True colours: The pen­guin story

Thai­land man­ag­ing di­rec­tor Gun­nar Thore­sen on the Jo­tun brand

Norway-Asia Business Review - - Contents - Text and photo by Ezra Kyrill Erker

There are no pen­guins in Nor­way, but there is a rea­son for use of the aquatic bird as the sym­bol of Nor­we­gian paint gi­ants Jo­tun. And while the com­pany has a very vis­i­ble pres­ence in home paints in Thai­land— with its rec­og­niz­able logo, yel­low with a red stripe and blue let­ter­ing on a blue back­ground— most of Jo­tun’s world­wide sales come from more in­dus­trial uses, such as pro­tect­ing ships and coat­ing the con­crete and steel of iconic struc­tures such as the Eif­fel Tower, Petronas Tow­ers, Ma­rina Bay Sands and Burj Al-Arab. De­spite the va­garies of the mar­ket­place and po­lit­i­cal up­heavals in its var­i­ous pro­duc­tion bases, the com­pany has grown to be­come the ninth big­gest paint man­u­fac­turer in the world, with $2.6 bil­lion in an­nual sales in a to­tal mar­ket size of $80 bil­lion. In Thai­land, bill­board and hoard­ing ad­ver­tise­ments and “Pen­guinized” sec­tions within paints and hard­ware shops give it a very high pro­file. Jo­tun prod­ucts have coated the in­te­ri­ors and ex­te­ri­ors of the Ra­ja­man­gala and Buri­ram sta­di­ums, the govern­ment com­plex in Chaeng g Watthana, , the Min­istry of De­fence build­ing, g, Kasikorn Bank, Siri­raj Hospi­tal and a mul­ti­tude itude of con­do­minium high-rises, of­fice e com­plexes, ho­tels and shop­ping cen­tres. While many Thais and ex­pa­tri­ates are un­aware that Jo­tun is a Nor­we­gian com­pany, among other mainly low-pro­file Nor­we­gian in­ter­na­tion­als it is a brand­ing suc­cess story. Thai­land man­ag­ing di­rec­tor Gun­nar nnar Thore­sen sat down with the Re­view ew to talk about the op­er­a­tions of Jo­tun, its 45-year pres­ence in Thai­land and “the pen­guin story”. “Jo­tun started mainly as a ma­rine coat­ing com­pany sup­ply­ing paints to the whal­ing fleet in Nor­way,” Mr Thore­sen says. The fam­ily-owned com­pany formed in 1926 and has en­joyed steady growth since then, mov­ing early into Asia and emerg­ing mar­kets. While it has oper­a­tion bases in ev­ery con­ti­nent, most of its fo­cus is in Europe, the Mid­dle East and Asia. “Man­u­fac­tur­ing in Thai­land started in 1968. It was a very hum­ble be­gin­ning, and Jo­tun’s first man­u­fac­turer in Asia. Thai­land was not so struc­tured at that time. We had a rep­re­sen­ta­tive in Thai­land that helped us start in Sa­mut Prakan. The fa­cil­i­ties are in the same place but the prod­ucts have changed and the mar­ket is very dif­fer­ent.” Jo­tun cur­rently op­er­ates in four main seg­ments, Mr Thore­sen ex­plains: dec­o­ra­tive paints, for house­hold and in­te­rior use; pro­tec­tion coat­ings, for anti- cor­ro­sion pro­tec­tion for steel and in­dus­trial struc­tures; ma­rine coat­ings, for ships; and pow­der coat­ings, which in­cludes prote pro­tec­tion for mass-pro­duced metal ar­ti­cles as well as ap­plia ap­pli­ances such as wash­ing ma­chines, re­frig­er­a­tors and air con­di­tion­ers. co In de dec­o­ra­tive paints, where the com­pe­ti­tion is great great­est, the com­pany con­trols only 1.5 per­cent of mark mar­ket share, but is grow­ing in pow­der and pro­tec­tive

coat­ings, and in the ma­rine seg­ment it en­joys 20 per­cent of the global mar­ket. “As you know this is a fam­ily-owned com­pany. There is one mi­nor­ity share­holder but the com­pany is still con­trolled by the orig­i­nal fam­ily. So that means the strat­egy can be very dif­fer­ent from a listed com­pany; it can be very long-term, it can be sta­ble, and it has been for many years.” The suc­cess can be partly at­trib­uted to a strong pres­ence in Nor­way, an em­pha­sis on re­search and de­vel­op­ment and in­ter­na­tion­al­iza­tion. Jo­tun’s rise as a global brand is due, Mr Thore­sen ex­plains, to its lo­cal pro­duc­tion, with 70 com­pa­nies in 40 coun­tries. “We try to ‘ lo­cal­ize’ our pres­ence. We try to source as much of the ma­te­ri­als lo­cally. In Thai­land we use around 60 per­cent lo­cal ma­te­ri­als.” That in­cludes hir­ing lo­cal staff – the 500 in Thai­land are nearly all Thai – and hav­ing a very in­ter­na­tional man­age­rial mix. “I was in Saudi Ara­bia for five years from 2005; we had seven dif­fer­ent na­tion­al­i­ties in the man­age­ment team,” he says. The Asia re­gional head is Sin­ga­porean and the coun­try heads are a va­ri­ety of na­tion­al­i­ties. “In the old days all the man­agers were Nor­we­gian, but it’s be­com­ing more and more in­ter­na­tional.” In­ter­na­tion­al­iza­tion and lo­cal­iza­tion have co­in­cided with growth. The strat­egy has been to be early play­ers in a mar­ket, like es­tab­lish­ing early in Thai­land. Now Jo­tun has be­gun sell­ing and look­ing for an op­er­a­tions base in Myan­mar, al­though Mr Thore­sen ad­mits that it is un­likely to be prof­itable for the next five or ten years. “In the ’80s we started a lot of fac­to­ries, like in Egypt, in Saudi Ara­bia, in Malaysian and Oman, and they took years to take off, and now they’re part of the back­bone of the whole com­pany. “All the other paint com­pa­nies are merg­ing and buy­ing but for Jo­tun it’s or­ganic growth. So we can be num­ber 9 be­cause the oth­ers are merg­ing. A few years ago we used to be num­ber 20. Growth in Nor­way and Europe is zero. Growth has been steady in the Mid­dle East and in Asia, but in China, the big­gest mar­ket for Jo­tun, the new build­ing of ships has nearly stopped. “Dur­ing the Asian Fi­nan­cial Cri­sis in ’97- 98 ev­ery­thing col­lapsed, es­pe­cially in Thai­land. The property mar­ket, the con­struc­tion mar­ket, they col­lapsed to­tally. And sales along with it. Many in­ter­na­tional com­pa­nies at that time with­drew or can­celled in­vest­ment plans or scaled down.” Jo­tun, on the other hand, en­joyed a more sub­stan­tial re­la­tion­ship with lo­cal sup­pli­ers, em­ploy­ees and com­pa­nies that was and re­mains in­for­mal but based on re­spect and core val­ues, Mr Thore­sen says. With Scan­di­na­vian growth at a stand­still and growth in Asia likely to ta­per off some­what, fu­ture growth is more likely to be steady rather than spec­tac­u­lar. The com­pany’s two le­gal en­ti­ties in Thai­land, in charge of sep­a­rate di­vi­sions, will merge this year to stream­line op­er­a­tions.

“It’s or­ganic growth” he sum­ma­rizes. “If there’s a cri­sis in Europe we tackle that and we grow else­where. Ev­ery year there’s a big cri­sis some­where, whether ship­ping in China or con­sumer goods in Europe or the Asian fi­nan­cial cri­sis, but we main­tain a good bal­ance.” A key to that bal­ance, he says, is main­tain­ing high eth­i­cal stan­dards for how to con­duct busi­ness. “In Asia it’s a lit­tle harder, but that’s why we have the com­pli­ance man­ual, which we ad­here to. We’re not in the huge projects where cor­rup­tion is a big prob­lem.” While it’s a com­pany that deals with chem­i­cals, it also has a strong “green steps” phi­los­o­phy, Mr Thore­sen points out. Jo­tun was at the fore­front of the in­dus­try in Europe in ban­ning haz­ardous ma­te­ri­als and phas­ing out lead-based prod­ucts. Cut­ting out a tar in­gre­di­ent lost the com­pany a lot of busi­ness in Thai­land, he says. Dis­posal is strictly reg­u­lated, and con­di­tions at sup­pli­ers are mon­i­tored to make sure that there are no breaches such as child labour or haz­ardous con­di­tion and that com­pany stan­dards are ad­hered to. Sup­pli­ers that don’t com­ply are banned. “You can’t phase out lead prod­ucts, for ex­am­ple, un­less you have very good re­search and de­vel­op­ment fa­cil­i­ties to pro­duce al­ter­na­tives which are en­vi­ron­men­tally friendly,” he adds. R&D has helped the com­pany be a leader in tech­ni­cal prod­ucts such as pro­tec­tive coat­ings for off­shore oil and gas plat­forms. A new prod­uct that will come to mar­ket soon is a fire-re­sis­tant coat­ing that will help pro­tect struc­tures such as high rises, of­fice tow­ers or off­shore oil rigs in the event of fire and thus save lives. So how did the pen­guin come about? The Jo­tuns are the frozen gi­ants of Norse mythol­ogy, foes of Thor, and the first com­pany lo­gos in­volved Thor’s ham­mer. This evolved into the po­tent Nordic sym­bol of a rein­deer, but the com­pany’s as­so­ci­a­tions with the Antarc­tic whal­ing fleet even­tu­ally had it choose the pen­guin. In 1970 this logo grew to in­clude the globe to em­pha­size its in­ter­na­tional cre­den­tials. The pen­guin, ac­cord­ing to com­pany lit­er­a­ture, rep­re­sents core val­ues of loy­alty, care, re­spect and bold­ness. With 41 fac­to­ries on six con­ti­nents, the fam­ily- owned com­pany can sur­vive lo­cal­ized hic­cups as it continues to em­pha­size these core val­ues, lo­cal­ized man­age­ment and re­liance on pi­o­neer­ing re­search and de­vel­op­ment, to re­main a global leader in its field as well as a trail­blazer as a cor­po­rate brand.

Gun­nar Thore­sen [Jo­tun’s] suc­cess can be partly at­trib­uted to a strong pres­ence in Nor­way, an em­pha­sis on re­search and de­vel­op­ment and in­ter­na­tion­al­iza­tion. Jo­tun’s rise as a global brand is due to its lo­cal pro­duc­tion, with 70 com­pa­nies in...

Newspapers in English

Newspapers from Norway

© PressReader. All rights reserved.