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Akzo still plans to double China sales

AKZO Nobel NV, the global paint maker, said its China sales goal of US$2 billion by 2012 hasn't changed even though the short-term outlook for the market remains uncertain.

The Dutch company reported an unexpected first-quarter net loss of 7 million euros (US$9.1 million) as the global recession eroded demand for auto and furniture coatings in Asia.

"We saw the macroeconomy (in China) last month coming back more promising than the first couple of months this year, and April seems to indicate there could be some stabilization on the way," said Jorn Seiero, Akzo Nobel's China president. "But the outlook is still unsure for this year, so we cannot say the crisis has bottomed out."

Akzo's China sales totaled 1.054 billion euros last year, or 7 percent of its total. It represented single-digit growth from 2007 due to a sharp decline in demand in the fourth quarter, Seiero told Shanghai Daily.

Akzo saw China sales jump 16 percent to US$1.03 billion in 2007, but this was not comparable to 2008 due to an acquisition and divestment.

Still, Seiero said the company's earlier goal to double China revenue by 2012 is still achievable.

"China has been doing better than many other places in the world, so the good place to be at the moment is China, and the better thing to do now is be ready for the recovery."

Seiero said much of the company's businesses are related to China's stimulus package and Akzo's diversification will also help it weather the downturn. For example, the marine and protective coatings businesses remain very solid in China, he said.

The company, which supplied coatings for the Bird's Nest and Water Cube venues for the Beijing Olympics, was expected to get a big boost from the World Expo next year in Shanghai, Seiero said.

Akzo will start initial operations by the end of the year at a 275 million euro chemicals manufacturing complex in Ningbo, Zhejiang Province. It has invested close to US$600 million in China, including the Ningbo project.


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