CEO Hans Wijers: “2011 was a challenging year against the background of weaker global economic conditions and unprecedented raw material price inflation. The absolute impact of increased raw material prices for the year was approximately €1 billion. Despite this significant headwind, our reported pricing actions have now offset most of this, and for the year ahead we expect to see the full-year benefit of these increases. In addition, to further reduce our cost base and improve our competitiveness, we recently launched a performance improvement program, which is on track. Our strong fundamentals, geographical spread and commitment to deliver – in combination with the improvement program – give us confidence in the future.”
Performance Improvement Program

AkzoNobel’s performance improvement program, launched in October 2011, will strengthen competitiveness, enhance the company’s ability to grow, simplify support structures and significantly reduce the cost base. This implies a significant change in the operating model and business culture. The comprehensive three-year plan – designed to improve performance and deliver €500 million EBITDA in 2014 – is already expected to deliver €200 million EBITDA in 2012. This implies higher restructuring costs for the coming year. Restructuring activities continue in Decorative Paints in Europe and the US.

The program is on track and the first update on progress and financial impact is due in the company’s 2012 half-yearly report.
Business area highlights
Sustainability Highlights

AkzoNobel has made significant progress on its strategic sustainability agenda. Once again, a number two position was achieved in the SAM benchmark in 2011. Other key ratios also improved:
Sustainability highlights
Outlook for 2012 and Medium-term Ambitions

AkzoNobel aspires to be the world’s leading coatings and specialty chemicals company. The medium-term ambitions are to grow to €20 billion in revenue, increase EBITDA each year while maintaining a 13 to 15 percent margin, reduce OWC percent of revenue year-on-year by 0.5 percent towards a 12 percent level, and pay a stable to rising dividend.

The sustainability ambitions are to remain a top three leader in our industry, to be top quartile in our peer group in terms of safety performance, diversity, employee engagement and development, and eco-efficiency improvement rates.

During 2011 the business faced many challenges, most notably the rapid price increases that affected most of our raw materials and the continuing economic headwinds in many of our major markets.

For the year ahead, the company expects to see the full-year benefit of the price rises that have been achieved so far, and which have now offset most of the raw material price increases. Currently, AkzoNobel is experiencing greater price stability in most raw materials, with the exception of TiO2, which is to continue to rise in price, and for which plans are in place to pass through further price rises in the future. In addition, the company is implementing its performance improvement program, which should bring significant benefits in 2012 and beyond, underpinning margins. As a result, close to 800 employees have been made redundant.

The major uncertainty remains the economic environment. The concerns are focused on the risk of recession in Europe, delayed recovery of the US property market and the potential for a slowdown in China. Each of these can have a significant impact on customers in these regions that would in turn impact AkzoNobel’s sales volumes. These, together with certain raw materials, remain the key sensitivities in 2012.

AkzoNobel has a strong portfolio of complementary businesses, with many leading market positions and exposure to high growth markets. This, combined with ongoing management actions, means that the company is confident of delivering medium-term growth in line with its strategic ambitions.
About AkzoNobel

AkzoNobel is the largest global paints and coatings company and a major producer of specialty chemicals. They supply industries and consumers worldwide with innovative products and are passionate about developing sustainable answers for their customers. Their portfolio includes well known brands such as Dulux, Sikkens, International and Eka. Headquartered in Amsterdam, the Netherlands, they are a Global Fortune 500 company and are consistently ranked as one of the leaders on the Dow Jones Sustainability Indexes . With operations in more than 80 countries, their 55,000 people around the world are committed to excellence and delivering Tomorrow’s Answers Today™

Source: AkzoNobel

“We are pleased to report strong earnings for the quarter, which were the result of excellent execution and generally in line with our expectations. We continue to make progress in restoring our operating margins through pricing, productivity and cost management,” said Gary E. Hendrickson, President and Chief Executive Officer. “In the quarter, we strengthened our balance sheet by issuing a $400 million bond at attractive rates. Despite higher interest expense and challenging global markets, we are raising our full year earnings guidance to $2.92-$3.12.”
About Valspar

The Valspar Corporation is a global leader in the paint and coatings industry. Since 1806, Valspar has been dedicated to bringing customers the latest innovations, the finest quality and the best customer service in the coatings industry.

“We are working together to build a powerful organization, which aims to improve the security of Germany sustained commodity,” said BDI Vice President Ulrich Grillo on Monday in Berlin on the sidelines of the first meeting of the corporate supporters that accompany the start-up phase. The foundation phase is supported free of charge from the Boston Consulting Group, Egon Zehnder, Lovells and PricewaterhouseCoopers.

The Alliance aims to invest in resource projects in order to improve the long-term supply of industrial raw materials in German industry. It is open to other companies as well. Priorities of the alliance’s foundation phase are raw material clarifying, organizational and legal issues and the establishment of corporate structures BDI is not directly involved in the financing and operational work.

The Managing Director of the alliance is Dierk Paskert, Member of the Board of Management of E.ON Energie AG, Munich, Germany. The BDI is developed under the direction of Grillo, the concept for the Alliance. “The company’s focus will be on raw materials for which there are strong supply risks for German industry,” said Grillo, BDI Vice President.

“The alliance will address raw materials at an early stage of the project and will explore opportunities to create purchase and participation options for German companies,” underlined Grillo. In specific cases the raw material alliance will also be active with the extraction and processing of raw materials.
About BDI

The Federation of German Industries (BDI) is an association of associations. As stipulated in the BDI’s statutes, membership is confined to “industrial sector associations and working groups acting as umbrella organizations to represent entire industrial groups within the territory of the Federal Republic of Germany”. Currently, the BDI has 37 Member federations, of which 2 are working groups, and represents the interests of 100,000 businesses with 8 million employees.

Emerald Kalama Chemical, a division of Emerald Performance Materials, announced that it has started the construction of a new operation to produce “K-Flex” non-phthalate plasticizers and coalescents at its facility in Rotterdam, The Netherlands. The new operation is scheduled to be commissioned during the third quarter of 2012. In addition to the new construction, the company has added staff in key commercial and R&D positions to accelerate the growth of this important product platform. The company’s new site has the potential to add capacity as needed to support growth. The glycol dibenzoate esters are fast fusing, high polarity plasticizers for a wide range of applications, such as vinyl flooring, coatings, adhesives, sealants and caulks.

Includes Crop Protection and Pioneer Hi-Bred
Sales of $1.3 billion were up 8%, with 5% higher selling prices and 3% higher volume. PTOI seasonal loss of $(116) million improved $19 million due to higher sales. Full-year sales of $9.2 billion grew 17% with 10% volume gains, 6% higher prices and 1% impact from portfolio changes. Full-year PTOI grew 30% with 19% PTOI margins. In seeds, sales reflected success in each region with volume and price gains. In crop protection, sales growth was delivered in each product line and region.
Electronics & Communications

Sales of $630 million were down 18% reflecting 33% lower volume partially offset by 15% higher selling prices related to pass-through of metal prices. Lower volume reflects destocking in photovoltaics and softness in consumer electronics. PTOI of $42 million decreased on lower volume, partially offset by OLED technology licensing income of $20 million.
Industrial Biosciences

Sales of $289 million and PTOI of $34 million reflect the acquisition of Danisco’s enzyme business. PTOI includes $6 million of amortization expense associated with the fair value step-up of acquired intangible assets.
Nutrition & Health

Sales of $806 million were up $468 million from the acquisition of Danisco’s specialty food ingredients business. PTOI of $52 million reflects the acquisition and favorable product mix in Solae. PTOI includes $20 million of amortization expense associated with the fair value step-up of acquired intangible assets.
Performance Chemicals

Includes Titanium Technologies and Chemicals & Fluoroproducts businesses
Sales of $1.9 billion were up 12%, with 29% higher selling prices and 17% lower volume. Higher selling prices reflect pricing actions to offset higher raw material costs. Lower volume was attributable to a pause in demand for titanium dioxide, particularly in Asia Pacific. PTOI of $433 million increased $118 million on higher selling prices.
Performance Coatings

Sales of $1.1 billion were up 8%, with 10% higher selling prices and 2% lower volume. Higher selling prices reflect pricing actions across all market segments to offset higher raw material costs. Lower volume resulted from destocking and flat/lower builds in all regions except North America. Demand continued to be strong in the North American OEM motor vehicle and heavy duty truck markets. PTOI of $58 million decreased on weaker mix and a $7 million settlement.
Performance Materials

Includes Packaging & Industrial Polymers and Performance Polymers businesses
Sales of $1.6 billion were up 1%, with 14% higher selling prices and 13% lower volume. Higher selling prices offset higher raw material costs. Lower volume reflects broad-based channel destocking along with softening in consumer and industrial markets. PTOI of $151 million decreased due to lower volume and the absence of a prior year $31 million combined benefit from an acquisition and an early termination of a supply agreement.
Safety & Protection

Includes Building Innovations, Protection Technologies and Sustainable Solutions businesses
Sales of $943 million were up 10%, with a 7% increase from the MECS acquisition and 5% higher selling prices, partially offset by 2% lower volume. Higher selling prices more than offset raw material cost increases. Volume was lower on destocking in the industrial markets. PTOI of $94 million was essentially flat. Prior year included a net $11 million charge related to an asset impairment and a separate gain on an asset sale.
About DuPont

DuPont has been bringing world-class science and engineering to the global marketplace in the form of innovative products, materials, and services since 1802. The company believes that by collaborating with customers, governments, NGOs, and thought leaders we can help find solutions to such global challenges as providing enough healthy food for people everywhere, decreasing dependence on fossil fuels, and protecting life and the environment.

GlycosBio Asia Sdn. Bhd. is a subsidiary of Glycos Biotechnologies Inc, an international biochemical company in U.S.A. focused on commercializing renewable, high-value specialty chemicals. Bio-XCell Sdn. Bhd. owes and develops a government-supported biotechnology industrial park focused on the advancement of industrial and healthcare biotechnology in Malaysia.

This plant is to produce industrial grade bioethanol from crude glycerin. Toyo-Malaysia will execute the project under a turnkey contract covering Engineering, Procurement, Construction and Commissioning. The project is scheduled for completion in the second quarter of 2013. The plant will be developed in several phases with a total production capacity rate up to 30,000 tons per year being reached by 2014.

TOYO will work to enhance its business activities in Malaysia where active capital investment is expected to continue.

In July 2011, Toyo Malaysia was awarded a contract to build a Flare Gas Recovery Unit by PETRONAS Gas Bhd., a subsidiary of state owned PETRONAS, located in client’s existing Gas Processing Plant (GPP-A&B) in Terengganu. This plant will be the project to recover sizeable quantities of Gas which otherwise will be flared and re-routed after compression as valuable sales gas and fuel gas. The project will also contribute towards significantly reducing greenhouse emissions from the gas units. Including these two projects, the order backlog of Toyo Malaysia in 2011 has reached about 300 million ringgit (96 million USD) which is the highest amount since Toyo Malaysia’s formation in 1986.
About Toyo Engineering Corporation

Toyo Engineering Corporation is an engineering, procurement and construction company serving mainly the hydrocarbons (oil and natural gas) and petrochemical sectors worldwide. It was established in 1961. Its various business include R&D collaboration, design, engineering, equipment procurement, construction, test operations and technical guidance in such areas as general chemicals, petrochemicals, oil refinement, natural gas, electric power, nuclear power, advanced production systems, distribution, medical facilities, biotechnology, environment at each manufacturing plant, procurement, development and sales of systems engineering and other software.

PPG’s annual sales for 2011 were $14.9 billion, an increase of 11 percent versus 2010 sales of $13.4 billion. PPG’s full year 2011 net income was $1.1 billion, or $6.87 per diluted share, versus 2010 net income of $769 million, or $4.63 per diluted share. Full year 2010 adjusted net income was $854 million, or $5.14 per diluted share. The company’s full year tax rate on ongoing earnings was 25 percent in 2011 and 26 percent in 2010.

“PPG achieved record earnings per share each quarter this year by focusing on strong execution in its global businesses, aggressive cost management and amplified cash deployment,” said Charles E. Bunch, PPG Chairman and CEO. “In so doing, we delivered the best full year earnings per share in PPG’s history.

“This strong performance was achieved despite moderating global growth rates during the fourth quarter,” Bunch said. “During the year, we experienced uneven economic conditions, persistent raw material inflation, and continued anemic construction activity in developed regions. However, the geographic and end-use market diversity of our business portfolio continued to be an important benefit in 2011.”

The acquisition will further strengthen AkzoNobel’s leadership position in specialty surfactants while enhancing its manufacturing footprint in Asia. This transaction was first announced on July 27, 2011.

Established in 1993 and based in the province of Shandong, Boxing had revenues in 2010 of approximately €100 million; its activities will be integrated into AkzoNobel’s Surface Chemistry business.

Demand in Asia for amines and derivatives is being driven by population growth, the expanding middle class, increased focus on sustainability and the build-up of infrastructure, notably in China and India. The acquisition underlines the company’s determination to accelerate growth and to build leadership positions across all global markets, in line with AkzoNobel’s Value and Values strategy.
About AkzoNobel

AkzoNobel is a global leader in the manufacture and supply of specialty surfactants as well as synthetic and bio-polymers additives, all of which are used as formulation ingredients and process aids in many applications ranging from home and personal care to asphalt road paving.

AkzoNobel currently employs over 6,700 people in China, with 2010 revenue totaling €1.3 billion. The majority of revenue is generated from local demand. The company’s ambition is to achieve revenue of $3 billion in China by 2015.

In France Bluestar Silicones has inaugurated its new resin manufacturing unit in its Saint Fons factory. The new production unit, named IRIS, will enable the resin production capacity to be doubled. “This investment at Saint Fons will enable us to capture growth exactly where it is, while strengthening our market share in the other more mature sectors,” said Pascal Chalvon Demersay, Bluestar Silicones chairman. “This capacity increase is exactly in line with our development strategy for global sales with new key accounts in markets where we already have a strong position.” This EUR 7 million project represents the greatest investment made by the company at the Saint Fons plant for over ten years.