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Published on January 18, 2008

Several of its raw materials, such as solvents, resins and additives, are related to oil prices. Last year, its suppliers informed the company that invoices would go up 5-15 per cent.

In 2007, Jotun absorbed the higher product costs, which ate into its net margin. It had to trim other expenses, such as management overheads, to maintain its operating results.

"This problem is very serious. So, the company needs to increase product prices," managing director Eric Mallace said yesterday.

Jotun plans to launch an innovative product in the decorative segment this quarter after not introducing anything last year due mainly to the economic slowdown.

"Formerly, the company planned to introduce the new product last year, but we hesitated after we saw the Thai economy was not showing a bright outlook. Finally, we decided to delay this plan because we want to make sure of a good response from customers when we introduce the new product to them," Mallace said.

The company was very silent last year compared with its rivals, but its operating results still improved as it expected. The company declined to reveal percentage growth or even total sales revenue and volume figures for last year.

The sluggish economy was the crucial factor for the paint industry and Mallace does not believe that the prospects for this industry as well as the economy will be any better this year.

"Jotun Thailand still performed well last year despite having nothing new for the market and facing higher costs and fierce competition. This is because we had good workers who were very flexible in the current situation. Jotun also has its own customer base which is loyal to this brand," he said.

Recently, there was an article mentioning that the paint industry looks to be 5 per cent larger this year, so Jotun aims to grow beyond this forecast, he said.

The company is the leader in the market for marine coatings and protective paints. The shipping business here will steam ahead in the next few years, so the company is bullish about its near future.

"Jotun's three-year business plan is aimed at achieving two-digit growth. If the economy recovers, I believe that we can reach this goal. This year is a challenging year. I will look forward to seeing the company perform," he said.

Mallace was appointed managing director of Jotun Thailand a year ago. He has worked for Jotun for 17 years since 1991 in various positions in the United Kingdom, Dubai and Malaysia.

Nalin Viboonchart

The Nation