Chairman’s statement

Dear stakeholder,

Companies have to understand the new fundamentals of today’s markets and changing customer needs. These include a growing scarcity of raw materials, fossil fuels and fresh water resources; rising energy prices; the economics of CO2 emissions; and the international debate on supply chain responsibility and social standards. This combination will increasingly impact market propositions and profit and loss accounts.

Our capability to deliver sustainable solutions to our customers is crucial for the success of our company. We transformed our sustainability roadmap last year in such a way that our businesses are increasingly integrating it into their day-to-day operations. Our businesses are well equipped to help our clients to be successful in their markets and in dealing with their own sustainability challenges.

Dialog and transparency

We will intensify our dialog with the financial community as we recognize its importance for them in assessing Akzo Nobel’s overall sustainability. We have adapted the structure of this report in order to better service our shareholders, financial analysts and the broader financial community. We aim to clarify what we are doing and are going to do on sustainability, how we measure performance and how you can evaluate our progress over the coming year.

Transformation and integration

2007 has been a year of incredible transformation for Akzo Nobel. The sale of Organon BioSciences to Schering-Plough and the acquisition of ICI are the culmination of our endeavor to create a leading global industrial player with a strong presence on all continents and well developed access to fast-growing markets. Currently we are assessing the best practices of ICI and exchanging views on how to best integrate them into our standards. While we progress as planned with our sustainability roadmap, we intend to make very significant progress in integrating the two companies within the first year. Successful integrations of such large organizations are complex and time consuming. Typically, full integration takes two to three years to complete.

We believe our newly transformed company will accelerate organic growth and further improve profitability through operational excellence. Our extended global presence and innovative business solutions, products, technologies and expertise will help our customers to be even more successful. For our employees the combination will enhance opportunities for ongoing development and personal growth. Our employees will be challenged and rewarded to develop sustainable solutions and to contribute to innovation. We will unlock new economic value for our shareholders, reaping the benefits of a successful combination of sustainable solutions and efficient operations. And for our environment and the communities in which we operate, it means being able to make an even greater contribution to a more sustainable world.

Global leadership

It is our conviction that the market system has the potential to accelerate the process towards a more sustainable society. We want to demonstrate our leadership in this field by the way we perform. Why am I confident about our ability to deliver? The answer lies in the quality of the Akzo Nobel workforce. I’m extremely proud to be part of a group of now more than 60,000 colleagues, both in the work place and throughout the management levels, that shows a tremendous commitment. For all of us, our ranking as the Chemicals industry leader on the prestigious Dow Jones Sustainability World Indexes (DJSI) is a stimulus.

Defining the future is not something one does in isolation. Our future is one with yours. We are looking forward to continuing our relationship with you and to finding the best ways of integrating sustainability into our business operations to the mutual benefit of society at large and our company.

Hans Wijers

Chairman of the Board of Management