7 BOARD OF DIRECTORS Looking ahead, the company does not expect signs of recovery in the merchant marine market to emerge until 2018. However, by adapting quickly to the new market reality, the company will be in a strong position when industry players begin to order new vessels. JOTUN POWDER COATINGS The Board was encouraged by developments within the Powder Coatings segment, which achieved sales growth in all regions except for the Middle East, where the business was impacted by an economic slowdown in Saudi Arabia. Growth was particularly strong in the Czech Republic, UAE, India, Pakistan, Vietnam, Indonesia, China and Turkey, despite uncertain political and economic conditions. Jotun exceeded expectations in the General Industries concept, supplying powder coatings to light industrial manufacturers of electrical switchgear, shelving, interior lighting and automotive components like alloy wheels and coiled springs. Jotun also found success in supplying the Building Components concept, while sales in the Pipeline concept were down, mostly due to the slowdown in the oil and gas industry. Jotun also supplies to both local and multinational furniture and appliance manufacturers. While Jotun has a relatively modest share in these market segments, the Board is encouraged by steps taken to generate faster growth. Jotun has won the confidence of some of the world’s leading manufacturers of appliances and furniture, and continues to develop products that can be used to coat wood substrates. And to increase sales penetration in geographically larger countries (e.g. China, Russia, India, Turkey), Jotun launched an initiative to expand its dealer and distributor network. 4. RESEARCH AND DEVELOPMENT (R&D) 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), Eastern Europe (Turkey) and the Americas (USA). In addition to adapting products to meet local regulations and demand, regional laboratories are also responsible for testing of raw materials, quality assurance, and providing claims and verification services when required. Jotun’s R&D function plays a critical role for the company. In addition to being responsible for meeting the growing demand for healthier, more environmentally friendly paints and coatings, and responding to new or pending regulations, Jotun’s R&D personnel must also support the company’s own business and environmental objectives. Innovation remains a critical focus area for Jotun. In 2016, Jotun R&D successfully completed a five-year binder technology project to develop the capacity to produce its own alkyd emulsions – a key building block in many paints and coatings. Jotun also announced the construction of a new passive fire protection laboratory in the UK, complete with two testing furnaces, scheduled to begin operations in early 2017. To help the company retain its edge in product development, Jotun welcomed the start of construction of a new headquarters and R&D centre in Sandefjord, Norway. The new R&D centre will feature state of the art equipment and enough lab and office space for 350 chemists and related personnel. Jotun is confident that the new R&D centre will not only help strengthen the company’s reputation as an industry pioneer, but attract and recruit top talent to develop next-generation products. 5. COMPETENCE DEVELOPMENT Every year, Jotun invests significant resources to recruit, train and develop our personnel. In addition to on-the-job training, Jotun provides a broad range of competence development programmes through Jotun Academy. The Academy includes training programmes in human resources, marketing, sales, purchasing, R&D, operations, technical sales support, customer service, finance, and management, as well as a number of stand-alone modules. Jotun’s Competence Board is responsible for securing a focus on competence development in all of Jotun’s business activities. The Board approves new global competence development initiatives. In 2016, over 2500 employees participated in 38 Jotun Academy training programmes, around the world. In addition, 212 online courses are available to employees through Jotun’s e-learning portal, a virtual training environment that connects the entire global organisation. Jotun added three new Academy training courses in 2016, 25 new e-learning modules and over 60 nano learning lessons. Through recruiting and training, Jotun continues to invest in the company’s leadership pipeline. In 2016, Jotun formalised requirements for high-level management positions, and increased regional accessibility and accountability for rotation and mobility, among other activities. Jotun’s ability to attract competent candidates, combined with the company’s low turnover rate, represents a competitive advantage and helps secure the company’s future. 6. HEALTH, SAFETY AND THE ENVIRONMENT (HSE) GOALS AND ACTIVITIES All of Jotun’s activities are carried out in accordance with local laws and regulations, and Jotun HSE requirements. Systems and training programmes have been implemented to prevent occupational illness, promote good physical and psychological well-being, safeguard life and property, and reduce Jotun’s environmental footprint. Jotun Group, including our production companies, is certified according to ISO 9001, 14001 and OHSAS 18001. In 2016, Group HSEQ carried out 13 audits of Jotun’s production facilities. The year was also notable for the roll out of the HSEQ Management System, which divides the HSEQ responsibility across the local management organisation, allowing for more individual focus on key elements and making standards easier to manage. TRAINING Competence development is critical for Jotun to achieve HSE objectives and build a culture of effective health and safety
Jotun Annual Report 2016
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