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● Praxair Surface Technologies and GE Aviation launch joint venture company PG Technologies

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● Merck grants rights to tutoProm™ surface coatings to durXtreme 3

● AkzoNobel: Four companies join forces in long-term renewable energy commitment

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● Force majeure on polyurethane raw materials MDI and TDI remains in effect: Covestro expects no negative effects on business targets for 2016

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● Ferro further expands its colours solutions business 6

● Mankiewicz Coatings announces U.S. expansion 7

● GENERAL INDUSTRIAL COATINGS REPORTS FROM IRL 9

Axalta lays strategic foundation for Middle East expansion

Axalta Coating Systems, a leading global supplier of liquid and powder coatings,

has formally opened its regional office in Dubai’s Jebel Ali Free Zone

Authority (JAFZA). Designed to expand its regional sales and customer

service capability, Axalta’s investment responds to the region’s continued

growth that is outperforming other global markets in automotive industry

sales.

In addition to this strategic milestone in Axalta’s expansion in the Middle East and North

Africa (MENA), the industry leader in refinish coatings also plans to commission a flagship

regional Refinish Training Centre in Dubai by early 2017. The new facility will enable refinish

technicians to hone their skills and learn how to maximise their use of Axalta’s refinish

brands. Both the office and training centre help commemorate the company’s 150th

anniversary in the coatings industry.

“Our investment demonstrates our confidence in the region and our commitment to serve

our regional customers with industry-leading coating solutions

and services,” said Charlie Shaver,

Chairman and CEO of

Axalta, CONTENTS

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782 21 October 2016

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who formally opened the new Dubai office today. “Our strength in both transportation and

industrial coatings will enable us to support the growth of consumer spending on vehicles

and the rapid industrialisation being witnessed across the region.”

With the United Arab Emirates topping global growth rates for new car sales during the first

eight months of 2015, the wider Middle East car sales market is predicted to grow twice as

fast as markets in North America and Western Europe between 2012 and 2022 according to

Carmudi, a regional automotive publication.

Forecasts of annual light vehicle sales among the member states of the Gulf Cooperation

Council (GCC), the largest economic body in the Middle East, estimate a surge of 25 percent

to nearly 1.75 million new car sales due to strong economic growth, private sector activity,

low interest rates and government spending.

Added Shaver, “With our new facility, we will be more effective and efficient in building our

brand and enabling our customers to maximise the benefits of our products, especially our

industry leading waterborne coating systems. Our investment in the Middle East signals our

expectation for additional business opportunities in this growing region of the world.”

Axalta is an industry leader in the development of products which reduce the environmental

footprint from coatings. Waterborne coatings, other liquid coatings with low-to-zero volatile

organic compound (VOCs) emissions and powder coatings with no VOCs or targeted

hazardous air pollutants provide a number of options for customers. Axalta’s

AquaEC® electrocoat and Voltatex® Energy Solutions products are available in tin- and

formaldehyde-free formulations, respectively, while continuing to offer substrates strong

protection against corrosion.

“As more customers adopt waterborne systems, they will complete their jobs faster and

provide a better service to car users across the UAE and greater MENA region,” explained

Fadi Medlej, Managing Director of MENA for Axalta. “Our coatings and application systems

combine to offer environmentally responsible coating solutions which can help meet

sustainability goals across the region, an increasingly important pillar of regional

governments’ development policies.”

Source: Axalta, 13 October

Praxair

Surface

Technologies, Inc., a wholly owned

subsidiary of Praxair, Inc., and GE Aviation

have announced the formal creation of PG

Technologies, LLC, a joint venture. Praxair

Surface Technologies and its subsidiary

will hold the majority interest in the

Praxair/GE

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venture with GE Aviation and its

subsidiary holding the remainder.

PG Technologies will focus on

development, support and application of

specialised coatings tailored for GE

Aviation’s and CFM International’s current

and future engine models, including the

GE9X and LEAP engines. CFM

International is a 50/50 joint venture

company between GE and Safran Aircraft

Engines of France.

“The formation of PG Technologies builds

upon decades of collaboration between

Praxair Surface Technologies and GE

Aviation. This joint venture will take the

leadership role in the next generation of

coating technology applications and will

invest in new coating production capacity

to meet the needs of the burgeoning

aviation sector,” said PG Technologies

Board Member and Praxair Surface

Technologies President Pierre Lüthi.

“PG Technologies will play an important

role in GE Aviation’s engine manufacturing

system,” said Colleen Athans, Vice

President and General Manager of GE

Aviation’s Supply Chain. “With engine

production volume levels growing, GE’s

need for specialised coatings will also

increase, and this joint venture will ensure

we meet our commitments on the

performance and durability of our

engines.”

Coating operations for PG Technologies

will be based in Ellisville, Mississippi,

Indianapolis, Indiana, and the Republic of

Singapore. PG Technologies services will

also be supported by the global facility

network of Praxair Surface Technologies.

Source: Praxair, 17 October

Merck, a leading science and technology company, has

announced a cooperation agreement with durXtreme

GmbH of Ulm, Germany. Effective immediately, the coatings specialist will take over Merck’s

European business with polysilazane-based coating formulations marketed under the

tutoProm™ brand.

The tutoProm™ product range was added to the Merck portfolio through the acquisition of

AZ Electronic Materials and has been marketed by durXtreme since 2014. According to the

cooperation agreement, durXtreme is receiving an exclusive five-year licence covering

manufacturing, commercialisation and brand usage rights for the polysilazane-containing

Merck products tutoProm™ bright, tutoProm™ matt HD, CAG 37, and CL 1068 in Europe.

DurXtreme is an established formulation expert and specialist in customised polysilazane-

based high-performance coatings and their applications. “We are delighted to have found a

highly qualified partner for our customers and are certain that durXtreme will expand the

Merck

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business further,” said Michael Weiden, Head of Functional Materials within the

Performance Materials business sector of Merck. “Going forward, we at Merck will focus on

our core competencies in material production, and not on coating manufacturing.”

At the same time, the commercialisation of the polysilazane binder Durazane™ will be

transferred back to Merck. Durazane™ products are employed to produce high performance

coatings for surface protection and have also been marketed by durXtreme since 2014.

TutoProm™ is a transparent coating system that imparts an ultra-thin, glass-like finish and

lasting soiling protection to smooth, non-suction surfaces. It is applied in the interiors and

on the exteriors of public transport for graffiti protection and is also used to protect building

facades, ship hulls, classic cars, and artworks in public spaces from negative environmental

influences. TutoProm™ ideally complements the durXtreme portfolio, which offers a broad

range of products specifically developed for ultra-thin yet highly durable surface coatings in

industrial applications. According to the cooperation agreement covering tutoProm™,

durXtreme GmbH will also receive access to manufacturing know-how and take over the

existing customer base of Merck for polysilazane-containing finished formulations. Matthias

F. Koseck, Managing Director of DurXtreme, said, “With our knowledge and our practical

experience, we are in a position to continue to provide Merck customers with the best

service and support for all our products.”

Source: Merck, 17 October

A unique partnership

has been set up in

which four leading

companies, including

AkzoNobel, have

made a long-term agreement to jointly

source power from renewable energy

projects for part of their operations in the

Netherlands.

Formed two years ago together with DSM,

Google and Philips, the consortium’s first

agreement is to buy electricity from

Windpark Krammer, which was

established by two cooperatives together

with 4,000 members in the province of

Zeeland and the island of Goeree-

Overflakkee.

The four companies have agreed to

source a total of 350,000,000 kWh a year

once Windpark Krammer becomes

operational in 2019. This is equivalent to

the total annual consumption of 100,000

Dutch households.

It’s the first time that a group of

multinational companies in the

Netherlands has teamed up with local

citizens to create what is effectively a

consumer-to-business energy partnership.

“As a recognised leader in the field of

sustainability, the consortium offers

AkzoNobel

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AkzoNobel a welcome opportunity to

further increase its renewable energy use

and continue finding new ways to do

more with less,” said Knut Schwalenburg,

Director of AkzoNobel Nederland.

“We are proud to be part of the future of

energy sourcing and this partnership

shows that innovation does not stop at

product development. It also means

finding new ways of working together and

illustrates our commitment to becoming

more sustainable. In addition, by

supporting communities to create more

green energy, we are helping our cities to

become cleaner and more liveable.”

Added Tijmen Keesmaat, Managing

Director of Windpark Krammer: “This is a

great achievement. When we started

working on the concept eight years ago,

we did not foresee that we would be able

to provide sustainable power, not only to

our members, but also to multinational

companies.”

“It is particularly great that we deliver

directly to end users and that we cut out

the middleman. This collaboration is

energy transition on a completely new

level and we are proud that we can play

an important role in the new energy

landscape.”

The consortium will enable the four

companies involved to make a significant

contribution to delivering on the Dutch

renewable energy target of 14 percent by

2020, which was agreed in the Dutch

Energy Agreement for Sustainable Growth

in 2013.

Source: AkzoNobel, 14 October

Due to an unforeseen production outage at a supplier of nitric acid,

Covestro’s European production facilities for the isocyanates MDI and TDI

can currently only be operated at reduced capacity. Covestro therefore

declared force majeure on October 6, 2016.

Covestro is unable to fully compensate for the missing quantities of raw

materials through purchases from other manufacturers. Its raw material supplier currently

plans to restart its facility in the week of December 11, 2016. On the basis of this

information, Covestro is striving to gradually restore its production output to a normal level.

“We deeply regret this restriction and hope to be able to resume full deliveries of MDI, TDI

and by-products to our customers soon,” said CEO Patrick Thomas. “Despite the extent of

this issue, we in total do not expect a negative impact on our declared business targets for

2016.”

Covestro

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During the force majeure period, Covestro is keeping its customers and suppliers informed

about the situation and is helping them to find alternate solutions.

Source: Covestro, 14 October

Ferro

Corporation

has

announced entering into an agreement to

acquire Cappelle Pigments NV and the

acquisition of certain assets of Delta

Performance Products, for aggregate

consideration of approximately EUR55

million.

Sales for the two businesses in 2016 are

estimated to be approximately EUR69

million in the aggregate and adjusted

EBITDA in 2016 is expected to be

approximately EUR10 million. Based on

estimated 2016 adjusted EBITDA,

excluding expected synergies, the

purchase price of the two businesses

represents a combined transaction

multiple of approximately 5.6X.

On October 14, 2016, Ferro signed a

definitive agreement to acquire 100% of

the stock of Belgium-based Cappelle

Pigments for EUR50.5 million on a cash-

free and debt-free basis. The transaction

is expected to close by year end, subject

to customary closing conditions, including

regulatory review.

Cappelle is a 125-year-old, privately held

company that produces specialty, high-

performance inorganic and organic

pigments used in coatings, inks and

plastics and sells its products in more than

75 countries. Cappelle specialises in

weather-, heat-, and light-resistant

organic pigments. The company is also a

market leader in certain inorganic

pigments that complement Ferro’s market

leadership positions in Complex Inorganic

Coloured Pigments (“CICPs”) and

Ultramarine Blue pigments.

On August 1, 2016, Ferro purchased

certain assets of Delta Performance

Products. This business produces

customised colourant blends that utilise

Ferro’s CICPs for the concrete and

outdoor hardscape markets.

Peter Thomas, CEO of Ferro Corporation:

“These acquisitions are great additions to

our growing Pigments business. Both fit

extremely well into the strategy for our

colour solutions businesses, and we are

excited about the opportunities these

assets present to enhance shareholder

value. Over the next 12 to 24 months,

between the two businesses, we expect to

realise commercial and operating

synergies of EUR2.7 million to EUR3.6

million.”

“These acquisitions are much like the

Nubiola acquisition we made last year.

They both increase the breadth of options

we can offer our customers, increase our

technical capabilities and enhance our

Ferro

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market position. The transactions will

increase Ferro’s PPO business by

approximately 30% and expand our

addressable market for pigments by a

factor of four, to approximately EUR3.6

billion. The addition of Cappelle’s

proprietary pigments and capabilities will

advance our expansion into the specialty

organic pigment market and round out

our product portfolio. The Delta

transaction enhances our position as a

manufacturer of engineered colorants and

custom blends.”

Mr. Thomas concluded, “These businesses

demonstrate the value proposition of our

Pigments business. We create value for

our customers by combining and

manipulating pigments to produce

specialised colour solutions that provide

functional attributes for our customers’

end products, or improve the

effectiveness and efficiency of their supply

chain and manufacturing processes.”

Source: European Coatings, 20 October

Mankiewicz Coatings has announced the expansion of its

U.S. operations to a 10-acre parcel located in the

Charleston Regional Parkway in South Carolina. Only four years after the 2010 ribbon-

cutting ceremony at the company’s new facility in Charleston, the demand for products

outgrew Mankiewicz’s U.S. operational footprint, creating the need for a new site with more

capacity to serve the robust North American market.

In addition to an already existing administration building on the new Charleston Regional

Parkway property, three new buildings have been constructed for new production, logistics,

warehouse operations with a total of nearly 90,000 sq. ft. — four times the size of the prior

Charleston facility nearby on Jessen Lane.

The company, which manufactures high-technology coatings for various industries, including

wind power, has been serving North America locally in the U.S. for 18 years.

“After increasing local development and production and relocating to Charleston, SC in 2010

we were able to demonstrate to our customers the commitment to the U.S. market. The

proximity to the Charleston seaport and the ability to develop and produce locally has most

assuredly paid out,” says Fabian Grimm, Managing Director, Mankiewicz Coatings, LLC.

Mankiewicz’s U.S. business doubled revenue just three years after its relocation to

Charleston in 2010.

Within these new buildings, Mankiewicz will continue its mission of developing coating

concepts for the future with a cutting-edge research and development lab, a state-of-the-art

Mankiewicz

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paint production centre, a semi-automated logistical complex, as well as an application

center to train North American applicators on new technologies.

“It was an easy decision for the Mankiewicz group’s owner, Michael Grau, to approve a

multi-million dollar investment for our U.S. expansion,” continued Grimm. “The new facility

in Charleston will allow for increased local production volumes and faster response times for

our customers, as well as provide additional employment opportunities for the local

community. We are proud to continue to invest in our North American operations, and

excited about our next phases of development here as demand projections look very

favorable for our products.

Source: Wind Power Engineering, 13 October

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GENERAL INDUSTRIAL COATINGS

MARKET REPORTS & DATABASE

IRL is pleased to present an in-depth analysis of the top global markets for general industrial coatings for the first time.

IRL is offering a detailed and comprehensive guide to this interesting sector of the coatings industry. The reports provide, for each key country covered (21 countries in total), consumption estimates in both volume and value terms, with 2015 as the base year and forecasts to 2020.

In our two-tiered approach, top-level data is also available for the remaining countries covered in our global database (~100 countries).

IRL estimates global sales of general industrial paints and coatings to have reached almost 7.6 million metric tonnes in 2015, with sales expected to reach over 8.9 million metric tonnes by 2020.

The information in IRL’s reports is based on a comprehensive programme of telephone interviews with key players in each country market, backed up by thorough secondary research and IRL’s in-house database of global paints and coatings market data.

IRL has identified over 180 of the leading companies in the major global markets, providing market shares in volume terms for each country and market. The geographic coverage includes the following countries: Germany, United Kingdom, Spain, Italy, France, Poland, Russia, Saudi Arabia, UAE, South Africa, Turkey, China, Japan, South Korea, India, Indonesia, USA, Canada, Mexico, Brazil and Argentina.

In terms of value, global sales of general industrial coatings reached US$23 billion/€21 billion in

2015. Asia accounted for the largest share of the market value despite having a substantially lower

average price compared to Western economies. Europe followed Asia closely in terms of the

revenues generated, although with a substantially lower volume sold.

NEW FROM IRL

10

Solvent-based coatings still account for the majority of the sales, although they have been losing share in favour of power and water-based coatings. Powder technologies are particularly used in the “3C” segment (domestic appliances and consumer electronics) and in road marking (thermoplastic powders).

Most of the market value was generated by sales of general finish coatings, followed by coil & extrusion. Metal packaging and coil coatings had the highest average prices, whereas road marking coatings were the cheapest.

GENERAL INDUSTRIAL REPORT CONTENTS

Market Volumes in Metric Tonnes and Detailed Prices by Type of Resin & Application System (Country Trends 2011/2015 and Forecasts to 2020) for:

• Coil & Extrusion • Metal Packaging • 3C • General Finishes • Road Marking

Segmentation by type for:

11

• Resin (Pure Acrylic, Alkyds, Epoxy, Nitrocellulose, Polyesters, Polyurethane, Vinyl/Styrene/VAE, Others)

• Application System (Radiation-Cured, Powder, Water-Based, Solvent-Based) Market Shares: 2015 Sales Volumes in Metric Tonnes by Company.

The reports are available to purchase online at www.informationresearch.co.uk

For more information on this and our other reports, please contact Cathy Galbraith at:

cgalbraith@brggroup.com

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