1

● Crown Paints invests US$2.5 million in Kigali 2

● BASF receives Excellent Supplier: Leading Technology Award from Shanghai General Motors in China

3

● PPG installs electrocoat primer system at Coast Guard Aviation Logistics Centre 3

● AkzoNobel full-year and Q4 2014 results – strong underlying performance 5

● Grace to separate into two industry-leading public companies 7

● Huntsman announces plan to reduce its European titanium dioxide (TiO2) capacity… to begin capacity expansion at Singapore polyetheramines plant

9

● A PROFILE OF THE AFRICAN PAINT INDUSTRY 2014 11

Jotun Paints announces significant KES 250 million investment in

Kenya

Jotun, one of the world’s major paint manufacturers, has

announced that it has made a significant investment in

Kenya, with an aim to strengthen its market presence in the

East Africa region. The investment totals to KES 250 million (US$3 million) and will be

utilised to set up regional offices in Nairobi to develop a fully operational warehouse and as

well as recruiting and developing skilled teams for the brand in the country.

Speaking at the launch of the regional office in Nairobi, Mr Peder Bohlin, Vice President

Jotun, Middle East, India & Africa (MEIA), “East Africa is a key emerging market for Jotun.

With this investment in Kenya, the brand is in the midst of strengthening its distribution

network across the region and aims to recruit more dealers and customers to support this

business objective.”

Although the brand was originally set up in Kenya through an agent (Hardware and General

Stores) in 1995, Jotun’s investment now establishes the brand as a legal entity in the

country. Products are being imported from

Jotun facilities located in Egypt

and Dubai, and

CUBE

696 13 February 2015

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CONTENTS

2

Jotun will initially focus on offering protective coatings and decorative paints as part of its

portfolio.

Jotun is currently employing local staff in the sales, marketing, financial control and supply

chain departments. Jotun will focus on producing unique products and concepts. “We are

here to grow the overall market by offering customers world class quality products,” says

Ashish.

Source: Jotun, 26 January

East Africa’s

leading paint

manufacturer

Crown Paints has

announced its entry into Rwanda with the

establishment of an ultra-modern paint

showroom in Kigali with a five year plan to

invest about US$2.5million in the country.

Rwanda now becomes the third country

to host Crown Paints’ showrooms in East

Africa as the paint maker also owns five

others in Kenya and one in Tanzania.

According to Crown Paints Group Chief

Executive Officer (CEO) Rakesh Rao, the

company aims to transform the lives of

Rwandese by creating more job

opportunities and contributing to the

country’s economic growth as it also aims

to establish a paint factory in Rwanda.

“We aim to recruit more customers and

equip them with knowledge on our paints

portfolio. There is a boom in the

construction sector in Rwanda and

consumer tastes are changing fast, with

more people using texture and stone

finishes,” said Mr. Rao.

The opening of the showroom in Rwanda

comes after Crown Paints opened a depot

in Kigali six months ago.

According to Mr. Rao the firm has full

confidence in the Rwanda market and

believes it’s the next frontier for its

growth in the coming years. “With the rise

in construction, the Rwanda market has

posed great opportunity for Crown Paints

and we have gained a great level of

stability in a short period. The market

offers a lot of opportunity for quality

paints,” he explained.

The showroom will also serve customers

from the Democratic Republic of Congo

(DRC) and Burundi.

Crown Paints has grown to become a

company with an annual turnover of

US$61.2million and is now producing 2.3

million litres of paint per month.

Crown Paints specialises in decorative

paints, automotive paints, coatings,

adhesives, flooring and niche paint brands

such as Amourcoat, Silicon, Acryline,

Flowcrete amongst others.

Source: Crown Paints, 9 February

Crown Paints

3

BASF offers its customers individual coatings solutions as the

automotive industry focuses on sustainable manufacturing

processes. The Coatings division has now been awarded the

“Excellent Supplier 2014: Leading Technology Award” by

Shanghai General Motors Co., Ltd (SGM).

As the only coatings supplier to win the annual award, BASF Shanghai Coatings Co., Ltd.

stood out from around 4,000 SGM suppliers due to its excellent on-site service and leading

technology. “We appreciate our long-term partnership with BASF. We are impressed by

BASF’s timely and efficient on-site service, which supports our business development and

sustainability goal,” said Adam Chang, Senior Manager Purchasing Department, Shanghai

General Motors Company Ltd. “With BASF’s innovative coatings technology, we have

reduced solvent use and volatile organic compound emissions in our painting lines,

achieving a more sustainable car manufacturing process.”

Since 1998, BASF has been a reliable partner to SGM supplying a full range of automotive

coating products, including waterborne coatings and CathoGuard® 800 e-coat. The latest e-

coat product line CathoGuard® 800 does not contain tin and is recognised for its low solvent

content.

“We are thrilled to have received this annual award. Our account management team,

technical team and on-site service team always work closely with our customers to ensure

the best operation and performance of our products,” said Dr. Thierry Herning, General

Manager, BASF Shanghai Coatings Co., Ltd.

BASF Shanghai Coatings Co., Ltd. is a joint venture between BASF Group and Shanghai Huayi

Fine Chemical Co., Ltd., with more than 17 years of successful partnership.

Source: BASF, 9 February

PPG Industries’

aerospace coatings

group has installed

the first commercial

system in the US for

application of its aerospace electrocoat (e-

coat) primer to aircraft parts at the US

Coast Guard Aviation Logistics Center,

Elizabeth City, North Carolina. The

Aviation Logistics Center has reduced

primer application and processing time

from hours to minutes and full cure time

from days to an hour with AEROCRON™

electrocoat primer.

Primers afford corrosion resistance to

metal parts and enhance topcoat

BASF

PPG

4

adhesion. Traditional primer is spray-

applied, creating overspray and

nonuniform film thicknesses that result in

lower application efficiencies and higher

coating weight. In the electrocoating

process, metal aircraft parts are immersed

into the Aerocron primer bath and then an

electrical charge is applied. The primer is

attracted to the charged part, resulting in

uniform film thickness over the part, even

in recessed and hidden areas. The water-

based, chromate-free electrocoat primer

produces near-zero waste and affords

significant weight savings.

“This is a major step for the US Coast

Guard as a trailblazer in this needle-

moving technology within the aerospace

industry,” said Duane Utter, PPG global

Segment Manager, military aerospace

coatings and defence products. “We

appreciate their confidence in PPG and

will work with them to ensure their

continued success. They have processed

many parts successfully and are exploring

opportunities for additional e-coat

applications.”

The Coast Guard Aviation Logistics Center

used PPG chromate-containing aerospace

primers and advanced-performance

topcoats when officials asked about PPG’s

electrocoat technology. After successfully

landing a contract, PPG designed a

customised system to meet the Coast

Guard’s process requirements.

“The transition to using the Aerocron e-

coat primer application process is a

tremendous advancement from

traditional spray primer applications and

will greatly help consumers like the US

Coast Guard work toward chromate and

waste reduction initiatives,” said Ed

Mullins, Sales and Market Development

Manager at PPG’s Atlanta application

support centre. “Adoption of this

revolutionary technology occurred quickly

for the US Coast Guard by involving

people who routinely work in the plating

shop at the Elizabeth City Aviation

Logistics Center, which in some ways is

similar to the e-coat process.”

In the e-coat process, after parts are

pretreated, they are dipped into the

Aerocron primer electrocoat bath, rinsed

and thermally cured to achieve final

coating properties. PPG makes the resin

and paste components for Aerocron

primer at its Oak Creek, Wisconsin, and

Springdale, Pennsylvania, coatings plants.

These components are dispersed in water

in a dip tank. The PPG system also

includes an immersion rinse tank and a

spray rinse tank, a cure oven and lab-

related equipment.

Mullins and Robin Peffer, research

associate at the PPG Coatings Innovation

Center in Allison Park, Pennsylvania, were

on-site for a final cleaning and test

operation of the system with water for

the Coast Guard before filling the tank

with primer and monitoring the system.

In addition to this first US Aerocron primer

tank, several pilot and production e-coat

tanks have been installed in Europe for

evaluation and operation by PPG

aerospace coatings customers.

Electrocoating, also called

electrodeposition coating and commonly

referred to as e-coat, uses electrical

5

current to apply a coating to a conductive

substrate submerged in a water-based

paint bath. The process can be fully

automated.

Aerocron electrocoat primer is water-

based for low solvent emissions.

Compared with conventional spray

priming, e-coat provides increased

productivity and efficiency, affording

nearly 100-percent material utilisation

and no overspray. Also, the e-coat process

produces minimal waste because it

returns rinses back into the electrocoat

bath. Only the amount of primer needed

is deposited onto the metal surface, which

results in uniform film thickness and

minimises the weight of the finished part.

Aerocron primer is qualified to SAE

International’s Aerospace Material

Specification 3144 for anodic

electrodeposition primer for aircraft

applications.

Source: PPG, 9 February

AkzoNobel has reported positive volume growth and an improvement

in return on sales (ROS) for the full-year 2014. Excluding incidentals,

ROS was 7.5 percent (2013: 6.1 percent).

Operating income excluding incidentals grew 20 percent to €1,072

million (2013: €897 million), reflecting higher benefits from ongoing operational efficiency

programmes and lower restructuring charges, offset by higher adverse incidental items.

Contrary to positive incidental items of €61 million in 2013, mainly related to gain on

divestments, the negative incidental items of €85 million in 2014 relate to provisions for

legacy items, an external fraud suffered by one of its subsidiaries in the US, and project

costs related to a divestment. Net income attributable to shareholders was €546 million

(2013: €724 million which includes exceptional items). Revenue for the full year declined 2

percent, with volume up 1 percent in all Business Areas, more than offset by negative

currency effects and divestments.

CEO Ton Büchner: “For the full year we achieved further improvements in our operational

performance, visible in our return on sales and return on investment levels. The

introduction of several commercial excellence initiatives will help us drive organic growth

going forward. 2014 was challenging, evidenced by negative currency effects, a continued

lack of growth in Europe and a slowdown in some of the Asian and Latin American

economies. During the year, we continued to build a solid foundation and remain on track

to deliver on our 2015 targets.”

AkzoNobel

6

“The year was also notable for several key achievements. A major highlight for us in 2014

was the launch of our Human Cities initiative and our partnership with 100 Resilient Cities.

We introduced the first carbon credit methodology for the international shipping industry,

which allows ships to generate income in the form of carbon credits by reducing CO2

emissions. We were also especially pleased to be ranked first on the Dow Jones

Sustainability Index (in the Materials industry group) for the third year in a row.”

Decorative Paints successfully implemented a new operating model in Europe. Volumes for

the full year were up 1 percent with a positive volume development in Asia. Revenue

declined 6 percent compared with 2013 due to divestments, adverse currency effects and

an adverse price/mix effect. Q4 revenue was down 1 percent, mainly driven by the sale of

the German stores, which offset 3 percent revenue growth in Asia and 6 percent revenue

growth in Latin America. Operational results clearly improved.

Performance Coatings continued to profit from operational improvements and successfully

introduced a new organisational structure with fewer management layers. Volumes for the

full year were up 1 percent, mainly from growth in Marine and Protective Coatings and

Powder Coatings. Revenue was flat compared with the previous year due to adverse

currencies. Q4 revenue was up 4 percent on 2013 due to favourable currencies and

price/mix, with 4 percent revenue growth in Powder Coatings and 8 percent revenue

growth in Marine and Protective Coatings.

Specialty Chemicals showed increased volumes and increased its profitability in 2014, the

latter due to significant savings from restructuring programmes. Volumes for the full year

were up 1 percent. Revenue was 1 percent lower due to headwinds such as price pressure in

caustic, unfavourable currency developments during the first half of the year and

interruptions in supply chain and manufacturing. Q4 volume was 1 percent down, due to

production interruptions in Rotterdam and market reactions following the large oil price

reduction, leading to destocking. Q4 revenue was in line with the previous year, with the

adverse impact of volumes and divestments being offset by a favourable currency effect.

Outlook

We anticipate that significant developments in raw material prices, combined with relevant

exchange rate movements and lower growth rates in high growth economies, will principally

determine the dynamics of 2015. The preparations made during 2013 and 2014 will form a

sound basis for further improvements in 2015. AkzoNobel remains on track to achieve its

targets for 2015.

Source: AkzoNobel, 12 February

7

W. R. Grace &

Co. has

announced that its Board of Directors has

approved a plan to separate into two

independent, publicly traded companies.

The two companies, to be named prior to

closing, will be “New Grace,” comprised

of Grace’s Catalysts Technologies and

Materials Technologies business segments

(excluding the Darex packaging business),

and “New GCP,” comprised of Grace’s

Construction Products business segment

and the Darex packaging business. The

separation transaction is intended to be a

tax-free spin-off to Grace shareholders for

US federal income tax purposes, and is

expected to be completed in

approximately 12 months.

“Grace has created significant shareholder

value by focusing on our customers,

driving innovation and growth, and

executing a disciplined capital allocation

strategy,” said Fred Festa, Grace Chairman

and Chief Executive Officer. “Our Board

and management team continuously

evaluate strategic options to create value

and, after a comprehensive review,

determined that this separation is in the

best interest of the Company and our

shareholders. The time is right to create

two strong, independent companies that

will benefit from improved strategic focus,

simplified operating structures, and more

efficient capital allocation.”

“We have a world class team of talented

people who have worked hard to

transform Grace into a high performing

company. Those efforts allow us to take

this next important step in our evolution,”

continued Festa. “We’re confident that

both teams will maintain the customer

focus and commitment to growth and

value creation that have been keys to our

success.”

The Company believes that the planned

separation will:

Enhance Strategic Focus: Two

strong, focused operating

companies with industry-leading

market and technology positions,

strong free cash flow and high

returns on invested capital will be

created through this transaction.

Each company will be positioned

to capture its distinct growth

opportunities, focused on its

unique customers, with more

efficient capital allocation and the

scale and cash flow needed for

growth and value creation.

Simplify Operating Structures;

Create Strong Financial Profiles:

Each company presents compelling

growth and margin profiles.

Simplified operating structures will

improve management focus and

allow improved cost productivity

and optimised functional support.

Optimised capital structures will

provide financial flexibility to

pursue organic growth and M&A

opportunities.

Create Distinct Investment

Identities: New Grace and New

GCP will provide unique and

compelling investment

opportunities with different

growth drivers and simpler

Grace

8

investor theses. Investors will have

the opportunity to evaluate and

invest in each business based on

its respective financial profile,

performance and prospects.

Two Focused Businesses

New Grace: After the separation, New

Grace will consist of the Company’s

existing Catalysts Technologies business

and its Materials Technologies business

(excluding the Darex packaging business).

The Company expects New Grace to

continue to be a global leader in process

catalysts and speciality silicas. New Grace

will be a high margin, technologically

advanced business focused on growth,

margin expansion and strong cash flow.

With its materials science expertise and

complex manufacturing capabilities, New

Grace will continue to deliver high-value,

differentiated technologies to maintain its

global leadership positions and drive

additional growth and margin expansion.

The business will remain differentiated by

best in class manufacturing, technical

sales and service and R&D.

Post separation, the Company expects

New Grace to have sales of approximately

$1.8 billion (approximately $2.2 billion

including sales from the unconsolidated

ART JV). The Company believes that New

Grace will seek to make strategic bolt-on

acquisitions in its core segments as well as

acquisitions to expand its high margin,

high-performance speciality chemicals

and performance materials portfolio. The

Company expects New Grace’s net

leverage at the time of the spin-off to be

between 2.0x and 2.5x Adjusted EBITDA.

New GCP: The Company expects New GCP

to continue to be a leader in cement and

concrete chemicals, speciality building

materials and can sealants and coatings

with strong brands and positions. New

GCP will aim to leverage its independent

company platform and strong free cash

flow to accelerate growth in its global

construction products segments and to

maintain its segment leadership positions

in can sealants and coatings. New GCP will

have the financial flexibility to grow both

organically and through acquisitions in its

construction products business.

Including Darex in the new company

provides significant value to New GCP,

including higher and more stable cash

flows and margins. The businesses also

share many integrated manufacturing

sites around the world, providing strong

operating leverage. With Darex, New GCP

can support higher financial leverage,

giving it additional resources to pursue its

growth objectives.

Post separation, the Company expects

New GCP to have sales of approximately

$1.5 billion. The Company expects New

GCP’s net leverage at the time of the spin-

off to be between 3.0x and 3.5x Adjusted

EBITDA.

Experienced and Proven Leadership

Upon completion of the transaction, New

Grace will continue to be led by Fred

Festa, Chairman and Chief Executive

Officer, and Hudson La Force, Senior Vice

President and Chief Financial Officer.

9

Greg Poling, currently President and Chief

Operating Officer of Grace, will lead New

GCP as President and Chief Executive

Officer.

Source: Grace, 5 February

Huntsman Corporation has announced a plan to reduce its

TiO2 capacity by approximately 100kt, representing 13% of

Huntsman’s European TiO2 capacity. The plan will generate

approximately $35 million of annual savings. Having looked at different options Huntsman

proposes to close specific operations at its Calais, France site. Huntsman plans to close the

‘black end’ manufacturing operations and ancillary activities during 2015. The ‘black end’ is

responsible for the start of the titanium dioxide manufacturing process. The ‘white end’ is

used to finish and pack TiO2 and will remain operational employing up to 100 people on the

site.

Peter R. Huntsman, President and CEO of Huntsman Corporation, commented: “With the

recent deterioration in industry conditions we have reviewed our manufacturing network in

terms of cost and potential. We are confident that by rationalising our capacity we can

continue to meet our customer’s needs and improve our competitiveness as we create a

market leading Pigments and Additives business.”

This announcement is in addition to the plan announced in December 2014. Annual cost

savings from that plan are expected to be approximately $130 million and will be achieved

by the middle of 2016.

Other Huntsman news

Huntsman Corporation has announced it will begin construction on a 25,000-tonne capacity

expansion programme at its world-scale polyetheramine facility in Singapore in the first half

of 2015, taking total capacity to 50,000 tonnes.

Huntsman is investing $100 million for this latest expansion at its Jurong Island facility,

which will also include backward integration to produce polyethers from locally sourced

feedstocks. This project is intended to help the company meet growing global demand for

polyetheramines and to strengthen its leadership position in this technology.

Construction of the new facilities is expected to be completed in the second half of 2016.

“We expect demand for our amines products to increase across all regions over the next

decade, particularly in Asia-Pacific – where volume is set to grow by at least 10 percent per

year,” noted Huntsman President and CEO, Peter R. Huntsman.

Huntsman

10

“Combined with our other existing polyetheramine manufacturing facilities in Conroe,

Texas, and Llanelli, Wales, the expansion at our Jurong site will help us respond more

quickly to customer demand, not only in the rapidly growing Asia market, but also around

the globe,” Stu Monteith, President of Huntsman’s Performance Products division added.

Polyetheramines are used as ingredients to improve the properties of many products,

including paint, adhesives and composites. They can be found in everything from home

decoration products, sports equipment, cars, construction materials, washing powders and

speciality plastics.

Source: Huntsman, 12 February and 4 February

11

A PROFILE OF THE AFRICAN PAINT INDUSTRY

IRL is pleased to announce the launch of a new edition of its regional title A Profile of the

African Paint Industry. This fully updated report provides market data for 2013 and

forecasts for 2018, and gives an overview of the paint industry trends across 20 countries

in the region.

The total market for paints and coatings in the African continent was over 1.4 million tonnes in 2013. This could reach a total of 1.7 million tonnes by 2018 provided an annual growth rate of 4.0% is attained.

The architectural and decorative coatings for consumer and professional users correspond to a staggering 83.4% of the total demand for paints. This is also one of the fastest expanding segments due to the growing amount of construction activity. With the emergence of a middle class and the improving purchasing power of consumers, the quality of paints is also evolving. In addition, anti-bacterial decorative paints are entering the market and have been used on the interior walls of public buildings such as schools and hospitals.

The use of industrial coatings remains limited in Africa. Industrial wood coatings together with general industrial coatings are the main industrial coatings employed. The higher performing protective, marine and automotive coatings are scarcely used due to the small-scale oil, marine and vehicle production industries in the region. There is much interest centred on powder coatings due to their higher levels of protection.

On a country-by country basis, South Africa stands out as the largest paint consumer in the region, closely followed by Egypt. However, South Africa’s per capita paint consumption (5.6 kg/head) is almost double that of Egypt (2.9 kg/head). Although South Africa’s economy contracted during the global financial crisis, it has now recovered but growth has since slowed down. The demand for paints and coatings has followed the same fate, showing the lowest growth rate in the region (CAGR 2.5%) over the forecast period. In contrast, the demands for paints in Mozambique (CAGR 7.4%), Libya (CAGR 7.1%) and Ethiopia (CAGR 6.7%) are showing the fastest expected growth rates, which is unsurprising given the low overall paint consumption levels and the increased investments in the countries in question.

83%

17%

African Paints & Coatings Market by Segment, 2013 Total Market: 1.4 million tonnes

Architectural Industrial

NEW FROM IRL

12

‘A Profile of the African Paint Industry’ gives an insight into the market changes in the past few years, as well as outlining the key trends affecting the decorative and industrial coatings segments for each individual country covered.

For more information on this and our other reports, please contact Cathy Galbraith at: cgalbraith@brggroup.com

19%

18%

14% 10%

9%

6%

24%

African Paints & Coatings Market by Country, 2013 Total Market: 1.4 million tonnes

South Africa

Egypt

Algeria

Morocco

Nigeria

Tunisia

Rest

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