(MENAFN- Khaleej Times) Jotun Paints, one of the world's leading producers of paints and coatings, is on track to invest Dh500 million over the next three years to upgrade plants and build new production facilities in the Middle East.
The Norway-based manufacturer, a market leader in the region, believes it is in a strong position to continue its long term growth, in spite of the challenges posed by the global economy or the Arab Spring.
Erik Aaberg, group executive vice-president and managing director of Jotun for the Middle East, said the brand, being a market leader, has to build on its strength by coming up with an innovative line of products to maintain its edge. With most of the iconic structures either carrying its colours or is being protected by its decorative or protective coatings, Jotun today commands 25 per cent of the regional market worth Dh6.7 billion.
"Our group has sound financial foundation which enables further investment in line with its proven organic growth strategy," Aaberg said.
"We believe in organic growth, therefore we do not have any mergers and acquisition strategy in our plans. Emerging markets are our focus," Aaberg told Khaleej Times in an interview.
Aaberg, who has basically set up the whole operations of Jotun Paints in the Middle East, said the company cannot afford to rest on its success and has to stay strong on its commitment to maintain quality, meet market demand, and offer environment-friendly products. He believes the capability to innovate consistently has been a key cornerstone to the brand's continued growth and success. "Innovation is not only the core target of our business model but also a passion that drives us to meet the demands of our customers."
Currently, Jotun is ranked as the world's ninth biggest paint manufacturer with 74 companies in 43 countries and 39 production facilities across all continents. In 2011, Jotun's operating revenues reached 10.7 billion kroner in 2011, up from 9.8 billion kroner the previous year, and the company has 8,600 employees.
Jotun has experienced an average growth of nine per cent in volume since April 2011 in Middle East, a "growing market that accounts for 25 per cent of our global turnover".
This year, Jotun is on course to record seven per cent surge in volume and a 13 per cent growth in turnover.
"We have been growing steadily in the Middle East and have never experienced a literal recession," he said.
Jotun has an employee strength of 2,200 people and a strong dealer network of 1,800 in the region. "Jotun's offer of 'consistency in colour choice and quality' has been the key to build trust in the brand within the region. We have always focused on educating our customers on colours and protection," said Aaberg.
In the UAE, where Jotun set up operations in 1970s, it has three factories - one in Abu Dhabi and two in Dubai - for decorative paints, marine paints and powder coatings.
On the road map for future growth, Aaberg said Jotun would continue to focus on emerging markets. "In 2007, we opened two factories in Pune, India and are building the second plant in Pakistan. We are also planning new investments in Brazil, Russia, Myanmar, Bangladesh, the Philippines and Syria."
Aaberg, who has been in Dubai for more than three decades, will soon be moving to China to spearhead operations in one of the fastest growing regions in the world.
"In the Middle East, we see further big growth prospects in spite of the Arab Spring setback in some markets. We plan to invest further in the region in upgrading our existing facilities and setting up new plants," said Aaberg.
Jotun produces 180 million liters of paints per year in the Middle East. Of which 70 per cent is decorative paints.
Jotun has local labs in Dubai that develops customised, region-specific paints. Most of the landmarks in the region have Jotun touch. Dubai Metro has consumed 3.5 million litres of its paint while Burj Khalifa consumed around 300,000 litres of paint, he said.
"At Jotun, protection is at the core of all we do and as we take continuous steps to better protect your property, we are also taking even greater steps to better protect our environment," said Aaberg.
An integral driver to all new innovations at Jotun is the company's environment protection initiative called "Jotun GreenSteps", said Aaberg.
The program covers five focal goals that ultimately work towards making a significant difference to the world we all share. These include reduction in energy consumption, reduction of carbon footprint, reduction of waste, reduction of solvent or volatile organic compound and reduction of hazardous materials, Aaberg said.
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