar.
AJ: The customer base is investing in the latest technology of equipments themselves. When they come to Europe and US they acquire equipment for making cans which are similar to those that you see in the developed markets.  Therefore more of the products become usable, however, they still need customisation a little bit because the environment is different in which they operate, temperatures etc. So you always have to do some customisations of our products that is why we have support teams closer to the market, in the market either technical support or even small development. Primarily the main technology is the same globally and we try to leverage that.

PWI: Do you plan to have any M&A in India?
AJ: For the growth markets if an M&A opportunity makes sense and is complementary to our current product range then yes of course. We are not actively going out and trying to grow with an M&A. It has to be selective and has to be something that complements our strengths. M&A for growth markets is an opportunity that we will grab if one comes along.
 
PWI: What is your take on sustainability?
ABG: Sustainability is a key part of our business. For AkzoNobel, business is sustainability and sustainability is business. Our focus is to try and get more value from fuel resources. This is a right thing to do for both sustainability and business. And our customer base is driving our sustainability solutions. Whether it is in raw materials or whether it is packaging how we make products, recycle, energy conservation core value for AkzoNobel.

AJ: All through our factories we are constantly looking at our processes and try to reduce the use of energy and water. Also, the other focus is safety. In our China factory that has been operational since 2008, there have been zero injuries till date. These are the small things we take pride in.
The same philosophy applies to our product development. Wherever we can, we use biodegradable materials. One of our solutions, EvCote product range comprises water-based PET coatings that are produced from reclaimed and recycled post-consumer municipal-waste materials. The paper or paperboard treated with EvCote can be recycled easily without the need of separation as in case of plastic laminated paperboard.

On the metal packaging front we have been working with local players like HTW to encourage the reuse and recycling of metal cans.