Amsterdam, the Netherlands -- AkzoNobel said 8 Sept that it is to boost its presence in the Chinese automotive market after agreeing to acquire Changzhou Prime Automotive Paint Co. Ltd.
No financial details were disclosed.
AkzoNobel said Prime is one of China's largest vehicle refinish suppliers and a leader in the fast-growing mid-market segment. This sector is estimated to double in size within the next five years. Prime is based in Jiangsu Province, and develops, manufactures, markets and distributes automotive coatings, primarily for the refinish market.
The agreement follows AkzoNobel ceo Hans Wijers' recent announcement at the World Expo 2010 in Shanghai that the company plans to double its revenue in China to $3000 million within five years.
"This is an excellent deal involving an extremely well run business which gives us strong representation in one of China's most promising growth segments," said AkzoNobel's board member responsible for Performance Coatings, Leif Darner, in the company's announcement. "Our global capability, combined with Prime's marketplace knowledge, products and technical know-how, creates an enviable strategic proposition and will allow us to significantly grow ahead of the market."
Through its Car Refinishes business, AkzoNobel said, it is mainly active in China's premium and commercial vehicle refinish sector, represented by its Sikkens, Lesonal and Miluz brands. The Prime acquisition now opens up an opportunity to become the clear market leader in the attractive vehicle refinish mid-market segment.
"I am very happy to have concluded such an exciting deal, which promises great things for the future," commented Prime chairman and ceo, Bao Yifan, in the Akzo statement. Bao will retain a key role within the business. "With AkzoNobel's scale and expertise, we are ideally positioned to continue growing strongly and aim to capture further market share."
Keith Power, AkzoNobel's regional director for the Car Refinishes business in Asia added: "This is an important transaction which gives us access to superior products and new technologies - supported by strong brands and a loyal distributor base - enabling us to gain a competitive advantage in a market with sizeable potential where we previously had limited presence."
AkzoNobel said it currently employs around 6500 people in China, with the country has 11 percent of the company's Research, Development and Innovation resources. Revenue for 2009 totaled $1500 million.