1

● DSM to sell Euroresins to Cathay Investments

2

● ALTANA expands its business in Brazil through acquisitions 3

● Mitsui Chemicals and SKC to consolidate polyurethane material businesses 3

● Emery marks pre-commissioning of world’s first renewable and recyclable polyol plant

5

● Graco announces four acquisitions to drive long-term growth 6

● Michelman takes steps to better anticipate and serve customers’ needs 6

● A PROFILE OF THE MEXICAN PAINT INDUSTRY 2014 8

Allnex acquires Águia Química, one of Brazil’s largest

manufacturers of resins

Allnex has confirmed the acquisition of Águia Química, one of the largest

manufacturers of alkyd and acrylic resins in Brazil. The addition of Águia

Química’s employees together with further investments at the Ponta

Grossa site further expands the products and technologies offered to

customers of both companies in the region.

Founded in 1989, Águia Química is a Brazilian market leader in alkyd and acrylic resins for

the production of paints, composites, adhesives and abrasives and in the distribution of

solvents.

Commenting on the news, Frank Aranzana, CEO of Allnex said, “The acquisition of Águia

Química, which is well established in the region, will enable us to complement our existing

Liquid Resins and Additives and Crosslinkers businesses, and produce our products closer to

our customers. We firmly believe that this acquisition will enable us to better serve our

customers, not only in Brazil, but region wide.”

CUBE

691 9 January 2015

www.informationresearch.co.uk

cube@brggroup.com +44 (0) 208 832 7830

CONTENTS

2

Águia Química employees will continue to focus on delivering their wide range of products

and technologies, operating under the name “Allnex Brazil”.

Águia Química’s President (CEO) Mauricio Scheffer stated, “This is a positive move for Águia

Química, with employees becoming part of a global firm, enabling the facility to extend our

products and knowhow to even more customers, locally and throughout the region.

Together, Allnex and Águia Química can become the leaders in the Latin American market.”

Allnex is committed to further investment at the Ponta Grossa site to create a

manufacturing platform which will meet evolving market needs, while Águia Química’s

award-winning dedication to quality will continue to be a priority for the future.

Source: Allnex, 6 January

Royal DSM, the global Life Sciences and

Materials Sciences company, has

announced that it has reached agreement

with Cathay Investments for the sale of

Euroresins. Subject to customary

approvals and notifications, the

transaction is expected to close in Q1

2015. Financial details will not be

disclosed at this time.

Euroresins is a distributor of products to

the composite resins industry with

activities in nine countries in Europe,

including the United Kingdom, Italy and

France. Euroresins realises sales of

approximately €90 million with around 70

employees. All employees will on the

closing date transfer to the new owner.

The sale of Euroresins is in line with the

strategic actions DSM is pursuing for

Composite Resins, as announced in

November 2014.

Cathay Investments is the UK holding

company for a group of companies

engaged in chemical distribution and

trading. Cathay’s principal trading

business is Cathay Composites, which

distributes glass fibre, resins and other

composite materials throughout the UK

and Scandinavia. Since its establishment

Cathay has grown its portfolio to six

companies.

Source: DSM, 23 December

DSM

3

The speciality chemicals Group ALTANA has acquired two companies

in Brazil. As a result, the ACTEGA division now has its own sites in

South America's largest country. Both of the acquired companies are

owner-operated and headquartered in the federal state of São Paulo.

Premiata, which operates two facilities under the name of Premiata Tintas and Premiata

Especialidades Químicas, specialises, respectively, in printing inks and coatings for the

packaging industry with140 employees. Overlake is an overprint varnishes specialist with 70

employees at one site. “Through these acquisitions we are systematically expanding our

business in the growing Brazilian market,” explains Martin Babilas, Member of the

Management Board of ALTANA AG. “As both companies focus entirely on speciality

chemicals and tailored customer solutions they are a perfect match for ALTANA.”

The ACTEGA division's entire Brazilian operations will be concentrated in the new ACTEGA

do Brasil company with immediate effect. "Taking over Premiata and Overlake means we

can significantly expand our portfolio of solutions particularly for the Brazilian packaging

industry," summarises Dr. Roland Peter, ACTEGA Division President. “I'm convinced that our

many years of expertise in printing inks and overprint varnishes combined with our new

production facilities will swiftly make ACTEGA the preferred supplier in Brazil.”

In addition to the newly acquired facilities, ALTANA already has a production and research

site in Brazil run by its ELANTAS division that develops and distributes insulating materials

for the electrical and electronics industry.

Source: ALTANA, 22 December

Mitsui Chemicals, Inc.

and SKC Co., Ltd. have

announced the signing

of a joint venture

agreement to consolidate the

polyurethane material businesses of both

companies.

MCI and SKC target to form the new joint

venture company (JVC) by April 1, 2015

subject to completion of necessary

procedures, such as the obtaining of

relevant approvals and licences.

The JVC is headed to be a global

comprehensive manufacturer of

polyurethane materials which provides

value for customers and targets sales of

US$2.0 billion per year around 2020.

Basic strategies of the JVC are as follows:

ALTANA

Mitsui/SKC

4

1. Satisfy customer needs in growing

markets

The JVC will fully utilise the global

networks of MCI and SKC covering

Far East Asia, China, ASEAN,

Europe, and the Americas based

on close relationships with

customers and the provision of

quick and efficient technical

services.

2. Explore new businesses globally

The JVC will develop new

applications and customers

through consolidation of products

and technologies of MCI and SKC.

3. Improve profitability

The JVC will secure global top cost

competitiveness by optimising

resources/maximising efficiency

and taking advantage of parent

company raw materials.

The JVC intends to maximise the synergy

effects by integrating system product

businesses. The knowledge and

information accumulated by MCI and SKC

over the years will be shared and utilised

by the JVC to provide total solutions to

customers.

Outline of Joint Venture Company

Company name: To be determined

Location of head office: Republic of Korea

Commencement of operations: April 1st,

2015

Shareholding Ratio: MCI 50％, SKC 50％

Business: Development, manufacturing,

and sales of polyurethane materials.

Revenue: Approximately US$1,500 million

in 2015.

Products: TDI, MDI, Polyols, System

products.

Source: Mitsui, 22 December

5

Emery Oleochemicals, a world leader in natural-based chemicals, has

announced that construction activities of its new technologically

advanced bio-polyol plant located in Cincinnati, Ohio have reached

mechanical completion. The plant will further strengthen Emery Oleochemicals’ ability to

provide a wide range of eco-friendly polyol products and customer service.

With the initiation of pre-commissioning activities and site operational verification, startup

of the first phase of the US$50 million investment marks a key milestone in the expansion

project designed to boost capacity and technical capabilities in the manufacturing of

performance bio-based polyols for the automotive, furniture and bedding and major

appliances industries.

Announced in 2012, the project will reach initial production goals by the end of the year

specifically in the area of renewable-based polyols, using Emery Oleochemicals’ proprietary

ozonolysis technology.

“Once the commercial operation of the first phase begins, the bio-polyol plant will

demonstrate unique capabilities of renewable-based polyols that can deliver on both

performance and cost,” said Jay Taylor, Senior Vice President, Chief Manufacturing Officer

and Regional Managing Director, North America.

The second phase adjoins in this same manufacturing complex and is in its final building

stage with civil and structural installation at various process units nearing completion. This

state-of-the-art site is dedicated to the production of recyclable polyols, bringing to life

Emery Oleochemicals’ “closed-loop” processing value proposition and marks the successful

integration of award-winning INFIGREEN® technology acquired in 2012.

“Supported by over 100 workers and external consultants, we have done an excellent job in

constructing what will be the world’s first commercial plant offering both renewable and

recyclable polyols for polyurethanes. Surpassing over 1.6 million man hours without a lost

time accident, the facility already allows potential customers to explore opportunities in

which our products can be economically integrated into their product development goals as

we also embark on pre-marketing activities,” added Taylor.

When full facility commissioning completes in Q2 2015, the Cinccinati site will additionally

produce solutions for Emery Oleochemicals’ Agro Green, Bio-Lubricants and Green Polymer

Additives businesses, therefore providing natural-based solutions in market segments such

as agriculture, lubricants, oilfield, packaging, toys and other high-growth industries.

Source: Emery, 30 December

Emery Oleochemicals

6

Graco Inc.

has

announced that it has agreed to acquire

the stock of Pennsylvania-based High

Pressure Equipment (HiP) company for

$160 million. The acquisition of HiP is

subject to customary regulatory review

and Graco expects to complete the

transaction in the first quarter of 2015. In

addition, Graco announced that it has

agreed to acquire the Utah-based White

Knight Fluid Handling business. The

Company expects this acquisition to close

in early January. Graco also closed on two

other acquisitions in December 2014. The

Company acquired the assets of Ontario,

Canada-based GeoBlaster Equipment

Sales & Services Inc., and Brazil-based

Multimaq-Pistolas e Equipamentos Para

Pintura Ltda (Multimaq). Aggregate sales

and EBITDA of the four businesses in the

most recent twelve month period were

approximately $50 million and $17

million, respectively.

“The acquisitions we are announcing

today support our strategic growth plans

to expand into new markets and

geographies, while diversifying our

portfolio of precision products for critical

applications,” said Patrick J. McHale,

Graco’s President and CEO.

The combined cash purchase price to

acquire the four businesses is

approximately $185 million, with

additional consideration to the former

owners of White Knight Fluid Handling

should the business achieve certain

growth targets. The acquisition of HiP

includes a favourable tax election that is

expected to save Graco approximately

$1.5 million per year in cash taxes through

2029.

When combined with the acquisition of

Alco Valves, which Graco completed early

in the fourth quarter of 2014, but before

transaction costs and charges related to

inventory step-up, these acquisitions are

currently expected to provide

approximately 13 to 15 cents of accretion

to the company’s earnings per share in

2015.

Source: Graco, 2 January

Michelman, a global manufacturer of surface additives and

polymers, has introduced an improved organisational

structure consisting of three Strategic Business Groups. The new structure will help

Michelman better anticipate and serve its customers’ needs by driving collaboration

between its experienced industry focused business teams - now fully integrated into the

Strategic Business Groups - that serve customers in the flexible packaging, paint & coatings,

fibres & composites, engineered wood, paper & corrugated, digital printing and other

Michelman

Graco

7

industries. The resulting open flow of ideas, solutions, and application expertise will allow

faster introduction of new technologies and applications and reduce customers’ concept-to-

commercialisation time.

The three groups are Coatings, serving coating formulators with advanced polymers and

additives; Industrial Manufacturing, whose expert teams work hand-in-hand with discrete

product manufacturers to improve productivity and end-use performance; and Printing &

Packaging, helping move the industry forward with innovative solutions in print receptive,

functional and barrier coating technologies.

Michelman has appointed the following people, all with extensive global experience, to lead

the new groups. Dr. Gautham Parthasarathy has been hired as Group Director,

Coatings. Gautham comes to Michelman from Emerald Performance Materials, where he

was VP and General Manager of the K-Flex speciality plasticisers business. He has held

leadership roles with responsibilities for strategic development, marketing, business

development, M&A, R&D, and operations. Mr. Michael Annis has been hired as Group

Director, Industrial Manufacturing. Mike was most recently with Celanese Engineered

Materials, where he held the position of Global OEM Manager and North America Business

Development Manager in the Electronics Business Unit. He has previous experience in R&D,

operations, sales, marketing and quality functions. Dr. Rick Michelman, Michelman’s Chief

Technology Officer, has assumed the role of Group Director, Printing & Packaging on an

interim basis.

All three strategic groups are supported regionally around the world by enhanced

management teams led by Mr. Jean-Marc Verhaeghe, VP/Managing Director, EMEA, Mr.

Steven Wong, VP/Managing Director, Asia-Pacific, and Mr. Marty Riehemann who will

assume the new role of VP/Managing Director, Americas in addition to his corporate role as

Chief Commercial Officer.

According to Mr. Steve Shifman, President and CEO at Michelman, “As always,

organisational and management decisions at Michelman are made first and foremost to

ensure all of our customers are provided the very best environmentally friendly products,

service and support. These steps will allow us to improve the customer experience, and

provide a platform for continued strategic growth.”

Source: Michelman, 6 January

8

A PROFILE OF THE MEXICAN PAINT INDUSTRY

IRL is pleased to announce the launch of a new edition of its single country report A Profile of the Mexican Paint Industry. In this study, IRL examines Mexico’s paints and coatings market independently and not as part of a regional study on the Central American paint market, thereby enabling us to present more in-depth information on paint market influences and trends. This fully updated second edition provides market data for 2013 and forecasts for 2018.

The total consumption of paints and coatings in Mexico reached 870,000 tonnes in 2013, and is forecast to rise to more than 998,000 tonnes by 2018. This is equivalent to an average annual growth rate of 2.9%, which is somewhat lower than past projections.

The Mexican paints and coatings industry continues to perform strongly despite having encountered some hindrances, such as the deceleration of the economy and a slowdown in construction activity. With a total population of 120 million and rising purchasing power, Mexico attracts many foreign investors who then decide to settle and capitalise on the economy. It has attracted many multinational paint companies.

Together with Brazil, the Mexican paints and coatings industry is a key player in the Latin American region. The two major drivers for Mexico’s paints and coatings market are construction output and growth in local manufacturing businesses. The architectural market remains the largest of the coatings segments in Mexico, corresponding to almost 70% of the country’s total demand. Despite the abnormally poor performance of the construction sector, there is a renowned housing deficit in Mexico which is expected to encourage new build construction and drive the demand for architectural coatings.

NEW FROM IRL

All data in this report plus additional historical trends and forecasts are now available

in our unique online database that clients can subscribe to.

Please contact IRL for more details.

9

The overall prospects for the industrial coatings sector are also promising. General industrial, protective, automotive and marine coatings are all set to benefit from the government’s recently introduced energy reform. There is much speculation that the liberalisation of the energy sector will attract large investments and reduce the costs of industrial energy. Furthermore, Mexico’s automotive production is booming, generating demand for both plastic and automotive coatings.

Both the government and Mexico’s Paint and Printing Ink National Manufacturers’ Association, ANAFAPYT, are attempting to encourage the use of environmentally-friendly coatings. Today, most architectural coatings used in Mexico are water-based; however, on the contrary, solvent-based coatings dominate in the industrial sector. Furthermore, the consumption of powder coatings, which inherently release no VOCs into the atmosphere, is growing swiftly. A key constraint to the development of new coatings technologies is the absence of strict environmental legislation in the country.

69%

31%

Consumption of Architectural Coatings vs. Industrial Coatings in Mexico

Architectural Coatings Industrial Coatings

56.1%

40.9%

2.6% 0.4%

Total Mexican Paint Market Split by Technology

Water-Based

Solvent-Based

Powder Coatings

Radcure

Total Market: 870,000 tonnes

Total Market: 870,000 tonnes

10

A Profile of the Mexican Paint Industry gives an insight into the market changes in the past few years, as well as outlining the key trends affecting nine mainstream paints and coatings segments: architectural/decorative, industrial wood coatings, protective coatings, marine coatings, automotive OEM coatings, automotive refinishes, powder coatings, general industrial coatings and plastic coatings. Forecasts on these are presented for the year 2018 alongside market data for 2013. The cost of the full report is €3,250.

The full report is available to purchase online at our website:

www.informationresearch.co.uk

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

Coating Update by Email (CUBE) is a free weekly news digest of the latest business news and events in the global paints and coatings industry, and is published in-house by specialist coatings research company IRL.

Subscriptions: If you or your colleagues would like to subscribe to CUBE, please send an email along with your name, position and company to cube@brggroup.com with ‘SUBSCRIBE’ written in the subject field. Please add news@brggroup-chems.com to your safe senders list. If you no longer wish to receive CUBE, please send a blank email to cube@brggroup.com with ‘UNSUBSCRIBE’ written in the subject field.

Enquiries: For enquiries or feedback to the Editor of CUBE (Mrs. Katie Tofts), please send an email to cube@brggroup.com. Please also send your press releases to this address. For enquiries regarding other services that IRL can provide please email irl@brggroup.com detailing your request.

CUBE © IRL 2015