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Fresh off a year of record profit and a new plant in Poland, international protective coatings maker Hempel Group is planning new facilities on several other continents.
The company announced Thursday (April 28) that it had signed an agreement to build its first paint production facility in Russia. It has also announced general plans to build new plants in Argentina, Saudi Arabia and India. Hempel opened a plant in Poland a year ago.
Market Demand Cited
The Denmark-based manufacturer of protective, marine, container and decorative coatings says it has signed an investment agreement with local government officials to build the new production facility in the Russian region of Ulyanovsk, about 550 miles east of Moscow.
The $34.1 million plant is scheduled to start production in December 2012. Hempel says demand for its coatings in the Russian market is growing.
“This will be our first Hempel factory in Russia,” says CFO Kim Junge Andersen. “We’ve had a very good experience with our organization in Russia, and they have become well-established in the market. This plant will significantly increase our ability to service our customers in the region.”
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| Hempel’s marine maintenance coatings business grew by almost 7 percent in 2010. |
Hempel currently has 310 products available on the Russian market. The new factory is expected to expand that lineup six-fold, with a mix of standard and specialized products for the local market.
“Expansion in the Russian market has been an important element in Hempel’s business strategy,” says Andersen. “Our investment in this plant will be instrumental in meeting goals for our company as well as for our customers.”
Green Production
Hempel says the Russian facility will feature the latest in environmentally friendly coating production equipment technology, including a semi-automatic powder handling system, an automatic liquid dosing system, and a solvent recovery unit that is expected to recover up to 90 percent of the solvents used in production.
Designed to house both raw materials and the finished product under one roof, the one-building factory will occupy a 753,000-square-foot plot.
Under one-shift operation, the factory will produce about 4.3 million gallons annually. The factory can also operate with two shifts to increase annual production capacity to about 6.9 million gallons.
All floors will be sealed to prevent soil contamination in the event of a spill, or to collect water in the event of a fire. The plant will employ about 120 people.
Growth Reported
The Hempel Group manufactures and sells protective coatings in more than 80 countries.
The company reported a record net profit in 2010, despite the rising cost of raw materials. Net profit increased by 19% over the previous year, to $78.6 million US, the company reported recently.
In the protective segment, Hempel’s business in the U.S. and China grew significantly, while European operations were strengthened by the new factory in Poland and positive results in Russia.
Marine Maintenance returned top-line growth of almost 7 percent, while the container business—“after almost disappearing in 2009,” the company said—rebounded to make a positive impact on the Group’s bottom line. The decorative segment also reported significant growth in China and the Middle East.
The results prove that, “even in a challenging business environment, we can control our costs, anticipate changes in the market, and react relatively fast,” said Pierre-Yves Jullien, president and CEO.
The company also said it had “started 2011 with solid growth, enabling it to go ahead with plans for new acquisitions” and for new production facilities in Russia, Argentina, Saudi Arabia and India.
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