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Struggling AkzoNobel Shakes Up Helm

Thursday, March 1, 2012

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Fighting to maintain its position at the top of the global coatings industry, AkzoNobel has announced major changes to its senior global leadership.

Rob Frohn, a 28-year company veteran who heads Specialty Chemicals—the company’s largest business unit—will step down as of May 1. At the same time, the independent Supervisory Board that oversees the company will add two members and shed one.

Out: Rob Frohn will leave AkzoNobel after 28 years. Baroness Virginia Bottomley will step down from the company’s independent Supervisory Board.

Those changes, announced Thursday (March 1), are in addition to a previously announced change in command at the CEO position, which Hans Wijers will vacate this month.

The shakeup follows a rocky fourth quarter and year for the company, which reported an $89 million loss in the fourth quarter, despite operating under a Performance Improvement Plan established mid-year to improve its numbers.

AkzoNobel is the world’s largest paint and coatings company and a major producer of specialty chemicals.

Frohn Steps Down

The company said Frohn and the Supervisory Board had “mutually agreed” that Frohn would leave the Board of Management on May 1.

The five-member Board of Management is part of the nine-member Executive Committee, which has day-to-day responsibility for the company. Under Dutch law, the Board of Management is accountable to the independent Supervisory Board, which is separate from the company management. 
 
Frohn joined AkzoNobel in 1984 and has held numerous positions around the world since then. He joined the Board of Management as CFO in 2004 and assumed responsibility for the Specialty Chemicals business area on May 1, 2008.
 
Business Challenges

Specialty Chemicals produces more than 2,000 products and is the largest of AkzoNobel’s three main business units, accounting for about 37% of its business. (Decorative Paints and Performance Coatings make up the rest.)

The Specialty Chemicals portfolio consists of Industrial Chemicals, Surface Chemistry, Pulp and Paper Chemicals, Functional Chemicals and Chemicals Pakistan. Despite some gains in the first three segments, the unit’s overall sales were nearly flat in 2011, and full-year earnings (EBITDA) declined by 4 percent from 2010.

In:  Ben Verwaayen and Sari Baldauf will join the Supervisory Board.

“Naturally, I’m sad to see Rob leave the company,” said Wijers. “He has made an outstanding contribution to all parts of the business during a 28-year tenure at the company. We wish him all the best for his future career.”
 
Werner Fuhrmann, who now heads Supply Chain and Sourcing, will temporarily fill Frohn’s position.

Board Changes

Meanwhile, if approved as expected at the shareholders meeting April 23, the eight-member Supervisory Board will increase to nine.

The new members would be:

• Sari Baldauf, now non-executive Chairman of the Board of Fortum Oyj, a Finnish energy company, and director at several other companies; and

• Ben Verwaayen, currently the CEO of Alcatel-Lucent.

Baldauf has senior executive experience in building and running global businesses at Nokia Corp. She also holds a number of non-executive positions, including at Daimler AG.

Verwaayen also has many years' experience at the senior level of international businesses, including as CEO of BT Group and as Managing Director of KPN in the Netherlands.
 
As Baldauf and Verwaayen arrive, Baroness Virginia Bottomley will step down from her position on the board after 12 years.

Supervisory Board Chairman Karel Vuursteen said Bottomley’s “expertise in government, policy, business and economics has been crucial in the strategic development of the company over recent years.”

He added: “Looking forward, I am delighted that we have been able to propose two such high-caliber people for the Supervisory Board. Together with my colleagues, I'm looking forward to benefiting from their experience and contributions."

New CEO

AkzoNobel announced last June that Wijers would retire this year, to be succeeded by Ton Büchner, then the CEO of Sulzer AG, a leading Swiss manufacturer of industrial machinery and equipment.

Wijers, 61, will step down after the Annual General Meeting of Shareholders this month. A former minister of economics in the Netherlands, Wijers joined AkzoNobel’s Board of Management in 2002 and became  CEO in 2004. He is credited with transforming the sprawling company—the product of a history of mergers and acquisitions—into a global market leader in coatings and specialty chemicals.

AkzoNobel

In and Out: Ton Büchner (left) will take over April 23 for longtime CEO Hans Wijers after the company’s annual shareholders meeting.

Büchner, an engineer by training, joined AkzoNobel on Dec. 1 and the Executive Committee on Jan. 1. He holds master’s degrees in civil engineering and business administration and attended the Stanford Executive Program in Palo Alto, CA.

Before joining Sulzer in 1994, Büchner worked in the oil and gas industry at Allseas Engineering in Europe and AkerKvaerner in Southeast Asia. He has lived and worked in The Netherlands, Singapore, Malaysia, China, Switzerland and the US.

News of Büchner’s appointment as head of the $20 billion company drew a positive response from the market.

Vuursteen praised Büchner’s “excellent track record of delivering strong results and experience of leading businesses in high-growth markets” and said Büchner would build “on the strong foundations left by his predecessor.”