14
OUR BUSINESS
POSITIONED FOR RECOVERY
Despite continued uncertainty in the newbuilding market, Jotun Marine Coatings is working according to
strategy by maintaining a market leading position and growing the DryDock and SeaStock business.
Weak demand for ocean transportation, tonnage overcapacity
and low freight rates continued to act as a drag on the
shipbuilding industry in 2017, impacting Jotun’s Marine
Coatings segment. Profitability was also impacted by rising
prices of raw materials. While a rise in newbuilding orders
(mostly for containerships and bulk carriers) in China and
South Korea in the second half of the year suggests a modest
recovery, it will take some time for these vessels to be built. By
contrast, yard activity in Western Europe has picked up, thanks
to growing demand for cruise vessels, where over 90 vessels are
currently on order. Jotun has also secured a five-year contract
with a leading cruise shipyard.
SEIZING OPPORTUNITIES
Jotun has moved quickly to adjust to the new market reality
by focusing on the DryDock and SeaStock concepts. In 2017,
the company recorded growth in the DryDock concept of 17
per cent, driven in part by increased demand for Jotun Hull
Performance Solutions, a concept applied to over 160 vessels.
In the SeaStock concept, Jotun continues to perform well with
six per cent growth, despite increased pressure on prices. Jotun
JOTUN MARINE COATINGS
MARINE COATINGS
6+5 %
6 %
AM
SCA
SALES IN BILLION NOK
21 %
2017
WE
7+21+6+M 12+5+43+2016
2015
7 %
2014
EECA
6 %
2013
12 %
MEIA 0 1 2 3 4 5 6 7 SEAP
43 %
NEA
SALES
PER REGION
has also gained ground in the Tank Coating concept and is
preparing to launch a product with a cutting-edge technology
in 2018.
Consolidation in the shipping industry has created fewer, larger
players which seek long-term partnerships with suppliers. For
example, some customers prefer to outsource the management
of SeaStock to Jotun for a fixed fee. Product quality remains
vital to Jotun’s offering, but the company recognises that
owners are increasingly looking to suppliers for solutions to
improve their business. By leveraging digital tools, sensor
technologies and data analytics, Jotun can quantify results,
customise services and provide better decision support.
BUILDING LOYALTY
Over the past five years, Jotun has taken significant steps
to adjust to challenging markets. While uncertainty in the
newbuilding market is likely to continue to impact sales in the
short-term, the company has retained its leading market position
by responding to the evolving needs of owners for solutionsbased
services and improved environmental performance.