12 OUR BUSINESS MARINE COATINGS SAILING THROUGH TROUBLED WATERS As the shipping industry continues to experience challenging times, Jotun remains focused on delivering solutions to owners operating in the new market reality. While Jotun recorded a modest decline in sales in 2016 compared to last year, the company continued to gain market share in the Marine Coatings segment. This growth was mainly driven by strong performance in China and South Korea, where the company performed well, completing newbuilding projects ordered in 2014 and 2015. However, with freight rates near historic lows, newbuilding activity has slowed dramatically, which will impact Jotun’s business in this segment going forward. Jotun is now working to achieve growth in the DryDock and SeaStock concepts. A CHANGING INDUSTRY These uncertain market conditions have resulted in structural changes in the industry, creating fewer, larger players. Jotun is working to secure multi-vessel block tenders, bundling products, services and technical support with companies operating large fleets. And to help owners operate successfully in this new market reality, Jotun offers a number of products and solutions. In 2016, Jotun secured about 150 Hull Performance Solutions contracts, helping owners reduce fuel costs and corresponding emissions and began pilot testing a new premium sylil methacrylate antifouling. In addition, Jotun welcomed the publication of ISO 19030, a new standard conceived to measure JOTUN MARINE COATINGS 6+4% 6% AM SCA 17% WE 7% 49+12+M 4+17+5+7+SALES IN BILLION NOK 2016 2015 2014 EECA 5% 2013 MEIA 2012 12% SEAP 0 1 2 3 4 5 6 7 49% NEA SALES PER REGION changes in ship-specific hull and propeller performance, which Jotun uses as the basis for the company’s High Performance Guarantee. In the DryDock concept, Jotun is focused on strengthening relationships with existing customers to secure scheduled maintenance contracts. HELPING OWNERS REDUCE WASTE With an increased focus on cutting costs, many owners are delaying on-board maintenance to save money, impacting Jotun’s SeaStock concept. However, the company has found success with Jotun’s Smartpack Solutions, an easy-to-use two pack system for brush and roller, which reduces waste. Better utlilisation of the paint is helping owners to save cost on maintenance. Jotun also continues to gain market share in the specialised tankcoatings segment and has upgraded existing products, including Tankguard HB Classic, and the new Tankguard Special, developed to give Jotun a competitive edge in the newbuilding market. Looking ahead, the company does not expect signs of recovery to emerge until 2018. However, it should be noted that Jotun has been active in the maritime industry for 90 years, and has the products, competence and experience to succeed longterm in any market.
Jotun Group Report 2016
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