JOTUN GROUP Despite challenges in some regions and segments, Jotun performed well in 2016 and continued to pursue its long-term growth strategy. Jotun recorded good profitability and increased total sales volume by five per cent in 2016. These positive results were helped by double-digit volume growth in the Decorative Paints segment, significant improvement in the Powder Coatings segment and favourable raw materials prices. Jotun also performed well in key regions, including the Middle East, South East Asia, East Europe and Central Asia. CHALLENGING MARKETS While underlying growth was positive, the company’s results were impacted by weak demand for marine coatings and a decline in offshore activity, which slowed growth in the Protective Coatings segment. In addition, growth in some regions was slowed by political unrest and economic turmoil in countries where Jotun has a strong presence, such as Saudi Arabia, Egypt and Turkey. Despite a slowing global economy, the company improved market share over a broad range of product categories. Jotun remains committed to achieving profitable growth. By bringing more volume through the network, the company can lower the average cost of producing a litre of paint, improving profits. Jotun continues to expand existing factories, build new SCA WE EECA MEIA SEAP NEA AM Corporate 0 500 1000 1500 2000 2500 3000 production facilities and warehouses, invest in new markets and in tools and systems to improve efficiency. In 2016, Jotun completed construction of a new factory in Oman, a distribution warehouse in Thailand, and opened a sales office in Taiwan. Jotun also began construction of new factories in Myanmar, The Philippines, Malaysia and its new headquarters and R&D centre in Sandefjord, Norway, among other projects. DURABLE BUSINESS MODEL Looking ahead, Jotun will continue to pursue an organic growth strategy that has helped the company more than double in size over the last decade. Jotun recognises that no two markets are the same, so by empowering regional personnel to make decisions closer to the markets they serve, the company can adapt quickly to local demand. At the same time, Jotun continues to be active in four segments, allowing the company to shift resources when markets change. Jotun will continue to focus on growth by improving project execution, operational efficiency and work processes, while strengthening the company’s environmental performance and Corporate Governance. The basis for Jotun’s continued expansion of the strong organisation and a corporate culture that aligns its commitment to growth. SCA WE EECA MEIA SEAP NEA AM 0 3 6 9 12 15 10 OUR BUSINESS COMMITTED TO GROWTH FULL TIME EMPLOYEES PRODUCTION FACILITIES 2016 2006
Jotun Group Report 2016
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