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Dutch firm finds sweet spot despite property restrictions

By Zhou Mo in Hong Kong | China Daily | Updated: 2018-02-03 10:22
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An employee selects paint from a stack at AkzoNobel NV's paint factory in Ashington, the United Kingdom. Provided to CHINA DAILY

Global paints and coatings company AkzoNobel said it expects its business growth in the Chinese market to "maintain the current momentum" in the coming years, despite concerns that tightening housing policy could deal a blow to the industry.

China is one of the most important markets for the Netherlands-headquartered company, Lin Liangqi, president of AkzoNobel China, said.

China accounts for approximately 12 percent of its total revenue each year.

"We are benefiting from China's economic growth. In the last 10 years, we have been growing at double-digit rates," he said, without giving a specific figure.

Lin acknowledged that the cooling down of China's real estate market in the wake of tightening government policy could negatively affect the company's business, but said he believes there is still plenty of space to explore in the country.

The major impact that policy regulation would exert is on the new home market, he said.

"But China is such a big country in the repainting sector. Most buildings have not been repainted for more than 10 years ... We still see a lot of potential for China in that area," Lin told China Daily in an exclusive interview.

"We are not worried about the cooling down of real estate. If real estate continues (to develop), we will still benefit from it."

The Chinese market generated 1.77 billion euros ($2.20 billion) in revenue for it in 2016, down 3.3 percent from 1.83 billion euros a year earlier, according to the company's annual report.

AkzoNobel now operates in around 80 countries with 46,000 employees globally, with its China-based staff comprising 15 percent.

The paints and coatings company owns a number of well-known brands, including Dulux, Sikkens, International, Interpon and Eka. It is the coatings supplier for many famous buildings in China, including Hong Kong's IFC and the Hong Kong-Zhuhai-Macao Bridge.

The company is investing actively in China to strengthen its presence in the country. Last year, it opened a facility in Dongguan, in southern Guangdong province, to produce aerospace coatings for the North and South Asian aviation market.

A new plant producing powder coatings is also coming up in Changzhou of eastern Jiangsu province.

Lin said AkzoNobel will continue to invest in China, but the focus will be on improving its sustainability operations as industry regulations increase and people attach more importance to environmental protection and quality.

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