11
BOARD OF DIRECTORS
prefer to outsource the management of SeaStock to Jotun, for
a fixed cost. By leveraging digital tools, sensor technologies and
data analytics, Jotun can quantify results, customise services
and provide better decision support. While uncertainty in the
newbuilding market is likely to continue to impact sales short
term, the company has retained its leading market share by
responding to the evolving needs of shipowners.
POWDER COATINGS
Three key markets for Jotun’s powder coatings business were
affected in different ways in 2017; the economic downturn in
Saudi Arabia, sharp devaluation of the Egyptian currency in late
2016 and supply chain disruption in Qatar from mid-2017. At
the same time, two large scale pipeline projects in Turkey and
Pakistan, which helped support overall growth in 2016, have
been completed. Finally, a sharp rise in the costs of key raw
materials impacted profitability. However, despite volume declines
in some areas, Jotun’s Powder Coatings business grew in 2017
and the company strengthened its position in key markets.
The Board notes that Jotun’s regional and concept diversity
helped the company to offset volume declines in the Pipeline
and Building Components concepts in the Middle East with
growth in other concepts and markets. For example, Jotun
performed well in the Furniture concept and General Industries
concept, which includes electrical switchgear, shelving, interior
lighting and automotive components. The Board is encouraged
by rapid growth in China, India, Indonesia and Vietnam and by
double-digit growth in East Europe and Central Asia. Jotun also
performed well In West Europe (led by the Czech Republic) and
in Scandinavia.
Over the past few years, Jotun has invested in the development
of several new specialised products for specific concepts. For
example, the company has developed products that can be
applied to Medium Density Fibreboard (MDF), among other
products for the Building Components and General Industry
concepts. While the Board does not anticipate that market
conditions in the Middle East will fully recover next year, the
company remains confident that by tailoring solutions for
individual customers, working more closely with global key
account clients and continuing to develop innovative products,
the company can accelerate growth in the years ahead.
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), North East Asia
(South Korea and China), East Europe (Turkey), and the Americas
(USA), in addition to a new regional R&D Powder Coatings unit
for West Europe in Czech Republic as well as a new unit for
intumescent products in the UK. In 2017, the regional R&D unit
in Turkey moved into new R&D premises. 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. It is
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.
In 2017, the Protective Coatings segment, the company launched
the Thermosafe range, enabling customers to operate at higher
temperatures with enhanced safety, efficiency and productivity.
In the Powder Coatings segment, the company has developed
products that can be applied to Medium Density Fibreboard
(MDF); a zinc free primer for cost effective corrosion protection
and a new trend collection to inspire architects. In the Marine
segment, Jotun launched a series of vessel maintenance
products, consisting of Barrier Smart Pack, Jotamastic Smart Pack
HB and Hardtop One, which represents the world’s first NORSOKapproved
solution for brush and roller application.
Two important interior products were launched in the Decorative
segment. Fenomastic Wonderwall, premium interior wall paint,
will further strengthen our leading position in Middle East. The
new generation Lady Pure Color for Scandinavia will ensure that
the success story for this product will continue.
Innovation remains a critical focus area for Jotun. The new
research centre in Flixborough, UK for intumescent products,
is featuring two furnaces, laboratories, mill rooms, offices and
plant space. The Board also welcomes the ongoing 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 laboratory 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 nextgeneration
products.
5. COMPETENCE DEVELOPMENT
Jotun works across all segments and regions to develop personal
and collective competence with a unified approach. Best
practices are shared, structured learning programmes and tools
are utilised, and, throughout all activities, the Group’s business
strategy is supported and empowered.
In addition to on-the-job training, Jotun provides a broad
range of competence development programmes through Jotun
Academy. The Academy encompasses some 37 programmes,
with around 360 trainers interacting with around 3 000 delegates
every year. In 2017, two of its key areas, Operations & HSEQ and
Management, underwent a complete revitalisation. Both were
streamlined and enhanced, with less training days and more
preparatory and post-learning activity, incorporating tools such as
nano-learning lessons, e-learnings and self-assessments.
In 2017 Jotun strengthened its Global Mobility programme,
boosting the number of employees on short-term assignments,
mobile workforce placements and international assignments.