Engineering News

Akzo Nobel to invest EUR 250 million in Chinese chemicals plants
Thursday April 26, 2:12 am ET

Arnhem, the Netherlands, 26 April, 2007 - Akzo Nobel is to spend EUR 250 million on building two chemicals plants in China - the first confirmed investments in a new multi-site being established by the company in Ningbo.

As announced last October, a 50 hectare plot has been reserved within the Ningbo Chemical Industry Zone (NCIZ) and the two new facilities - for the manufacture of ethylene amines and chelating agents - will be the first to be constructed on what will be one of the biggest sites for the company's activities in the world. Work will begin once the relevant approvals have been obtained from the Chinese authorities.

"Accelerating growth - particularly in the emerging markets - is one of the company's main strategic priorities," said Leif Darner, the Akzo Nobel Board member responsible for Chemicals. "The scale of this substantial investment not only underlines the fact that our growth strategy is gaining momentum, but also reinforces our commitment to consolidating our leadership positions across all businesses."

Continued Darner: "China is an extremely important market for us and we are having to respond to growing demand for our products. We plan to make further investments in grassroots chemical production facilities in Ningbo at the appropriate time."

Both plants - which will create several hundred new jobs - will utilize state-of-the-art technology and will meet high, self-imposed standards for eco-efficiency. The chelating agents plant is expected to start up in 2009, followed by the ethylene amines factory in early 2010.

"We are planning to build two world scale production facilities for both ethylene amines and chelates similar in size and scope to our existing plants in Europe and the United States," added Jo Lennartz, General Manager of Akzo Nobel's Functional Chemicals business. "We will also install the capacity to manufacture our own key raw materials. We have chosen Ningbo for these investments because its location just south of Shanghai and its excellent transport links will enable us to supply the growing needs of our customers in China and the entire Asia Pacific region."

Akzo Nobel currently operates two production sites in Ningbo (for Polymer Chemicals and Powder Coatings) and Darner points to the Coatings location in Suzhou, near Shanghai, as an example of how the company is already running a successful multi-site in China.

"Our activities in Suzhou prove that the multi-site model can be highly efficient and extremely productive and we want to mirror this success in Ningbo. Investments such as the one we are announcing today emphasize Akzo Nobel's commitment to organic growth in emerging markets and signal our intention to continue with our expansion plans."

Ethylene amines are intermediates used in a wide variety of industrial applications, such as agriculture, textiles, pharmaceuticals, plastics, cosmetics and detergents. The company's chelating agents are used as intermediates or end products in a diverse range of applications to help enhance everyday human and animal well-being, such as micronutrients and food and beverage preservatives. They are also essential for photo and film processing, the bleaching of pulp and the manufacture of soaps and detergents. Leading brands include Dissolvine® and Ferrazone®.

Note: Akzo Nobel is a Fortune Global 500 company and is listed on both the Euronext Amsterdam and NASDAQ stock exchanges. It is also included on the Dow Jones Sustainability Indexes and FTSE4Good Index. Based in the Netherlands, we are a multicultural organization serving customers throughout the world with coatings, chemicals and human and animal healthcare products. We employ around 62,000 people and conduct our activities in these four segments, with operating subsidiaries in more than 80 countries. Consolidated revenues for 2006 totaled EUR 13.7 billion. The financial results for the second quarter will be published on July 24, 2007.

Source: Akzo Nobel NV

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