Notice Regarding Global Organizational Realignment of Automotive Coatings Business -Establishing a structure to better serve our global customer needs-

Nippon Paint Holdings Co., Ltd. (Head Office: Chuo-ku, Tokyo; Chairman, President & CEO: Masaaki Tanaka; “NPHD”) will implement a global organizational realignment of automotive coatings operations on January 1, 2021. Under the new operating structure, Nippon Paint Automotive Coatings Co., Ltd. (“NPAC”), our Group company, will serve as the headquarters of the automotive coatings business worldwide. There will be no change to the corporate name and capital relationship following the realignment.

Through this realignment, we will quickly realize the benefits of the integration of operations following the acquisition of 100% ownership of Asian JVs and the Indonesia business, announced on August 21, 2020, aiming to strengthen our automotive coatings operations worldwide. The automotive coatings business in Japan, the automotive coatings operations of NIPSEA Group, and the automotive coatings operations in Europe and the Americas will be consolidated with NPAC serving as the global headquarters. To function as a one-stop source of information and services for customers, the new company will have customer account managers who operate multinationally as well as global sales and R&D structures. In addition, we will strengthen our ability to respond to business model innovation in the automobile industry, such as the CASE (Connected, Autonomous, Shared, and Electric) concept.

Masaaki Tanaka, Chairman, President & CEO of NPHD, will serve concurrently as Chairman & CEO of the new company. Shoichi Mure, Representative Director and President of the current Nippon Paint Automotive Coatings Co., Ltd., will be President & COO of the new company.

Comment by Masaaki Tanaka, Chairman, President & CEO of Nippon Paint Holdings:
”This realignment of our automotive coatings business will be the first step in our efforts for creating synergies following the acquisition of 100% ownership of Asian JVs and the Indonesia business, which we recently announced. NPAC will be the world’s third largest automotive coatings manufacturer with net sales exceeding approx. 150 billion yen※[1] and 5,800 employees. Its aim is to integrate our management resources that have been spread out geographically and build a robust global structure, centered on sales and R&D, capable of responding quickly to customer needs. We will aggressively invest in production capacity expansion and improving the efficiency of our automotive coatings plants in Japan. We will also invest in technological innovation to provide comprehensive support to customers involving the supply and sales of products. Furthermore, we will establish an operating structure in Europe and the Americas capable of meeting customers’ requests to further strengthen our automotive coatings business in order to carry out management initiatives.”

※[1] Figure obtained by adding net sales of automotive coatings and motorcycle coatings in P.T.Nipsea (Indonesia) to NPHD Group’s net sales of automotive coatings in FY2019

[Background of the realignment]

NPHD Group operates its automotive coatings business mainly through Nippon Paint Automotive Coatings, which is a wholly-owned subsidiary, and subsidiaries of NIPSEA Group, which operates NPHD Group’s Asia business. We currently use a regional structure for our automotive coatings business in which operations in Japan, Asia, North America, Europe and other areas serve customers in their respective regions. In Asian countries, the subsidiaries of Nippon Paint Automotive Coatings and NIPSEA have been used as the points of contact for customers. As a result, there is a need to establish a global framework, including the allocation of people and the organizational design, in order to improve productivity and efficiency from the standpoint of the overall optimization of operations. The acquisition of 100% ownership of Asian JVs and the Indonesia business, which we announced on August 21, 2020, will simplify the ownership structure within the NPHD Group and allow us to globally integrate our automotive coatings operations.

1． NPAC’s organizational structure

2．Ownership structure of Nippon Paint Holdings Co., Ltd.

[Key changes]

1. Strengthen collaboration with our customers

Appoint Global Key Account Managers (GKAM)
NPAC will appoint GKAMs to clarify responsibility for serving each customer and create a single customer contact and appoint Local Key Account Managers (LKAM) worldwide. These managers will play a central role in the use of collaboration on a global scale in order to provide products and services that even more accurately meet the requirements of every customer along with one-stop convenience.

Globalize R&D and product development activities and respond to technological innovation
To reinforce our global R&D structure, we will set up core R&D and innovation departments CASE (Connected, Autonomous, Shared, and Electric) and other new technologies. This will enable us to target opportunities created by changes in the global business environment surrounding the auto manufacturing in a timely manner. We will also provide new value to customers and end users. Another goal is to speed up the development of automotive coatings and coating technologies that contribute to resolving environmental and social issues.

2. Establish a global organization

Strengthen the NPHD Group head office function
NPAC will be established in the city of Hirakata in Osaka as the headquarters that controls the Group’s automotive coatings companies (53 companies). In addition, NPAC will have personnel at NPHD Group’s Global Head Office in Tokyo in order to utilize the expertise of overseas partner companies and further strengthen the integrated management of global operations.

3. Increase efficiency through the consolidation of overseas affiliates

Consolidate Asian subsidiaries (from January 2021)
The automotive coatings subsidiaries of Nippon Paint Automotive Coatings and NIPSEA in Asia will be consolidated in each region, one by one.

Consolidate subsidiaries in Europe and the Americas
We will promote the integration of the functions of subsidiaries in Europe and the Americas to streamline operations.

Media contact: Nippon Paint Holdings Co., Ltd.
Email: nphd-kouho@nipponpaint.jp