7 BOARD OF DIRECTORS 2014 was also an important year for Jotun’s Hull Performance Solutions, an innovative concept that includes next-generation silyl methacrelate antifoulings, superior service and the tools to monitor hull performance over time. HPS has been applied to more than 150 vessels since its launch in 2011 and has helped lift sales of other Jotun antifouling products. Jotun has also expanded its market share in other specialised coatings. Jotun is now a recognised player in the tank coatings market and has expanded its business in the megayacht and leisure boat market. While 2014 was a challenging year for the organisation, Jotun continues to invest in new sub-segments, products and concepts, confident that the action taken now will place the company in a stronger position when the newbuilding market improves. Jotun Powder Coatings Powder coatings are increasingly recognised as a more environmentally friendly alternative to industrial liquid paints because they are solvent free and do not contain VOCs. As a result, many coatings analysts expect the growth rate in the Powder segment to outpace other segments in the paints and coatings industry. Jotun has organised its business in the Powder Coatings segment into five concepts: Appliances, Furniture, Building Components, Pipelines and General Industries. In 2014, Jotun took decisive action to position the company to meet rising global demand and improve the segment’s growth rate by focusing on product development to help differentiate Jotun from both multinational competitors and local, low-cost suppliers in different concepts. For example, Jotun introduced Ultra Shine, a sustainable alternative to the chrome plating process for the Furniture concept, and has expanded the Guard Endure product line to meet higher, more stringent industry standards for scratch and marring resistance. Other new products for other concepts were launched to help users improve sustainability, efficiency, and reduce costs. Most sales of Jotun powder coatings occur locally, but an increasingly large portion of Jotun’s business is with global manufacturers of consumer goods, automotive components and internationally-specified real estate construction and pipeline projects. To capture a greater share of this project market, Jotun has assigned Key Account Managers to oversee Jotun’s relationships with these global companies and build relationships with global specifiers. Looking ahead, rising global demand for powder coatings, together with a focus on product development, is likely to generate growth for Jotun in this segment. 4. RESEARCH AND DEVELOPMENT Jotun’s R&D function is made up of about 300 skilled personnel active in all four segments. Headquartered in Sandefjord, Norway, Jotun R&D has a global network of regional laboratories in the Middle East (UAE and India), South-East Asia (Malaysia and Thailand), Northern Asia (South Korea and China), and the Americas (USA). In addition to adapting products to meet local demand or customising paint solutions to meet project specifications, the regional laboratories are also responsible for testing of raw materials and providing claims and verification services when required. Over the past five years, public sensitivity to environmental and health issues has resulted in growing consumer demand for healthier, more environmentally friendly paints and coatings. At the same time, new and pending regulations limiting the use of solvents and other potentially harmful substances have and will continue to influence purchasing decisions among owners, contractors and engineers active in a broad range of industrial segments. As such, Jotun’s R&D department plays a critical role in supporting the company’s business and environmental objectives. In 2014, Jotun R&D has moved quickly to meet these global trends in all segments and countries. In the Decorative Paints segment, the company continues to develop waterborne exterior and interior paints and customise some products to meet local regulations. Jotun also customises products to help developers comply with voluntary LEED and BREEAM building standards. In the Protective and Marine segments, Jotun launched a number of waterborne topcoats, primers and steel protection products, and worked closely with key customers to develop products to meet environmental specifications unique to specific projects. While powder coatings do not have solvents, Jotun has developed a number of products that cure at lower temperatures, helping customers reduce energy costs and corresponding emissions. In the Marine segment, Jotun’s evolving line of antifoulings help vessel decrease speed loss over time, which reduces fuel usage and results in less emissions to air. In 2014, Jotun launched a number of programmes to increase the pace and quality of product development. The Board approved plans to invest in new binder technologies (alkyd emulsions) and Jotun launched a web-based tool that will support innovation, research, development and product management processes. By continuously developing quality products Jotun is in a strong position to meet evolving market demand and help users improve environmental performance. 5. COMPETENCE DEVELOPMENT Jotun invests significant resources in continually developing the skills of our employees. In 2014, Jotun focused on driving lasting changes in behaviour, improving competence and exploring new trends in skills training. In addition to on-the-job training, Jotun provides a big part of its competence development programmes through Jotun Academy. The academy includes training programmes in human resources, marketing, sales, purchasing, R&D, operations, technical sales support, finance, and management, as well as a number of stand-alone modules. In 2014, Jotun also piloted the Customer Service Academy, which aims to differentiate Jotun through market-leading service, thus covering the entire sales process. During the reporting year, Academy trainers instructed around 2 200 employees in over 150 Jotun Academy training programmes around the world. In addition, Jotun launched a new e-learning portal that has more than 170 e-learning courses and nearly 7 600 users. Jotun’s Competence Board is responsible for developing and disseminating new training initiatives throughout the company, including Academy programmes. This board has
Jotun Annual Report 2014
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