When complete next year, the new Performance Coatings facility near Shanghai will be AkzoNobel's largest outside the U.K.
AkzoNobel says the changes will "address the growing demand throughout Asia for new technologies in the packaging, coil, specialty finishes, and powder coatings markets."
The new development and application center, expected to be completed in June 2015, will add capability and capacity as well as double the number of people working in R&D at Songjiang to about 200.
The Songjiang site was recently expanded to create one of AkzoNobel’s biggest resin plants for performance coatings in the world. About 300 people are employed at the location.
“Boosting our R&D capabilities in Asia means we can accelerate the development and formulation of new products tailor-made for the Asian market,” said Conrad Keijzer, AkzoNobel’s executive committee member responsible for Performance Coatings.
“The expanded R&D center will therefore play a crucial role in supporting our growth ambitions—for China in particular—and will provide us with a major innovation facility located close to our customers in the region.”
AkzoNobel, based in the Netherlands, employs more than 7,400 people in China. The new expansion will add more.
Overall, AkzoNobel employs more than 7,400 people in China, including 500 in R&D. In 2013, the company generated revenues in China of €1.6 billion, with the majority coming from local demand.
Finnish chemicals company Kemira, an AkzoNobel rival, has purchased the Paper Chemicals business, part of the company’s Pulp and Performance Chemicals business, which generated annual revenue of €243 million in 2013. Most of its sales came from packaging board grade chemicals.
Kemira said on July 8 it would buy AkzoNobel's Paper Chemicals business for €153 million. Kemira is a global chemicals company serving customers in water-intensive industries.
AkzoNobel's decision to sell follows "a strategic review of the business' fit within AkzoNobel’s portfolio," the coatings and chemical company said in a press release.
"We have concluded that our Paper Chemicals business will have a better fit with another owner, allowing us to focus on our strong chemical platforms," said Werner Fuhrmann, AkzoNobel's Executive Committee member responsible for Specialty Chemicals.
Kemira president and CEO Jari Rosendal called AkzoNobel's paper chemicals "a great fit" with significant potential for his company.
"The Pulp and Performance Chemicals business will continue to focus on global leadership positions in pulp bleaching, colloidal silica and expandable microspheres."
Kemira will use the sale to expand its growth in Asia-Pacific. "AkzoNobel's paper chemicals are a great fit for Kemira, and we expect to achieve significant technological and financial business synergies," said Jari Rosendal, Kemira's President and CEO.
AkzoNobel CEO Ton Büchner called Kemira "a well-established player in this market," adding, "with the sale of our Paper Chemicals business, we are following through with our strategy to focus on leading positions.