18
OUR BUSINESS
Jotun’s powder coatings business grew modestly in 2017 as the company strengthened its position in
key markets.
JOTUN POWDER COATINGS
POWDER COATINGS
INNOVATION, SERVICE AND TEAMWORK
In 2017, Jotun had slower growth than expected in the
powder coatings business due to weakening demand for
pipeline and rebar coating products, particularly in the
Middle East. Coatings for steel rebar were affected by lower
investment in projects in Saudi Arabia and Qatar. 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 have been completed. Finally, a sharp rise in the costs
of key raw materials impacted profitability.
REGIONAL AND CONCEPT DIVERSITY
Jotun’s regional and concept diversity helped the company
to offset volume declines in the pipeline and rebar coating
products with positive results 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. Sales
of products for the Appliances concept were flat. The company
is encouraged by rapid development in China, India, Indonesia
and Vietnam, and by satisfactory double-digit growth in Eastern
Europe & Central Asia (led by Turkey). Jotun also performed
well in Western Europe (led by the Czech Republic) and in
Scandinavia (led by Sweden).
In 2017, the company developed new premium solutions to
meet specific customer demand. Products included Ultra One,
an effective substitute to liquid technology that can be applied
on Medium Density Fibreboard (MDF); Primax Xtend, a zinc
free primer for cost effective steel corrosion protection for
building components and general industrial applications; the
Jotun Architectural Trends Collection, a selection of colours to
inspire architects for their most prestigious projects and Primax
Diamond, a specialised primer for diamond cut alloy wheels.
The company also continues to work closely with global key
account customers, such as Electrolux, Panasonic and IKEA,
and has developed closer links with companies like Mubea and
Maxion, which manufacture automobile components.
ADJUSTING TO MARKET CHANGES
Looking ahead, Jotun is implementing segment-wide price
increases to compensate for increased raw material prices. The
company has also built client teams that include sales, technical
service and laboratory personnel (the “Troika approach”) to
help customers realise value by optimising their processes. While
Jotun does not anticipate 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.
5+5 %
SCA 11 %
SALES IN BILLION NOK
WE
2017
16 16+M 11+40+23+5+%
2016
EECA
2015
2014
2013
40 %
0 1 2 3 MEIA
23 %
SEAP
5 %
NEA
SALES
PER REGION