AkzoNobel, a global paints and coatings company, has just started operations at a brand new state-of-the-art vehicle refinishes plant in Changzhou. It is the company’s largest manufacturing facility of this kind in the world, aimed at servicing the fast-growing automotive market in China, says Kevin Liu, Regional Director of AkzoNobel’s Vehicle Refinishes business in North Asia.
Changzhou is a growing business city, some 150 kilometres northwest of Shanghai. The city is situated in southern Jiangsu province, where a lot of domestic and international car manufacturers’ plants are located. “We are right in the middle of what is called ‘the coatings centre of China’. Since car sales are expected to grow at a high rate – making China one of the largest automotive market in the world – opening up a sizeable plant in this city was justified”, Liu explains.
Close to customers
Liu adds that the factory is close to some of its largest customers, like General Motors, Shanghai Volkswagen and Ford. Changzhou is also conveniently close to Shanghai, the business and logistics centre of this region. “Via Shanghai we can easily distribute our products to all markets in North and South China.”
A large portion of the factory’s capacity – number of employees: 150 – finds its way to the maintenance and repair market of passenger cars and the manufacture and maintenance and repair of commercial vehicles such as heavy-duty trucks. Liu stresses that it is not just cars and trucks that AkzoNobel produces paint for. China’s high-speed train manufacturers and bus manufacturers are among AkzoNobel’s customers, accounting for 20 percent of customer volume.
Market worth € 750 million
AkzoNobel is one of the leading players in China's market of vehicle refinishes, that is worth around €750 million and has been growing at high pace. The new factory adds around 25 million litres of capacity for vehicle refinishes products of two of AkzoNobel’s international brands (Sikkens, Lesonal) and the domestic brand ‘Prime’.
Although local authorities require chemical plants like the one in Changzhou to comply with stricter rules than before, AkzoNobel built the plant according to the higher level of European standards. Liu: “This is a state-of-the-art plant. The equipment in this factory is actually the latest in the industry. Investing in this equipment translates in a safe workplace for our employees and also ensures a high level of use of sustainable resources. This factory operates on a high level of environmentally friendly production, for example with extensive re-use of solvents.”
Factory number 30
AkzoNobel has been active in China for decades. The new factory in Changzhou is its 30th manufacturing facility in the country. AkzoNobel currently employs more than 8,000 people in China. Revenues totalled €1.6 billion in 2013, with the majority being generated from local demand. “We expect demand for vehicle refinishes to grow further”, Liu said. “Fortunately there is room at the site for expansion, both for vehicles refinishes production and for manufacturing of other AkzoNobel products.”