Jotun Powder Coatings is a leading supplier of powder coatings to companies active in industries related to appliances, furniture, building components, pipelines and general industries.
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.