Chemical company paints rosy picture for the future

By Wang Zhuoqiong (China Daily)
Updated: 2010-11-15 16:51
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Chemical company paints rosy picture for the future

A vessel being painted with Intersleek 900, made by AkzoNobel International. It is a unique patented fluoropolymer anti-fouling coating and marks the very latest advances in such technology, according to the company. AkzoNobel has set even higher performance standards for its products, saying they lead to improved fuel efficiency and reduced emissions. [Photo / China Daily] 

BEIJING - How can a chemical company earn more money through eco-friendly products?

The Amsterdam-based paints and coatings producer AkzoNobel believes it has the answer, saying sustainability can inspire innovation.

For example, Intersleek, a smooth non-stick antifouling coating product, can save up to 9 percent of the fuel use of container ships.

"If all container ships used this antifouling product, another 90 million tons of carbon emissions could be reduced and about $2.5 million in fuel costs over a two- to three-year period can be saved," said Andre Veneman, corporate director of sustainability at AkzoNobel.

Container ship companies are prepared to pay a premium price for the coating because in the long term it saves them money.

Intersleek shows sustainable growth is no bar to growth in profits.

With its portfolio including Dulux, Sikkens, International and Eka, the chemical producer had revenues of 13 billion euros ($9.49 billion) in 2009, with 37 percent from emerging markets. The figure was only 12 percent in 1995 and is expected to surge to at least half of the revenue by 2015.

The company's revenues in China is set to be doubled from $1.5 to $3 million. It has 27 factories in China out of its 350 worldwide. In Brazil, the plan is to double its revenues from 750 million euros to 1.5 billion euros and in India it is from 250 million euros to 1 billion euros.

Over the next decade, China will build about 200 new cities, each with a population of about 1 million.

"Construction will be very big in new markets such as China, Brazil and India," said Veneman.

On average 40 percent of the use of energy, carbon emissions and raw materials are linked to the lifetime of housing and construction, a sector that generates more than 40 percent of the company's revenues.

But "sustainable growth is the only way to grow if we are to become much cleaner and eco-efficient. It is about having a competitive advantage," Veneman said.

The company has endorsed the Dow Jones Sustainability Index as a measurement of their eco-friendly improvements.

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Having ranked No 2 this year on the index, AkzoNobel has ruled that half of the long-term bonus and incentives of its 600 top managers will depend on how they meet their sustainable targets, through comparisons with 83 other coating companies on the Dow Jones Sustainability Index each year.

Ten years ago, the coating company considered sustainability development in the scope of risk management.

"Everywhere, we must have the same business principles - the vendor policy - with our suppliers and contractors to make sure there is no involvement of issues such as child labor and pollution," said Veneman. "We also have a code of conduct and health and safety standards adopted worldwide."

The company received 1,000 signatures from their vendors and visits its 230 most important suppliers every six months, a trip undertaken by one sourcing manager and one sustainability manager.

The company had more than 100 suppliers in China. Of them several suppliers failed to meet requirements in eco-efficiency and were dropped.

"The reason we want to have the most efficient production is not because we are nice ideologists," Veneman said. "We want to continue to make real progress at a time when the price of oil is soaring, coupled with the scarcity of fresh water."