Welcome to Morgan StanleyShanghai, 27 September 2010

• China at a glance

• AkzoNobel in China

• Q2 2010 highlights

• Decorative Paint

• Performance Coating

• Specialty Chemicals

• Outlook

Agenda

2

Economic forecast up to 2020

• China will maintain its position as the world’s second

largest economy in 2020, with a GDP of 21 trillion USD.

GDP per capita will quadruple in comparison to 2000,

rising to 15,600 USD at market exchange rates.

• During the first half of the next decade, China will suffer

from the after-effects of its massive stimulus package.

• China’s export-orientated economy up to around 2015 is

likely to be affected by continuing financial turbulence in

its biggest overseas developed country markets

• Whilst China will have one of the largest and most

closely watched consumer markets,

• Expect coastal provinces to move up the value chain,

concentrating on service industries, as manufacturing

companies relocate inland.

3

We expect economic structure to be more similar to developed countries by 2020

0

2,000

4,000

6,000

8,000

10,000

Real GDP

(Bn USD)

Private

consumption

Gross

investment

Government

consumption

Net exports8,017

47%

36%

5,782

37%

46%

3,793

35%

46%2,303

38%

43%1,458

44%

37%

2000 2005 2010 2015 2020

1. In constant 2005 USD termsNote: Gross investment includes both government Fixed Asset Investments and private investmentsSource: EIU, OECD, BCG analysis

4

China market evolving rapidly as economy grows

20082009 2020

Cities / counties with 100,000 or more middle class and

affluent consumers Number of cities

2010

2015

2020

247

576

851

Source: BCG proprietary China Income Forecast Database

5

Middle

Market

Low-end

The challenges in the Middle Market

Typical focus of local

competitors

• Low cost “local” value

propositions, low-end

technology, and business

models

Intense battle between

global companies moving

down and local companies

moving up

Top

Segment

6

Typical MNC entry point

• “Global” value

propositions, technology,

and business models

7

Strong high-growth markets potential

Source: Food & Agriculture Organization of the UN, 2005 data for paper and paperboard; Plastic Europe Market

Research Group (PEMRG) 2005 plastics data; Euromonitor 2007 coatings data; WorldBank population data

Paper

Plastics

Industrial and

Special Purpose

Coatings

Architectural

Paint

High-growth

Per Capita

Mature

Per Capita

8 liters

13 liters

< 2 liters

< 6 liters

~100 kg ~20 kg

~25 kg~170 kg

• China glance

• AkzoNobel in China

• Strategic ambitions and action plans

• Q2 2010 highlights

• Decorative Paint

• Performances Coating

• Specialty Chemicals

• Outlook

Agenda

8

99

AkzoNobel in China

Performance Coatings

• AkzoNobel is the largest paint and coatings company in China

• 14 Production sites in China

• Activities: West to East gas pipeline ,Shanghai International Airport, Beijing 2008 Olympic Swimming Center, National Indoor Stadium,Qingdao International Sailing Center, Beijing Olympic Convention Centre

Decorative Paints

• AkzoNobel is the fastest growing decorative paints company in China

• 3 Production sites in China

• Well-known “Dulux” brand owned by AkzoNobel is one of the leading brands in decorative paints

Specialty Chemicals

• 6 Manufacturing sites in China

• Multi-site in Ningbo (€275 mln investment)

• Inauguration Industrial Chemicals site Taxiing, April 8

China GDP vs AkzoNobel Growth

The numbers are not adjusted for ex rate changes over the years 10

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2012 2015

AkzoNobel Development vs Chinese GDP

AkzoNobel

GDP

AkzoNobel take

over of ICI

1.5 Bn US$

M&PC and

Wood l

New Vision

3Bn US$

Some

250 mill

US$

11

AkzoNobel key facts

2009

• Revenue €1.044 billion (€1.054 billion in 20080

• 6.300 employees

• EBIT: €163 million (€144 million in 2008)

Revenue by business area

32%

35%

33% 32%

27%

41%

27%

48%

25%

Revenue 2009

Decorative Paint

Performances Coating

Speciality Chemical

2010

•We forecast a growth well above the GDP for the year

keeping us on course for the 2015 target

AkzoNobel in China

Decorative Paints

Performance Coatings

Specialty Chemicals

Guangzhou, Dongguan 广州，东莞

Suzhou

苏州

Shanghai 上海

Langfang

廊坊

Beijing 北京

Shenzhen 深圳

Ningbo

宁波Jiaxing

嘉兴

Tianjin 天津

Chengdu 成都

Taixing 泰兴

12

Plants and Warehouses Mapping

Harbin:

Warehouse for Deco

Sheng Yang

1 OEM plant

3 warehouses

BJTJLF:

4 AN Plant

1 OEM plant

7 warehouses

Ji Nan warehouse for

Functional chemicals

Yan Tai warehouse for

Powder coating

Ning Bo

5 plants for multi BUs ,

1 warehouse

SHSZJS:

10 AN plants

3 OEM Plants

14 Warehouse

YZTX

2 AN plant, 3OEM Plant, 2

warehouse

Wu Han

1 AN plant

2 warehouses

GZDGSZ

5 AN plants

2 OEM Plant

9 warehouses

Wu Lu Mu Qi

Warehouse for Deco

Xi An

1 OEM plant for Deco

Warehouse for Deco,

Cheng Du

1 AN plant

1 OEM plant

2 warehouses

Chong Qing

Warehouse for Functional

Chemicals

Kun Ming

Warehouse for Deco

Yin Chuan

Warehouse for PC

NDG DG Total: 28 AN plants, 12 OEM plants, 48 delivery warehouses( if two location for one company/BU it counts only one) 13

• China glance

• AkzoNobel in China

• Q2 2010 highlights

• Decorative Paint

• Performances Coating

• Specialty Chemicals

• Outlook

Agenda

14

15

Highlights in China 2010

15

• We expanded our MCA factory to 60,000 Tons in Taxing

• We started Chelates production in Ningbo (new multi-

site)

• We established a R&D Center for Powder Coatings in

Ningbo

• Science Award to China partnering with Chinese

Chemical Society in July

• We announced the New China Target in July

• Car Refinish acquired Prime in September

• We continue to invest to build the Ningbo project

Polymer investment some 25Mill Euro in July

• We will official open Ningbo 8 November

1616

Decorative Paints

17

Decorative Paints China

• Established in 1990, first JV with Swire Pacific

• 3 Factories and 7 Regional Sales clusters, +1,300

employees

• Key Player in Decorative Paint Market

• Channel: Traditional Trade, Modern Trade & Project

• Consumers: BIY, DIY, HID

• Category: Emulsion, Woodcare, HPC & Pre-Deco

• Major Competitor: Nippon

• Our Mission: we bring color to peoples lives

18

• 10 years consecutive growth at over 3X market pace.

• Highly profitable. Negative operating working capital.

• Superior DULUX brand innovating Super Premium to

Mid Tier.

• Expansive Controlled Distribution model covering Tier1

to Tier 3 cities;

• Traditional, Modern, Projects channels.

• Managed by a highly capable team accustomed to

“winning”.

• Business Conduct/Control/SSHE standards and

performance are high.

Decorative Paints China

19

Our Brands

• DULUX is the flagship emulsion and woodcare brand both in retail (Dulux) and project channel (Dulux Pro)

• MAXILITE is a economical emulsion brand

• LEVIS is the key retail brand of both emulsion and woodcare focus on professional customers

20

Geographic Presence

• 3 Factories

• Shanghai

• Guangzhou

• Lang Fang

• 7 Clusters

• East – Shanghai

• South – Guangzhou

• West – Chengdu

• North – Beijing

• Central – Wuhan

• NorthEast – Shenyang

• NorthWest – Xian

21

Our Business Portfolio

Traditional TradeModern Trade

Professional

Project

Channel

Our business is retail

focus with majority

business contributed by

Traditional Trade,

particular the Dulux

Control stores.

Premium

Mid-Tier

Low-End

Woodcare &

Others

Products

We have a balanced

product portfolio to

meet difference

customer’s need with

focus on Premium

segment.

Tier 1

Tier 2

Tier 3

Geographic

We have covered +600

cities in China, focus on all

T1, T2 and big T3 cities.

22

Accelerated Control Store ExpansionSome Key Initiatives

• For end consumers,

DDCN (Dulux

Decorative Centre

Network) is a trusted

place to experience

Dulux brand

promises through

simplified paint

purchase process,

decoration

inspiration,

simplified color

decisions and post

sales services

Store positioning:• Store design follows the consumer shopping

route of Inspiration, Visualization, Selection,

Service

Visualization

Service

Selection

Inspiration

Double the number of our Dulux Control Stores in 5 Years

23

Existing DDCN store format

24

New DDCN design will be deployed in H2 of 2010

Initiated the new store

design in 2010 to:

• Strengthen color

leadership

• Inspire consumers

for decoration

• Be more interactive

with consumers and

enhance conversion

rate

• Better integrate

emulsion and

woodcare

• Be flexible to handle

real store situations

25

Easy Paint Service Some Key Initiatives

Differentiate

service

content

• Create new business opportunities by speeding up the

repainting cycle

• Value-added and differentiated service offering incl:

- Aesthetic finish eg. Wall drawing

- Color consultant service

- Air quality check service

Performance Coatings

26

2727

Performance Coatings 2010

• Marine and Protective coatings are expected to have a

tougher year in 2010 following many years of high growth

• Wood Coating and Adhesive are back to a growth pattern

after the collapse of the US housing market (export

furniture) and are making some inroad to the local market

• Industrial Coating are having good growth in packaging

and other segment

• Car refinishing will have a very good and busy year with

the latest acquisition

• Powder will also have a good year

* Industrial finishes have been reorganized to Coil and Extrusion Coatings, Specialty Plastic

Coatings and Packaging Coatings.

Functional Chemicals

28

2929

Specialty Chemicals 2010

• Industrial Chemical is active in our MCA business set to have

a very good year

• Functional Chemical is also looking out to a very good year

and the milestone in the Ningbo opening. This is their key site

• Pulp and Paper is also set for a good year (special

presentation) and are adding new capacity in GZ

• Surfaces Chemistry have recovered from some early supply

issues and are on market for growth in 2010

Pulp & Paper Chemicals

Eka Chemicals

Ross Howat – 27/9/2010

31

Eka is a very strong brand in the global

pulp and paper industry

Biggest brands, per business area - % of 2009 revenue

18% of Specialty Chemicals

23% of Performance Coatings

25% of Decorative Paints

• China is No.1 paper global producer – overtook US in 2009

• 2010 China paper capacity – 86million tpa

• Apparent consumption – 66kg/person/year

31

32

Eka in pulp and paper

Coating

AZC

Rheology

modifiers

Defoamer

Coating

Wet & dry

strength

High filler

Paper machine

Water treatment

Colloidal

silica

Polymers

Starch

Purate® microbiological control

Polyaluminum chlorides

AKD

Rosin size

ASA

Surface size

Retention Sizing StrengthFunction

Products

Application Pulp manufacturing

Sodium chlorate

Chlorine dioxide

Hydrogen peroxide

Sodium hydroxide

Emulsions

Soaps

Bleaching Deinking

Pulp

Recycled fiber

32

Wet-end

• Compozil retention/drainage

• Sizing

• Dry/dry strength high filler

• Purate biocide

• Defoamer

Press section Coating

• Cross linking

• Rheology modifiers

• Defoamer

Dewatering

Water treatment

Dryer section

• Surface sizing

The paper machine

33

Eka in China

Eka Chemicals (Suzhou) Co. Ltd

Located in Suzhou Industrial Park (SIP)

Started operations in 1999

98 fulltime employees:

Production capability; Eka CR/DR, EkaAZC, Purate & Expancel

R&D & technical service labs

Eka Chemicals (Guangzhou) Co. Ltd

Located in Guangzhou Economic Technology Development District (GETDD)

Started operations in 2006

34 fulltime employees:

Production capability; Eka CR & Eka DR

Eka NP project : 2010-2011

34

Guangzhou silica sol project update

Colloidal silica sol for Compozil system

– our core competency

Global technology leader – must protect IPR

Strategic project to meet future domestic demand &

secure regional supply needs

GZ site location critical due to proximity of future large

integrated paper mill projects

Initial capacity – 26,000tpa. Expect to double capacity

within 5yrs

1st pile driven June 13th, 2010

Target to start production March 30th

Project on-time and under budget

35

China strategy overview

- continuous customer driven innovationFocus on modern Chinese paper industry & new projects

Segment & target customers where technology fit is strongest:

Coated and uncoated fine paper – top priority

White/coated cartonboard – 2nd priority

Liner/medium – 3rd priority

Focus on our core competencies & innovative technologies with sustainable competitive advantage and/or patent protection

Priority is Compozil, Sizing, Coating & Purate sales

Establish local production positions for Eka NP in Guangzhou

Explore opportunities for local production of AKD, ASA & chlorate

Utilise world class supply chain and industrial IT – Eka VMI

Train, develop, motivate and retain our key people

36

09/03/2010 Winner of the 2009 AkzoNobel RD&I

Innovation Award announced.

BU Pulp & Paper’s Compozil Fx has pipped Decorative Paints’ Ecosure and Car

Refinishes’ HS Clearcoats to win this year’s AkzoNobel RD&I Innovation Award.

The panel, comprising Bob Taylor, Frank Sherman and Jeremy Rowe, Jenifer

Midura, Andre Veneman, and chaired by Graeme Armstrong, had a tough time in

picking an overall winner. “We were impressed by all three BA Award winners,

said Graeme, “And it was only the sustained growth of business that Compozil Fx

has achieved over the past three years that differentiated it as the overall winner.”

37

10yr outlook - target market segments

2638

17

30

25

13

23

10

0

20

40

60

80

100

120

2010 2020

Pro

du

cti

on

cap

acit

y,

mtp

a

Coated fine paper

Uncoated fine paper

White/coated board

Liner/medium

* Expect strong growth for size, retention, coating & biocide

130% growth

92% growth

76% growth

46% growth

Customer segmentationStrategic customers - A

• Already classified as BU strategic account

• Sales potential >3m€ pa in SBU or BU

• Good technology fit with our product portfolio

• Value Eka as preferred & important supplier

• Must have expansion plans for new capacity

• Acceptable payment history

APP, APRIL, UPM, Stora Enso, L&M, IP/Sun & Oji

Key

Selection

Criteria

39

APP Gold East PM3 - world’s fastest

fine paper machine runs Compozil

• Gold East - 2,300,000tpa

coated fine paper output

• Compozil Fx account

• PM3 output 800,000tpa &

1,800m/min world record speed

• Startup May 2005

• New target – 2,000m/min

• Innovation targets & projects;

Eka NP 2180

On-site G-PAM dry strength

Purate

PCC high filler system

40

UPM Changshu – success story

PM1 started up 2005 – 500,000tpa

Worlds 2nd fastest fine paper machine –

1710m/min

Took Compozil business in Jan 2009

Innovation targets & projects:

1. Purate biocide target

2. GCC high filler project update:

– Trial on offset grades in mid Oct

– Major drivers; energy & fibre savings

– Target 3-4% filler increase

41

APP Jinhai – worlds biggest paper machine

• Hainan Island – integrated pulp & paper

• 1,600,000tpa coated fine paper – Voith

• 1,800m/min design speed

• 11.7m width

• Stock on wire – April 20th 2010

• Sheet on real – May 18th 2010 at 18.18

• Other product/innovation opportunities;

Coating

GCC high filler

Dry strength

Purate

42

Eka Purate innovation & strategy

Suzhou production with local RM’s for lowest VMC

New patented ClO2 innovation

Leverage big Compozil accounts as primary targets:

– Target large fine paper machines >100ktpa

– Strong established relationships

– Detailed knowledge of customers wet end

– Cost SAR cost due to existing service cost

Strongly market – Compozil Fx/Purate synergy

Target generator fabrication in China to achieve:

– 50% cost reduction (<50keuro)

– Reduced lead times

– Fully protect IPR

– Maintain existing quality and safety

43

The world’s best paper

machines run Eka’s Compozil Fx!!

UPM Changshu PM1 APP Gold East PM3

APP Hainan PM2 Oji Nantong PM1

44

• China glance

• AkzoNobel in China

• Q2 2010 highlights

• Decorative Paint

• Performances Coating

• Specialty Chemicals

• Outlook

Agenda

45

4646

AkzoNobel values

• Focusing on our customers’ future first

• Embracing entrepreneurial thinking

• Developing the talents of our people

• The courage and curiosity to question

• Integrity and responsibility in our actions

4747

AkzoNobel Chemical Sciences Award in China

• Commitment to investing in research and in business

infrastructure we have more that 500 scientists and

technical support staff working in China

• Ambition to connect with Chinese scientist communities

and promote science advancement in China

• This new award was well received in China we had good

coverage of the event

• The Science award is in Partnership with Chinese

Chemical Society

48

Our sustainability commitment has been recognized externally

2004 No ranking

2005 Top 10%

2006 2nd Place

2007 Super sector leader

2008 Joint 2nd place

2009

2010

2nd place

Super sector leader