4 BOARD OF DIRECTORS CHAIRMAN OF THE BOARD, ODD GLEDITSCH D.Y. MORE WORK TO BE DONE Jotun has enjoyed uninterrupted growth for more than a decade, a trend that continued in 2016. However, slow growth in some segments has encouraged an increased focus on efficiency. Board of Directors, from left: Birger Amundsen, Terje Andersen, Ingrid Luberth, Einar Abrahamsen, Richard Arnesen, Odd Gleditsch d.y. (Chairman), Karl Otto Tveter and Nicolai A. Eger. While Jotun’s overall growth in 2016 was slower than the previous year, the company recorded satisfactory results. Indeed, when considering the macro-economic trends that impacted the sale of marine and protective coatings (and other segments in regions experiencing political unrest), Jotun’s positive growth represents a genuine achievement. Growth in the Decorative Paints segment was especially strong and the Board is pleased with developments in the Powder Coatings segment. PRODUCT INTEGRITY Jotun’s regional and segment diversity has helped the company weather events beyond our control. For example, despite strong sales in Egypt, Jotun experienced significant losses due to the currency crisis. In other markets, Jotun’s profitability was impacted by the performance of customers struggling in depressed markets. However, in some areas where the company does have control, there is more work to be done. Despite Jotun’s excellent record over the years, 2016 saw an increase in product integrity and quality issues on some projects, which impacted overall profitability. The Board is satisfied with the company’s rapid response to manage these issues and confident that systems put in place to prevent these errors in the future will make 2016 the exception, not the rule. Meanwhile, Jotun continues a bold investment programme, adding production and warehouse capacity throughout the network. Jotun also began construction of a new headquarters and R&D centre in Sandefjord. Over the past five years, the Board has approved a broad range of investments in systems and tools to support improved project execution and operational and administrative efficiency. While these (and other) investments have resulted in an unwelcome rise in costs, these are in line with expectations. FOCUS ON SAFETY AND THE ENVIRONMENT Jotun’s rapid growth will challenge the Group in other ways, too. The company recognises that more factories represent more risk to the environment. Furthermore, Jotun is likely to reach a critical milestone – 10 000 workers in 2017. The Board recognises its responsibility to ensure safe and healthy work places for our growing organisation and limit the impact of our growing size on the environment. While the Board will maintain its support for Jotun’s ambitious growth strategy, these health, safety and environmental issues will continue to be a priority focus area going forward.
Jotun Annual Report 2016
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