Akzo Nobel And The Vietnamese Paint Market

- Jun 08, 2019-

Dutch multinational coatings manufacturer Akzo Nobel has been selling architectural coatings in Vietnam since 1992 and has been operating in Vietnam. With the development of the business, Akzo Nobel invested in four state-of-the-art production facilities in Vietnam. In 2015, AkzoNobel invested in a high-performance coating facility that doubled the production of its existing powder coating production equipment.

Coatings World: What is the difference between AkzoNobel Vietnam and other paint manufacturers in the country?

Pamela Phua: With our history in the Netherlands dating back to 1792, Akzo Nobel and Akzo Nobel Vietnam provide quality and green innovation to meet the needs of our customers through our passion for coatings. Globally, we are recognized by architects, designers and contractors as a reference for the industry with professional color design and sustainable thought leadership.

We are actively providing one-stop solutions for the construction industry in Vietnam, our decorative coatings and performance coatings, including wood coatings, coil coatings and packaging coatings; powder coatings, marine protective coatings, specialty coatings. Dulux is our popular home brand and is a boutique choice for decorative painting.

In addition, we have a wide range of sustainable products that effectively support Vietnam's response to the challenges of current sustainability and urbanization. In the country, we are widely known as the first powder coating manufacturer.

In general, powder coatings are one of the fastest growing coatings industries, as powder coatings are increasingly seen as the preferred solution in a world of high environmental concerns.

CW: How many production plants does AkzoNobel operate in Vietnam? What is the scale and scope of all production facilities? What is your market share in the country's construction and industrial sectors?

Phua: We have four production sites in Ho Chi Minh City (Ho Chi Minh City), Dong Nai (Dongnai), Binh Duong (Pingyang) and Bac Ninh (Bei Ning) to serve retailers and project customers.

Our powder coatings plant is located in Nhon Trach (Dong Nai) with 151 employees and a specialty coatings plant located in Que Vo (Bui Ning) with 64 employees. The plant in Ben Cat (Pyeongyang Province) supports the decorative coatings business, which will increase the annual production capacity to 100 million liters. It is our largest factory in the country with 336 employees. In Bien Hoa (Dongnai), 320 employees are engaged in the production of wood coatings, coil coatings, packaging coatings and adhesive coatings.

Wood coatings for construction and decoration will continue to be the main consumers of paints and varnishes, especially in Vietnam, where major cities continue to build large-scale booms due to years of rapid economic growth. We are now one of the major players in the country's construction and industry, and decorative coatings rank first in Vietnam.

CW: Do you cater to Vietnam's export market? If so, what are your company's main export markets?

Phua: Our four coatings factories in Vietnam are supplying coatings to customers throughout Southeast Asia. Southeast Asia is a market that is experiencing strong economic growth with a large population and a high level of construction. This is one of our main markets and we have been at the forefront for many years.

In the past ten years, Akzo Nobel has invested heavily in the region, especially in Vietnam.

CW: Despite the steady growth of the Vietnamese coatings industry, the per capita consumption of paints and coatings in the country is very low. Do you see changes in the medium and long term?

Phua: At present, due to years of rapid economic growth, we have witnessed the massive construction boom in big cities. A large number of paints will be required after huge high-end residential developments have changed the city's urban areas and the apartments in those buildings. In view of this, we see a potential increase in the consumption of paints and coatings in Vietnam.

CW: For AkzoNobel, which part of the Vietnamese coatings and coatings industry is the most important?

Phua: In Vietnam, construction and general industrial coatings are the largest part, which accounts for the largest share of our business. We are in a leading position in all segments of this market.

With the recovery of Vietnam's economy and the growing population in the next five years, we believe that the high-end segment will be the fastest growing segment of market sales. The market value of the mass market will also be huge, which is also the largest market share.

CW: What do you think are the three major challenges facing the Vietnamese coatings industry?

Phua: First, as more and more players join the game, the business environment becomes more and more competitive. This requires us to redouble our efforts and stay ahead.

Second, the cost of raw materials (such as Petroleum Resin C9) often fluctuates up and down, affecting the entire supply chain, so we are always looking for alternative materials that are both sustainable and economical.

Third, Vietnam is experiencing a new trend of urbanization and construction, which means that it will take some time for Vietnam to become familiar with our technology, not the traditional method.

However, we see these challenges as opportunities, and we will take advantage of these opportunities to differentiate ourselves from our competitors.

CW: Vietnamese consumers are considered to be one of the most price-sensitive consumers in the world. To what extent will the price increase caused by rising crude oil and titanium dioxide prices become a stumbling block to the current and future growth of the Vietnamese coatings industry?

Phua: This is a common market trend, which has led to some inevitable fluctuations in product prices. As consumers become more discerning and environmentally conscious, eco-high-end products are emerging as consumers look for products that are more environmentally friendly than mainstream products. With the development of today's technology and innovation, we have seen a lot of opportunities in this field to flourish. In the long run, this will be our top priority.

We will continue to take proactive steps to new innovative and environmentally responsible coating solutions because we believe this is true, both ethically and commercially.

CW: Green or environmentally friendly coatings have almost become the norm in developed countries. What do you think of this segment of the Vietnamese coatings industry? What is the approximate percentage of total sales of these products in your domestic market?

Phua: Producing green or environmentally friendly coatings is not part of our production, but the focus. Staying ahead of the curve in developing environmentally friendly coatings is one of our top priorities. We produce according to the highest environmental standards to minimize harmful emissions and waste from our plants and our customers' plants.

In Akzo Nobel Vietnam, we are not only aware of sustainable business operations, but also the deep-rooted practices in our DNA. As a leader in the decorative coatings industry, we are committed to protecting the environment. Almost all of the products we offer to the Vietnamese market are the least influential, and we are gradually introducing sustainable products to Vietnam.

Through the Interpon and Resiscoat brands, AkzoNobel provides first-class local services to customers across the country, consistently reliable quality (30-year product warranty) and solutions.

CW: What is the most challenging task in your career? How did you deal with this situation?

Phua: My initial role in research and development is very suitable for me because my degree is chemistry. I have been a Director of R&D for 12 years in the SESAME (Southeast Asia Middle East) region and have been the Director of the Global Exterior Wall Coatings Professional and Research Group for the past 7 years. Last year, I started my new business role as General Manager of AkzoNobel Vietnam. This business role is new to me. However, we have achieved more than expected results, thanks to the strong leadership of my team and commitment, dedication and hard work. Passion, resilience and commitment to the team are values that I value very much. I believe these are the motivation and help for the success of me and my team.