Alex Lever

News: AkzoNobel performance improvement program

October 20, 2011 by Alex Lever
AkzoNobel performance improvement program

AkzoNobel has come with a performance improvement program to strengthen its competiveness, improve its ability to grow, simplify its support structures and lower its cost base. The program will rearrange underperforming parts of the portfolio, transfer best practices and standardize, as well as simplify key processes.

The Executive Committee (ExCo), which was established on January 1, 2011, has defined a comprehensive three-year plan to improve the company’s performance and deliver €500 million EBITDA. Twenty master plans with over 100 detailed initiatives have been developed in the areas of Supply Chain and Sourcing; Research and Development; Shared Services for Finance; Information Management; and Human Resources.

The program also includes business restructuring; for example, in Decorative Paints Europe and North America and in Performance Coatings’ Wood Finishes and Adhesives business. Company-wide programs to further improve margin management capabilities – as well as employee recruitment and training, particularly in high growth markets – are also being rolled out.

Approximately 40 percent of the anticipated benefits will come from the Supply Chain and Sourcing programs, and a further 50 percent from margin management, Research and Development initiatives, and business restructuring programs. These benefits will accrue across AkzoNobel’s business areas, with more than 40 percent of the benefits in Decorative Paints, more than 30 percent in Performance Coatings and close to 25 percent in Specialty Chemicals. The benefits expected in 2012 amount to €200 million, with a similar level of incidental costs in the same year. The total costs to deliver the program are estimated to be €425 million.

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