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Editorial

AkzoNobel to Spin-off Specialty Chemicals Business, BASF Receives GM Supplier of the Year Award, Dow Provides Alternative to BPA-containing Can Coatings

SpecialChem / Mark Drukenbrod – Apr 27, 2017

Hello and welcome to your late week international coatings industry update, brought to you by SpecialChem. In industry news since last issue, AkzoNobel revealed its plan to split off its specialty chemicals operations and PPG responded with a statement of its own. Subsequent to this, PPG submitted another offer for the company. BASF received a 2016 GM Supplier of the Year Award and Dow won an Edison Award for its Canvera can coating. There’s much more where we continue and as always, you can go to the above items now using the links, or checkout our latest stories, which we’ll get to right away…

AkzoNobel to Separate Specialty Chemicals Business


AkzoNobel has outlined a new strategy to accelerate growth and value creation with two focused, high-performing businesses – Paints and Coatings and Specialty Chemicals – which will lead to a step change in value creation for shareholders and all stakeholders. The logical next phase of creating two separate companies builds on the strong financial and operational foundation developed in recent years. It will generate superior, faster and more certain value creation than the alternatives and with substantially fewer risks, uncertainties and social costs. Ton Büchner, CEO of AkzoNobel, said: “Our commitment to substantial shareholder returns reinforces our belief that the plan we are outlining today will create a step change in value creation, generating significant shareholder value in the short, medium and long term. It will be delivered at pace, with a clear timeline and is in the best interest of all stakeholders.

BASF Receives 2016 General Motors Supplier of the Year Award


BASF was named a 2016 General Motors (GM) Supplier of the Year for the twelfth time since 2002. The award winners were chosen by a global team of GM purchasing, engineering, quality, manufacturing, and logistics executives. Winners were selected based on performance criteria in product purchasing, indirect purchasing, logistics, customer care and aftersales. With its broad array of color solutions and modern paint processes, BASF’s Coatings division helps GM improve productivity and environmental performance. “We are focused on building positive supplier relationships, bringing new, customer-centric innovations to GM and being the OEM of choice among suppliers,” said Steve Kiefer, GM vice president, Global Purchasing and Supply Chain. “The companies we recognize not only have brought innovation, they delivered it with the quality our customers deserve.”

Dow Provides Sustainable Alternative to BPA-containing Can Coatings


A next generation, award-winning technology from Dow Coating Materials can drive a revolution in can coatings, by facilitating health-conscious food and drink producers to turn away from epoxy coatings using bisphenol A (BPA) and other materials of concern. While cans offer great consumer convenience, coatings are needed to protect containers from corrosion, and the contents from contact with metal, helping preservation, flavor quality and consumer safety. Yet with traditional epoxy coatings using BPA – a material that has raised health concerns – alternatives are in demand from progressive brand owners wanting to address evolving consumer demands. Now, technological developments at Dow have facilitated a tried and tested option for flexible and rigid plastic food packaging to be applied to can coatings too: thermoplastic polyolefins, with a specially designed mix of functionalized and non-functionalized polyethylene or polypropylene in an aqueous dispersion.

On Your Coatings Radar – PPG Makes a “Final” Offer for AkzoNobel


PPG Industries raised its proposed offer for AkzoNobel by about 8 percent to 26.9 billion euros ($28.8 billion) on Monday. PPG said its proposal was a "final" invitation to Akzo to enter negotiations and included a break fee in case the deal was rejected by regulators - attempting to address a concern that Akzo raised when it rejected two previous proposals from PPG.

"I think it's important for them (AkzoNobel) to do the due diligence and to sit down and listen to us," PPG CEO Michael McGarry said in an interview. "They have run out of excuses to throw on the table to say why they shouldn't." He also said that PPG believed the deal would add to its earnings from the first year and given the support from Akzo shareholders, the U.S. firm would submit a formal offer to the Dutch financial markets regulator by June 1, regardless of what Akzo does.

Akzo said “In accordance with its fiduciary duties and acting under the Dutch governance code the Board of Management and Supervisory Board of AkzoNobel will carefully review and consider this proposal.”, noting it was required by law to study the bid.

It is important to note that AkzoNobel did not reject the bid out of hand, and also that PPG had made significant changes in the bid along with sweetening the price, including the proposal of a break fee and changes also in the area of employment, pension plans, research and development spending and the location of production facilities.

Tnemec Expands R&D Facility and Upgrades Capabilities


Tnemec Company Inc., a leading manufacturer of protective coatings and linings, opened the doors of its new research and development facility on March 30, 2017. This expansion of the company’s current manufacturing plant in North Kansas City, Missouri, includes an upgrade that doubles the size of its previous R&D laboratory and office space while making notable improvements to its testing and ventilation equipment.

“Tnemec Company has always been dedicated to researching and developing innovative technologies to protect our customers in corrosive environments,” explained Remi Briand, Vice President – R&D for Tnemec. “This expansion and renovation represents the next phase of this commitment.”

Among the upgrades, a new chemical immersion room allows Tnemec’s R&D team to conduct more expansive performance testing, including in-house autoclave tests and severe wastewater analysis testing (S.W.A.T.). Several updated fume hoods were also installed to handle tougher testing protocols.

Other improvements include a controlled spray booth for panel preparation, new contact angle devices for nanochemistry, an updated chamber capable of handling temperatures ranging from -94°F (-70°C) to 356°F (180°C) and a new state-of-the-art ventilation system to ensure safety for all personnel and the surrounding environment. The building also received high-performance Tnemec coatings systems on the walls and floors.

“The scope of this project also included updating our shipping and traffic offices and renovating the building’s break room,” noted Briand. “This expansion improves our capabilities and the working conditions for our current employees, while also adding additional room for added personnel in the future.”

The new R&D facility further helps Tnemec Company stay focused on delivering high-performance coatings to customers in the ever-changing coatings industry, according to Briand. This expansion comes after several other changes in the company, including the introduction of Chase Bean as President, various product introductions and an effort to increase the domestic sales force.

"We look forward to the future of research and development for Tnemec and the positive effect it will have on our clients,” added Briand.

AkzoNobel Announces Finalists for Imagine Chemistry Start-up Challenge


AkzoNobel recently announced the 20 finalists for its Imagine Chemistry initiative, which was launched earlier this year to help solve real-life chemistry-related challenges and to uncover sustainable opportunities for the company’s Specialty Chemicals business.

“We’ve received so many great ideas from all across the globe for novel chemistries and business concepts, ranging from new sources of bio-based products to potential breakthrough ideas for the circular economy,” said Peter Nieuwenhuizen, Global R&D Director for AkzoNobel Specialty Chemicals.

“It has been a challenge making a selection but we believe these final 20 all hold great potential to address customer needs and contribute to a safer, more sustainable world. This shows that there is tremendous innovation potential, even in seemingly mature chemistries. We look forward to working with the eventual winners to turn their ideas into a commercial reality with real global impact.”

The finalists for the five Imagine Chemistry and two “open challenge” categories are:

Revolutionizing plastics recycling: Adriana Pineda, Cadel Deinking Spain, Emile Clement, FiliGrade B.V The Netherlands , Jack Buffington, University of Denver USA

Waste water-free chemical sites: Steve Furlong, Drystill Canada, Steven De Laet, InOpSys Belgium, Guido Mul, University of Twente – Enschede, The Netherlands

Cellulose-based alternatives to synthetics: Lindy Hensen, PeelPioneers The Netherlands , Gertjan de Jong, MISCQ The Netherlands, Andrew Mwangi , Aquabax Enterprises Kenya, Charles Sanderson, Renmatix USA

Bio-based and biodegradable surfactants and thickeners: Dan Derr , Logos Technologies USA, Jeremy Minty, Ecovia Renewables Inc. USA, Ben Dolman, The University of Manchester UK

Bio-based sources of ethylene and ethylene oxides: Derek Greenfield, Industrial Microbes USA, William Mackintosh, RISE Sweden

Highly Reactive Chemistry and Technology: Mark Mascal, University of California Davis USA

Sustainable alternatives to our current technologies: Sasa Marinic, ANTECY The Netherlands, Brian Miller, uFraction8 UK, Mark Randall, T2 Energy USA , Christoph Winkle, University of Graz Austria

The finalists will now participate in a three-day event starting June 1 at AkzoNobel’s research facility in Deventer, the Netherlands, where they will be supported by RD&I and business development experts to further develop their business ideas and concepts.

The challenge, organized in partnership with KPMG, is the latest in a series of efforts by AkzoNobel to focus on open innovation and startup firms. The company recently announced cooperation with start-up organizations Lux Research and Start-up Delta focused on developing new business opportunities stemming from the challenge.

PPG Submits Revised Offer to AkzoNobel


On April 24, 2017, PPG announced that it submitted a revised proposal on April 24, 2017, for a combination with Akzo Nobel N.V. The comprehensive proposal letter, which was provided to Messrs. Antony Burgmans, Chairman of the Supervisory Board and Ton Büchner, Chief Executive Officer and Chairman of the Board of Management, detailed PPG’s increased price of Eur 96.75 (cum dividend) per outstanding ordinary share of AkzoNobel, comprised of cash of Eur 61.50 and 0.357 shares of PPG common stock. Including the assumption of net debt and minority interests, the proposed transaction is now valued at approximately Eur 26.9 billion, or $28.8 billion.

In the letter, PPG Chairman and Chief Executive Officer Michael McGarry said, “We are extending this one last invitation to you and the AkzoNobel boards to reconsider your stance and to engage with us on creating extraordinary value and benefits for all of AkzoNobel’s stakeholders.

“Our revised proposal represents a second increase in price along with significant and highly-specific commitments that we are confident AkzoNobel’s stakeholders will find compelling. We stand ready to work with you expeditiously to complete a targeted due diligence review and to negotiate a definitive agreement for the combination.”

AkzoNobel Strongly Supports Chairman in Response to EGM Request


AkzoNobel issued this statement in response to a collection of major stockholders’ requests for an extraordinary general meeting for the purpose of dismissing Akzo chairman, Antony Burgmans. The statement is reproduced below:

AkzoNobel strongly respects and greatly values its shareholders and regularly engages in an open and direct dialog with them to better understand and consider their perspectives.

Within the last week alone, the management of AkzoNobel has held face-to-face meetings with shareholders at an Investor Day followed by an extensive international shareholder roadshow and today’s Annual General Meeting (AGM). This dialog will continue to be intensive and the valued insights of AkzoNobel shareholders will be carefully considered by the Board of Management and the Supervisory Board.

AkzoNobel fully supports the rights that shareholders have under Dutch law. One of these rights is for shareholders representing at least 10% of issued share capital to request a general meeting as qualified by Dutch law. According to Dutch law, this includes meeting standards of reasonableness and fairness and a ‘legitimate interest’ test.

In its statement of April 12, 2017, AkzoNobel confirmed receipt of a request from certain shareholders, led by Elliott Advisors, to hold an EGM with the sole agenda item of dismissing Mr. Antony Burgmans as Chairman of the Supervisory Board. The Supervisory Board subsequently conducted a thorough review in response to this request and has taken detailed legal advice.

The Supervisory Board has concluded that the request from Elliott Advisers to dismiss the Chairman does not meet the standards required under Dutch law. The request is irresponsible, disproportionate, damaging and not in the best interests of the Company. Given the sole agenda item, there is no legal basis for calling an EGM.

Byron Grote, Deputy Chairman of the Supervisory Board said: “Following a thorough review and careful considering of this request the Supervisory Board reiterates its unanimous support for Mr. Burgmans in his role as Chairman. His unique experience in international business and global transactions is crucial to the Company. He has played an important role in overseeing and supporting management in the transformation of the Company in recent years, contributing to its significantly improved performance. It is essential that the steady and experienced hand of the Supervisory Board and its Chairman remains focused on the task of steering the company at this crucial time.”

LANXESS Completes Acquisition of Chemtura


Specialty chemicals company LANXESS has successfully completed the acquisition of U.S. company Chemtura, one of the world’s leading suppliers of flame retardant and lubricant additives, earlier than originally expected effective April 21, 2017. All required regulatory authorities have cleared the transaction. Already in February 2017, Chemtura’s shareholders voted to approve the acquisition. With a total enterprise value of EUR 2.4 billion, Chemtura is the largest acquisition in the history of LANXESS.

The acquisition significantly expands the company’s additives portfolio and makes LANXESS one of the world’s leading players in this growth field, which is one of the most attractive in the specialty chemicals industry. In addition to additives, Chemtura’s urethanes and organometallics businesses will be integrated into the LANXESS portfolio. The Cologne-based specialty chemicals company will absorb some 2,500 Chemtura employees at 20 sites in 11 countries worldwide. The former Chemtura businesses generate annual sales of approximately EUR 1.5 billion.

“The acquisition of Chemtura is another major step in our realignment process and a significant milestone in our course of growth. The ‘new’ LANXESS is increasingly taking shape. The expansion of the additives business gives LANXESS an additional strong pillar. In its new set-up and with an even more balanced portfolio, the company will be much more stable and profitable. At the same time, Chemtura considerably strengthens our presence in the North American growth region,” said Matthias Zachert, Chairman of the Board of Management of LANXESS AG. “We will now focus our energy on rapidly and smoothly integrating the new businesses and employees, as well as on optimally serving our new and existing customers.”

Through the acquisition LANXESS increased its footprint in North America. In this region, the company is now represented at 24 production sites (previously 12) and employs approximately 2,800 staff (previously 1,500). The region’s share in global sales increases from approximately 17 percent to approximately 21 percent.

The expected annual synergy effects from the transaction amount to approximately EUR 100 million with realization targeted until 2020. The acquisition of Chemtura is already expected to be accretive to LANXESS’s earnings per share in the first full fiscal year after closing. LANXESS financed the acquisition through two corporate bonds and a hybrid bond as well as cash. The bonds were successfully placed at attractive terms already in 2016.

Effective immediately, LANXESS will combine its entire additives business within the new Specialty Additives segment. This segment is an additional pillar in the LANXESS group, with annual sales of approximately EUR 2 billion and some 2,900 employees worldwide. The segment comprises the new Additives and Rhein Chemie business units. The combined business with flame retardant and lubricant additives is anchored in the Additives business unit, which is headed up by Anno Borkowsky. The Rhein Chemie business unit, headed up by Philipp Junge, comprises the existing rubber and color additives businesses of LANXESS.

LANXESS is also significantly expanding its market position for flame retardant additives and now also operates the former Chemtura businesses with brominated flame retardant additives, bromine and bromine derivatives. Due to their high effectiveness, these substances are used among others in the construction industry and are an ideal complement for the existing LANXESS business with phosphorus-based flame retardant additives. “Flame retardance requirements are continuously rising due particularly to the trend toward energy-efficient construction. This acquisition will also make us one of the world’s leading suppliers of flame retardant additives. As of today, we can offer our customers an array of complementary brominated and phosphorus-based products from a single source,” said Borkowsky. LANXESS also expects medium-term annual growth rates of 3 to 4 percent for the area of flame retardant additives.

Registration Now Open for the 60th Polyurethanes Technical Conference


Registration is now open for the 60th Polyurethanes Technical Conference, which will be held Oct. 2 through 4 at the New Orleans Marriott. Hosted by the Center for the Polyurethanes Industry (CPI) of the American Chemistry Council (ACC), this prestigious conference brings together industry leaders and experts to discuss and learn about the latest innovations and creative applications for polyurethane.

“Over six decades, the Polyurethanes Technical Conference built a reputation as the must-attend event for all those who make, use or study polyurethanes around the globe,” said Lee Salamone, senior director of CPI. “Our event offers industry experts a place to network with more than 1,000 of their peers and discuss the future landscape of the polyurethane and plastics industry.”

“For 60 years, this conference has shaped the polyurethane industry,” said Melissa Rose, polyurethanes technical service and development director at Dow and CPI’s 2017 conference chair. “Every year, we craft an innovative program that allows our attendees to discover what’s new in our industry. This year’s lineup offers an exciting and unique opportunity to gather in-depth industry knowledge, learn about the latest applications for polyurethanes and hear from senior-level regulators.”

During the 2017 Polyurethanes Technical Conference, thought-provoking technical sessions will cover the latest innovations, advancements and applications for polyurethanes, and subjects ranging from automotive manufacturing, construction, coatings, adhesives, product sustainability, and sealants and elastomers (CASE). The 2017 Technical Conference will offer its Professional Development Program, which is taught by current industry experts, to help train current and future leaders in chemistry, application, testing and safety-related topics.

Heubach Increases Colorant Production Capacity


Heubach has expanded the colorant production capacity by a cutting-edge production technology which uses a standard set of specially designed base colorants to yield individual colorants which can be mixed according to the customer’s requirements.

The new colorant technology concept covers the complete color space and allows for the accurate adjustment of the physical parameters. It can be enlarged by adding colorants which will ensure that the future needs and requirements of the market are met.

Heubach has at the same time expanded its universal tinting system range of water based pigment preparations by four new tinting lines marketed under the trade name "Heucotint UN 41”, "42”, "43” and "44” series. The formulation technology has been further improved, resulting in a product family which allows the tinting of water- and solvent-based products including silica plasters. It is also compliant with the current regulatory requirements and environmental labels at the same time. All of these colorant tinting systems are specifically designed for point-of-sale tinting (POS) as well as for in-plant applications (IPT).

PATCHAM USA Opens Facility


PATCHAM USA, a subsidiary of PATCHAM FZC, has opened an application development and customer service center in Fairfield, New Jersey, USA. The expanded facility provides PATCHAM flexibility to support the Industry segment with value added services, the company stated.

“As always, our well experienced Team at PATCHAM Application development center will be ready to extend all Technical support that may be required to the chemist & formulators of paint and coatings industry,” said Chetan Desai, senior VP – Americas.

EuroNano Forum 2017 to be hosted in Malta


Malta will host the eighth edition of the EuroNano Forum - Europe's largest Nanotechnology conference between 21 and 23 June under the auspices of the Maltese Presidency of the Council of the European Union at the Mediterranean Conference Centre in Valletta.

EuroNano Forum 2017 is organized by Malta Enterprise, the Malta Council for Science and Technology, the University of Malta and Spinverse from Finland in cooperation with the European Union's Directorate-General for Research and Innovation and has received funding from the European Union's Horizon 2020 research and innovation program.

The forum will focus on European technology development in nanotechnologies and advanced materials industries, discussing the latest progress in nanoscience and nanotechnologies and their contribution to innovation in manufacturing across all industrial sectors. The applications of nanotechnology in low carbon green energy, electronics, healthcare, consumer goods, transportation, construction industry, machinery and process tools, electromechanical and fluidic systems and printing will all be looked into. Framework conditions such as standardization, regulations, IPR and safety issues as well as entrepreneurship and industrial policy will also be discussed.

ENF2017 will feature sessions on finance and funding through European and national programs, in particular Horizon 2020. The program includes three plenaries, 15 sessions, 50 exhibitors and more than 70 high-level speakers from industry, government and research all offering multiple occasions for industry leaders, researchers and students to get involved.

The EuroNano Forum will offer the opportunity to companies and researchers willing to exploit the latest developments in nanotechnology as well as to share their visions for industry and research.
Nanotech Europe, an exhibition organized by Spinverse, will showcase the latest achievements in projects while conference delegates have the opportunity to participate in several workshops and a brokerage event. In addition, the Best Poster and Best Project awards will put young talents and promising new solutions in the spotlight.

Registrations are open until 20 June.

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