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Deal, Plants Fire Up Hempel’s Growth

Tuesday, June 21, 2011

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Danish coatings maker Hempel is racing toward its ambitious global growth goals, acquiring a major UK paint manufacturer and expanding its protective and marine presence in India in a few short weeks.

Rallying under the slogan “One Hempel - One Ambition,” the company is aiming to double its business and become one of the world’s 10 largest coatings suppliers by 2015. To get there, it is building and buying across multiple sectors and markets.

 Shipyard

 Hempel Group

A new protective and marine coatings production plant will serve Hempel’s growing customer base on the Indian subcontinent.

In the last year alone, the company has opened a coatings plant in Poland and announced plans to build plants in Russia, Argentina and Saudi Arabia.

Crown Paint Acquisition

Now, Hempel has announced the acquisition of Crown Paints Ltd., the UK’s No. 2 coatings manufacturer.

“The decorative segment represents a significant part of the global coatings industry and is expected to keep growing,” Hempel said in a release. “Therefore, the acquisition of a company strong in the decorative market is an important part of Hempel’s strategy.” 

Hempel will retain Crown Paints’ brands and said “daily management and decision power” would “remain local.” The company said it would “continue to develop Crown Paints heritage and business in the UK and Ireland.”

‘Everything We Were Looking For’

“Crown Paints represents everything we were looking for—a solid position in the market, a sound financial situation, as well as innovative R&D and marketing,” says Hempel CEO Pierre-Yves Jullien.

Crown Paints’ CEO Brian Davidson said his company had found “the perfect new owner” in Hempel—”an owner who, like Crown Paints, has many years of experience.”

Terms of the sale were not disclosed.

Hempel has been in the decorative market for decades and has a strong position in the Middle East, Iberian Peninsula and China.

Protective & Marine Expand in India

Hempel is also expanding on the Indian subcontinent, establishing a protective and marine coatings manufacturing unit there and investing up to €20 million ($28.6 million US) in a greenfield plant over the next three years.

“We are excited to expand our presence in the Indian subcontinent and supply not only India, but also Sri Lanka, Bangladesh, the Maldives and Nepal,” says Hempel CFO Kim Junge Andersen.

“We’ve had very positive experiences with our organization in India, and the new plant will significantly boost our ability to serve our growing customer base in this region.”

Plant Technology, Capacity

The new plant will feature the latest in environmentally friendly coating production equipment, including a semi-automatic powder handling system, an automatic liquid dosing system, and a solvent recovery unit.

Designed to house raw materials and the finished product under one roof, the one-building factory will produce nearly 400,000 gallons (US) annually when running one shift, with the capability to produce 634,000 gallons with two shifts if needed.

The factory is fitted with the latest manufacturing equipment designed for maximum productivity, including a bar-code system to track raw materials and finished goods.

Fast-Track Growth

“India is a very important market for Hempel, and the expansion will fast-track our growth in the region,” said Umesh Singh, Director, Hempel South Asia.

“While Hempel already has a large share of the global market in segments including wind turbines, cranes and infrastructures, India has also seen rapid growth in these segments. We look forward to supplying the protective and marine coatings to the growing markets for these segments in South Asia.”

With the new greenfield plant, the company hopes to increase its product assortment and provide a mix of products for the local market, said Andersen.

“We want to build a strong presence in India and be a part of the exciting growth that’s taking place there,” he said.

About Hempel

Hempel produces protective coatings within the protective, marine, container, decorative and yacht market segments.

In 2010, the Hempel Group reported a record 19% increase in net profit, to €92 million (about $75.8 million US). Revenues rose 8%, to €889 million (about $1.27 billion US).

Hempel currently operates 21 factories, 48 sales offices and more than 150 stock points around the world. The company employs 3,600 people in more than 80 countries.

   

Tagged categories: Acquisitions; Decorative coatings; Marine Coatings; Mergers; Protective coatings

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