Paint producer AkzoNobel significantly increased sales prices in the first quarter to compensate for the sharp rise in raw material and transport costs. The amount of paint sold was actually lower than a year earlier. In times of corona, people more often did painting jobs in and around the house with AkzoNobel brands such as Flexa, Dulux, Levis and Sikkens.
According to the company, prices were increased by 17 percent compared to last year. As a result, turnover could be boosted by 12 percent to 2.5 billion euros. The sales volume decreased by 7 percent. AkzoNobel also suffered from the strict lockdowns against the spreading coronavirus in China, with people not allowed to leave the house.
The company says that costs for raw materials and transport have increased by 334 million euros compared to last year. AkzoNobel speaks of an “unprecedented cost inflation” for the paint industry. Recently, for example, oil has become very expensive due to the war in Ukraine.
AkzoNobel also said that the majority of its coatings activities in Russia have now been shut down due to sanctions against the country. The company expects more Russian activities to come to a standstill in the coming months, mainly because of the problems with the supply of raw materials.
The company had previously suspended all its activities in Ukraine due to the Russian invasion. Ukraine and Russia accounted for about 2 percent of AkzoNobel’s turnover before the war broke out. The company has about 650 employees in the two countries.
AkzoNobel believes that high cost inflation will gradually ease in the second half of this year. The company continues to make price increases to offset the more expensive costs.
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