Axalta’s sustainable manufacturing practices provide our customers with superior products using carefully selected materials that are processed to optimize productivity while minimizing our impact on the environment and protecting the health and safety of our employees and surrounding communities.

During 2016 and 2017, we reviewed and enhanced the underlying policies and certifications that are designed to ensure our manufacturing systems function together to achieve our EHS goals. The cornerstone of our effort was a revision of our global Environment, Health and Safety (EHS) Policy. The new policy provides clear and actionable definitions of our EHS obligations and commitments to control risk and assure regulatory compliance. In addition, we have improved performance across a variety of sustainable manufacturing metrics, reviewed and developed an approach to strengthen our product stewardship efforts and enhanced our supply chain and logistics initiatives.

EHS Policy and Certification

Axalta’s EHS policy is strategically aligned with the American Chemistry Council’s (ACC) Responsible Care® 14001 Guiding Principles. Following a six-month third-party audit by QSR, in December 2017 we achieved global multi-site certification to the recently issued ACC RC14001:2015 standard. We are also compliant with the ISO 14001:2015 standard. Certification requires demonstration that all elements of the Responsible Care Management System are successfully implemented globally at Axalta, including process safety, product safety and security.

Our ongoing internal audit process reflects our EHS Policy and the requirements of RC14001:2015, providing governance to ensure compliance with all applicable regulatory requirements and Axalta standards. The audit process allows us to further identify opportunities to improve risk controls and adherence to all our EHS management systems requirements. Our review process is premised on a regulatory applicability analysis and is designed to provide a robust compliance assurance process at every site, with transparent metrics to continuously improve the efficacy of our standards.

Goal

Within the first three months of an acquisition, complete an EHS compliance audit and a plan to enable the facility to achieve RC14001 certification within 18 months of the close.

Expecting that acquisitions will continue to complement our organic growth and an evaluation of target company EHS related policies, procedures and compliance systems are part of our assessment of potential acquisitions. We commit the necessary resources to ensure that acquired companies are able to comply with all applicable regulatory requirements and Axalta EHS obligations.

Productivity is an important objective at all Axalta manufacturing locations. We maintain a high regard for both safety and quality, establishing clear quality targets and reducing the potential for process failures. To sustain continuous production, operations professionals work closely with Technology, Procurement and Process Engineering experts to select the best raw materials and optimize process capability to meet our customers’ expectations and maintain production schedules and on-time delivery.

Emergency Response Planning

Axalta’s emergency response procedures set forth how we understand, control and manage risk associated with emergencies and other incidents that can have an impact on our employees, our communities and the environment. Each Axalta facility is responsible for adapting the principles of the corporate standard to a facility-based Emergency Response Plan and ensuring necessary resources and training are provided, assuring our personnel are prepared and capable to respond. The plans address hazard identification, best practices for managing an incident, internal and external communications processes, training and opportunities to periodically evaluate and refresh plans. Axalta’s corporate Emergency Response Plan is fully aligned with the requirements of RC14001.

Production Localization Strategy

Axalta to build new coating manufacturing and logistics facility in Nanjing, China
Axalta to build new coating manufacturing and logistics facility in Nanjing, China

Axalta continues to invest in increasing local production capacity. Our largest initiative, announced in 2016, is the construction of a new operations center in Nanjing, China. Expected to begin production in 2022, the new center will enable us to meet the growing demands of the expanding automotive industry in south and central China. It will also serve the vehicle repair sector, which trails the sales of new vehicles and industrial customers engaged in infrastructure development. We will continue to evaluate our footprint to create a hub and spoke model that shortens the transportation time to customers. One move related to this initiative was the closure of our Toledo, Ohio site where we consolidated manufacturing closer to the point of final consumption.

Production localization provides commercial and sustainability benefits. Shorter distances to customers reduce costs associated with shipping and related energy costs and emissions associated with air and sea freight. The ability to consolidate production in locations closer to our customers facilitates production of right-sized batches and the optimization of financial and human capital that comes with economies of scale. Local production also enables quick production and delivery of smaller product batches or adjustments to products requested from nearby customers.

Product Quality

Manufacturing plant tank tops in India
Coatings production at Axalta’s operations center in Savli, India

Axalta introduced our Right First Time initiative in 2016, to improve product quality and optimize our use of resources, from materials and manufacturing capacity to the human efforts that are a vital part of production. Every Axalta manufacturing site now has cross functional teams—an embedded part of our quality culture—that work towards our Right First Time goal for all manufactured products. The Right First Time mindset drives desired behaviors within our current manufacturing organizations and in the ways we innovate new manufacturing processes. The results will reduce waste, create better manufacturing productivity and provide high quality products for our customers.

Certifications

Adherence to common quality standards remains a key component of our commitment to quality. Many of our manufacturing sites have achieved ISO 9001 quality management systems certification and are currently transitioning to the newer ISO 9001:2015 standard. Sites supplying automotive original equipment manufacturers also have TS-16949 certification, established by the International Automotive Task Force. These manufacturing sites are transitioning to the new IATF 16949 updated standard during 2018.

In addition to the requirements of our Right First Time initiative and ISO standards, we monitor manufacturing processes and product characteristics that are important to each of our customers’ product and application needs, from raw materials to ensuring on time delivery. Our operations teams follow additional operational excellence systems that set quality goals and apply disciplines that in many cases exceed those set by the quality standards.

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