Akzo Nobel expecting to post record results for 2000

Akzo Nobel has confirmed, ahead of a detailed announcement on February23, that it had a record year in 2000, with profits increasing more than 20% and sales likely to total 14 billion euros ($13.28 billion). Cees van Lede, the Dutch group's chief executive, noted that the "excellent year" was due in no small part to Akzo's divestment of fibers, favorable economic circumstances and positive currency effects, but noted that the firm "improved by growing the business in the right places." He said that in Asia, Akzo benefited from "a remarkably-quick recovery from the crisis which erupted during late 1998," while Organon, the group's major pharmaceutical unit, has seen US sales virtually double within the last three years.

Akzo has been criticized by analysts in the past for its hybrid structure, but Mr van Lede claimed that "our diversity is an asset." He added that the firm is not in the business of defending what it has, but in adapting to changing market conditions. "We will adjust our organization to the requirements of today's and tomorrow's customers," the chief executive said, noting that the real added value of Akzo as a focused hybrid "lies in the optimal use of our collective know-how."

For 2001, Akzo's priority is to grow its pharmaceuticals business fastest (followed by coatings and chemicals) and that, barring acquisitions, its drugmaking unit may generate over 50% of operating income by the year 2004. Also, an employee share plan is being introduced in the Netherlands, the UK, the USA and Sweden, with other countries to follow soon. Summing up, Mr van Lede said that Akzo is looking for further value creation in 2001, given its "stronger and more coherent portfolio." He concluded that the firm "will simply practice what we preach" during the coming year, and although less favorable external conditions are expected in 2001, "we are convinced that we can further strengthen Akzo [and] beat last year."