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Jotun Group Report 2014

16 OUR BUSINESS Expanding in a high growth segment After a slow start for Jotun in the Protective segment, the company ended 2014 on a positive note. By continuing to strengthen the organisation and develop new industry-specific solutions, the company anticipates stronger growth in 2015. Jotun sells protective coatings to multiple industries and companies active in hydrocarbon processing (refineries, gas processing plants, etc.) infrastructure (hospitals, airports, bridges, flyovers, etc.) energy (coal-fired plants, geothermal, hydropower, wind, etc.) offshore (rigs, platforms, etc.) and mining. To gain market share in this dynamic, highly diverse and competitive market requires the right product mix, personnel with experience in different industries and the ability to successfully manage complexity. Unique selling points In 2014, the segment continued to invest significant resources to develop products and coatings systems to help differentiate Jotun from competing coatings manufacturers. Launched in 2013, Jotun’s revolutionary Passive Fire Protection (PFP) coating system Jotachar JF750 has been embraced by leading offshore companies and yards, helping the company boost sales of other related coatings systems. And in response to increased public awareness of environmental issues, Jotun has developed a broad range of waterborne coatings products, including Penguard WF, Pilot WF, Steelmaster 1200 WF, among others. Jotun continues to train existing staff and recruit personnel with industry specific knowledge to help the company compete for high-value contracts. While most of Jotun’s sales in the Protective segment are generated locally, a growing share of the business involves multinational stakeholders. To capture a greater share of this market, Jotun has strengthened its International Specification Management team, who work across borders to secure contracts in cooperation with their colleagues working locally. The impact of oil prices Looking ahead, low oil prices may impact sales to offshore projects. As Jotun has already secured contracts for many projects scheduled for construction in 2015, we anticipate good results in the short term. However, if low oil prices persist, offshore projects may be delayed or cancelled, creating some uncertainty over time. However, it should be noted that low oil prices may boost long term global growth, as energy costs will fall sharply for oil importing countries in Asia and Europe and benefit many industries around the world that depend on oil. This growth is likely to spur more investment in a broad range of construction projects, which will create significant opportunities for Jotun going forward. It should also be noted that while low oil prices may impact planned projects, maintenance on existing facilities will go forward. Despite market uncertainties, the Protective Coatings segment remains a promising growth opportunity. By making the necessary adjustments to our strategy to match a changing world, Jotun is in a strong position to capture a greater share of this growing market. PROTECTIVE COATINGS JOTUN PROTECTIVE COATINGS Sales per region Sales in billion NOK 3% SCA 8% WE 13% EECA 19% MEIA 20% SEAP 35% NEA 2% AM 3% SCA 8% WE 13% EECA 19% MEIA 20% SEAP 35% NEA 2% AM 2014 2013 2012 2011 2010 0 1 2 3 4 5


Jotun Group Report 2014
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