Despite tough times for both the market and the company, AkzoNobel has taken a big step toward its new £110 million ($174.3 million) factory in North East England.
The plant, in Ashington, Northumberland, will be the new home of AkzoNobel’s UK Decorative Paints operations, which encompass 18 sites, more than 216 locations, and 4,100 employees.
|The new factory will reduce energy consumption per liter of paint by 60 percent, AkzoNobel said.|
The new plant, which gained local approval last week, will replace a current site in nearby Prudhoe and a manufacturing operation in Slough, about 300 miles south. Slough, near London, will remain the headquarters for the UK Decorative Paints business for marketing and global R&D.
The investment comes at a challenging time for AkzoNobel, both for its Decorative Paints segment in general and for the European market in particular.
Earlier this month, the company announced an $89 million loss for the fourth quarter, including declining demand in Europe and major losses in Decorative Paints. The segment’s Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) plunged 83 percent for the fourth quarter and 20 percent for FY 2011.
Revenue for Decorative Paints Europe dipped 1 percent in the fourth quarter, despite major price increases. The company announced a restructuring of its European operations, noted Europe’s recent economic uncertainty, and expressed concern about a recession there.
It was not clear how many employees might be displaced by the move to the new site. AkzoNobel said it was “committed to ensuring appropriate support and development” for employees who want to transfer there from Slough.
AkzoNobel said the move “reinforces AkzoNobel’s commitment to ensuring that some of its most recognizable brands continue to be manufactured in the UK, with a particular focus on the north-east.” The plant will be one of the biggest manufacturing investments in the region in recent years.
The company’s Decorative Paints brands include Dulux, Polycell and Cuprinol. Its UK operations encompass 18 sites and over 216 locations, with a total of 4,100 employees.
|The new factory will be located in North East England, replacing a manufacturing operation near London.|
AkzoNobel said the new factory would reduce energy consumption by 60 percent for each liter of paint it produces “by employing cutting-edge manufacturing technology and the latest in building design” and by “recycling and reusing waste and water.”
The Ashington plant follows plans for about $15 million in investments in new research facilities in 2011 at AkzoNobel’s Felling site in the UK.
“Receiving planning permission is another step along our timeline towards 2014, allowing us to start building on this new world-class facility,” said Guy Williams, AkzoNobel’s UK Country Director. “This investment highlights the importance of the north-east to AkzoNobel’s operations, placing the region at the heart of our UK manufacturing business for the long term.”