Paints and coatings company AkzoNobel says its intention to acquire Changzhou Prime Automotive Paint will aid its target of target of doubling China revenue to US$3bn by 2015.
The Netherlands-based operation has agreed to purchase Prime – one of China’s largest vehicle refinish suppliers and a leader in the mid-market segment – a sector estimated to double in size in five years – with a view to finalising the deal in October.
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Based in Jiangsu Province, the company develops, manufactures, markets and distributes automotive coatings, primarily for the refinish market. No financial details have been disclosed for the deal.
“The important thing for us is we are very much in the vehicle refinish business in China and this will allow us to get access to the trade segment,” an AkzoNobel spokesman in Amsterdam told just-auto.
“We are already present, mainly in the premium segment in China.”
The spokesman acknowledged the ambtious nature of plans to double revenue within five years – “a tough target” – but pointed to anaylsyst reports citing a potential 14% growth rate in the trade sector to 2015.
“In 2020 China could have 200m cars,” said the spokesman. “With that you are bound to have some bumps and scratches – that is perfect for us – this is proof of what we said that we want to double.”
Through its car refinishes business, AkzoNobel is mainly active in China’s premium and commercial vehicle refinish sector, represented by its Sikkens, Lesonal and Miluz brands.
The spokesman declined to be drawn on future purchases in China, but noted its revenue targets would consist of organic growth that could include “selective acquisitions,” and to “get our hands on technology we don’t have.”
