What have been Jotun's most significant achievements since it was established in Thailand in terms of production capacity and product portfolio?
We have a long history here, with operations beginning in 1968. We started quite early in Thailand, and in our business we focus on four segments, namely decorative, marine, protective, and powder. All of these four segments make up our production here. Our revenue in Thailand is close to THB4 billion and we employ more than 400 people. In the past few years, however, we have seen a bit of a slowdown because of the economic and political situation. So far, the most in-demand segment is decorative. We see that in the long term because it points to solutions for the paint capital in this sector. The decorative capacity in this country is still growing because it is a developing country. Nonetheless, we are actually quite balanced, and within the company portfolio in Thailand it is divided into 44% sales in decorative, 24% in protective, 26% in powder, and the rest in marine coating.
What does the recent integration of the AEC mean for Jotun and how can this single-market encourage new opportunities?
The biggest benefit will be with the taxes, because we will have more conveniences with import and export duties. If you speed up the order for transportation as well that is related to human capital and people moving making it easier. It will not be a fast change because this region is complicated, politically speaking. Also there are different economic policies, taxation, and cultures that will affect us over a longer period. Nonetheless, Jotun enjoys a strong presence in ASEAN, where our product and client base typically varies depending on the market. Our marine operations, for example, are strongest in Singapore because there are many ship owners there. In Malaysia our strength is with the oil industry. Indonesia is the same way. Myanmar and Cambodia are just beginning to emerge, and in the Philippines, things are developing slowly and we are building a factory there.
In which sector of the economy do you forecast the most growth in coming years?
I do not foresee rapid growth, and as we look at the country's broader economic development, there has been stagnation over the past few years. Many have talked about 2% growth as being the number for Thailand, and I have seen that as well. The market is quite volatile at the moment, and the growth is not there. Our budget has been reduced as a result. In 2015, we actually dropped by 8%. Real estate is a sector in which we work with closely, however yet again it is quite difficult to forecast the trends there. There are still many projects that have been proposed but are not on the schedule. What we understand is that due to market volatility, interest, and exchange rates, it is difficult for financial institutions and developers to protect their return on investments. They are trying to predict low investment plans and not cancelling but rather delaying.
What are your expectations for the year ahead?
This year we tried to revise our budget to some extent and be more cost conscious about production. Our expectations are to achieve 3-5% growth. This year, we will see better growth in decorative and powder. In terms of production, we are producing 22 million liters, and we are producing powder at close to 9,000 tons. Our growth has been fluctuating, but we have still grown so much since when basic operations began. We are established in both Thailand and the wider region. The foundations are quite good here, and we are looking at long-term solutions such as building a warehouse here. That is why we are spending a lot of money this year in this area.