Jayakumar Krishnaswamy, MD, AkzoNobel India, explains why innovation, safety & sustainability are at the heart of operations for the paints giant.
By MITALEE KURDEKAR
After operating in the country for about six decades now, AkzoNobel India is qualified enough to call itself a veteran in the domain of coatings. Long before the local entity was acquired by their parent company in 2008, they were ICI (Imperial Chemical Industries), a pioneer of water-based paints in India and instrumental for the vital transition from solvent-based to water-based emulsions.
But resting on past laurels is not something that the company believes in. Innovation in technology and products drives them, rivalled only by an unwavering focus on safety, with sustainability following closely on its heels. The three tenets work rather seamlessly, as is illustrated by the aforementioned shift to water-based paints, which are known to be less hazardous to people and the environment at large.
The company operates in three businesses: Decorative Paints (DP), Performance Coatings (PC) and Specialty Chemicals. It manufacturers these products out of six locations in India, namely Thane (DP & PC), Hyderabad (DP), Mahad (for specialty chemicals), Bengaluru (PC), Mohali (DP & PC), and the latest addition Gwalior (DP).
“In the past 60 years, we have been trend-setters in developing new coating technologies. Others have followed, but we have been pioneers when it comes to developing the market in the country. We have an R&T centre, based in Thane, which is involved in developing products specific to market requirements,” says Jayakumar Krishnaswamy, MD, AkzoNobel India.
Innovating in India
Just last year, a number of innovations came out of India. The decorative paints business in India falls under the South East South Asia and Middle East region (SESAME). The countries cross leverage and share innovations with each other. For instance, Dulux WeatherShield ‘PowerFlexx’ a super-premium exterior paint was introduced in Indonesia and then brought to India, where it was tweaked to suit the weather here and then immediately brought to market. Dulux ‘Velvet Touch Diamond Glo’, an ultra-premium interior paint, was launched last year for which the research & development was undertaken in India, at the Thane R&D centre and regional centres.
Krishnaswamy proudly relays that they have an impressive range of formulations. Some unique innovations are the heat resistant coating products – ‘Chartek’ and ‘Interchar’, which are preferred applications for building and construction segments. ‘Chartex’ epoxy intumescent technology provides excellent fire protection, corrosion resistance, besides being lightweight, with a proven long-term durability and minimum maintenance. The company is also continuously moving to low-VOC (Volatile Organic Compounds) products and more water-based products, in an effort to be environment-friendly.
Their unique products have won the company clients in the automotive and aerospace industry and made them the preferred suppliers of marine coating paint to the Indian Navy for their ships. While decorative paints is very consumer-centric, the performance coating business caters to various industries, including Marine, which directly goes into ships and yachts; Protective Coating, which has numerous customers including vehicle body parts manufacturers or appliance parts (handles, panels, etc.) manufacturers; Powder Coating on appliances such as refrigerators and washing machines or on vehicle parts or even household metals or lighting; and Metal Coating that is used in the steel industry or anything used for roof coating.
AkzoNobel is a global leader in the Vehicle Refinishes Business as they provide leading products and services. The company has introduced water-based coatings for car refinishing. Yet, despite the success of local brands, the biggest of them being Dulux – which is a household name in India – AkzoNobel India’s roughly $415 million in revenues constitute 3% of the MNC’s total global revenue figures (the European market ranks highest in revenues for them).
“AkzoNobel India’s strategy is to grow the three businesses with the market. Through our robust growth and improvement in market share we aim to lead the market in the next 5-7 years,” explains Krishnaswamy.
Safe & green
Speaking of standards, the company’s stress on HSES (Health, Safety, Environment & Security) is a matter of great interest and reflected through all their processes. Although the production process seems fairly simple, it can be hazardous given the nature of raw materials used, which include resin, solvents, pigments and additives. While some of these are sourced locally from suppliers within a 10km range of plant locations, the company also leverages its global competencies to procure raw materials from international vendors (material like resins and pigments maybe imported). These are then processed at individual plants using world class processes and technology, from unloading to high speed dispensing or charging, bead milling and finally packing.
Safety is paramount in AkzoNobel India to begin with, the company operates Behaviour Based Safety (BBS) programmes at all its sites and offices. BBS is given a lot of importance, and everyone – be it a company employee, contract worker or a visitor– has to watch a safety video before entering any of their manufacturing sites. In addition to this, following appropriate Personal Protection Equipment (PPE) standard is essential, besides appropriate safety guidelines such as holding handrails, refraining from using the mobile phone while walking and following the walking path has to be followed. While this may seem typical of most factories, AkzoNobel India is one of the very few companies enforcing these rules strictly. In addition to this, each employee has personal targets to reduce the use of fresh water, energy and waste generation through operations.
“We make sure that all our strategies or what we call the HSES agenda is aligned to global standards. These are the highest standards that we maintain in the chemical industry, in terms of the manner in which we operate in the country. All of us, as leaders, are accountable for this and have targets for each of these parameters,” says Rajiv Rajgopal, director, India and South Asia Custer, Decorative Paints, AkzoNobel. Underlining this, globally the company has been ranked number one on the Dow Jones Sustainability Index for the fourth year running.
Colour proud
Besides HSES, the company prides itself on being a leading colour company in both the decorative and performance coatings businesses. With a tagline (for DP) as ‘Adding colour to people’s lives’, they do not take colours lightly. Decorative paints has a fan-deck of 2,200 colours, while in performance coatings, the shades are limitless, and derived bases customer orders for various hues. While the company provides tinting machines to dealers, so that customers can come pick the shade they like and have it made right there and then by the machine; the performance coatings business is even more difficult. Today, every car, washing machine or refrigerator in the market is a different colour. With the parts manufacturers and vendors for various OEMs approaching AkzoNobel for coatings, they have to come up with an exact tint match. The company has, of course, accepted this challenge, even being able to reproduce coatings just to conceal scratches on vehicles as part of their Vehicle Refinishes Business.
“When you are repainting, you are not repainting the entire body of the car, but just a patch, so you have to match the colour to the finest degree. It is a very tough job. When we get such a car, anywhere in the globe, we get a digitally-transferred panel and have to replicate that colour in 24 hours. For this, we use high level of technology, so much so that you cannot distinguish the difference with the human eye or even with any equipment. Think about it, for a high-end car, the owner will not accept paint that is slightly different. So it has to be precision to the highest level,” points out Ajith Kumar, head of operations, Performance Coatings, AkzoNobel India.
Chain of success
Rajgopal states that the company has a very flexible manufacturing facility, for which he gives full credit to Krishnaswamy – who use to head supply chain in India – for putting an advanced and sophisticated supply chain network in place. They optimise their productivity by sometimes operating in just two or even one-and-a-half shifts. However, the capacity at their plants is all expandable to accommodate any bulk and future orders. For instance, four units dedicated to DP have a combined expandable capacity of 200 million litres.
“In the last three years, we have set up a green field site in Gwalior. We have had two brown field expansions in Bengaluru and Hyderabad. At this point of time, we have adequate capacity to meet the requirements of the business for the next 18-24 months,” conveys Krishnaswamy.
The PC business undertakes two types of orders: MTS (Made to Stock) for delivery that are repeated regularly and MTO (Made to Order) for client specific requirements. MTS is based on past sales trend forecast. These orders are stocked on site and in around 18 warehouses, across the country. As far as inventory hold for decorative paints is concerned, Joseph Varghese, head of integrated supply chain, Decorative Paints India, AkzoNobel, suggests they have their “safety stock level” to meet all immediate and some future customer demand, and this strategy is working well for them.
In addition to this, they have an elaborate ERP (Enterprise Resource Planning) system in place. In the DP business, they use SAP, whereas they use MFG/PRO for the PC business. “The big difference between DP and PC is that in the former the completed order is sent to the dealer for stocking, whereas in PC, it gets sent to the customer directly. Similarly, you have small loads in PC, whereas in DP you can load one truck completely with multiple batches. The logistics team works with third party vendors to transport our goods, based on customer requirements. Tracking of delivery time is of paramount importance that provides unique competitive advantage says Kumar.
From factory to market
The Indian market is dynamic and every order is ‘urgent’, which poses a challenge. But that is also a customer requirement, hence cannot be ignored. AkzoNobel therefore believes in having an agile backend system and standardising the process to make sure that the customer gets delivery on time. This is especially tough in the PC business, since they do not always stock, making the pressures very high. Also, since the manufacturing process is complex and colour matching being an important process it is critical to have the skilled talent.
The Indian arm of the business manufactures mainly for local sales, but also produces a certain amount of products for neighbouring countries. As Krishnaswamy puts it, “Logistics is the principle criteria in designing a supply chain for the coatings industry. Transporting liquids across long distances may not be cost effective. Hence in most cases it is best to set- up manufacturing plants close to the market. However, there are exceptions that are technologically advanced and need special manufacturing process and are produced in only in a few locations and distributed across the world.”
In line with the coatings industry, AkzoNobel India has interesting plans for growing the business and Krishnaswamy is optimistic of what lies ahead. With the recent Union Budget announcing improvements in the infrastructure sector, there is bound to be a multiplier effect. “The allocation of funds in infrastructure is thus likely to propel the transport, warehousing and logistics businesses rapidly. This budget is all set to boost the sentiment of the real estate sector and now there is enough on the platter to induce home buyers and developers, taking real estate forward on the road to revival and sustained growth. We look forward to exploring these positive developments for our businesses,” he says.
“To maintain market positions, our ambition is to grow in line with, or faster than, our relevant market segments. In the last 60 years, AkzoNobel India has been a leading player across the three businesses of Decorative Paints, Performance Coatings and Specialty Chemicals. Introducing some of the most striking innovations, the company has continued its journey of finding innovative products; focusing more on our entire value chain and equipping our employees to recognise new possibilities.
The company further plans to leverage the current business landscape in order to attain sustainable business performance through sustainability, innovation, operational and commercial excellence,” Krishnaswamy signs-off.