Paints Sector Assessment for 2021-2022

Boyatürk Magazine Features Sector Professionals' Assessment of the Paints Industry

DYO General Manager - Mehmet Mutlu Uysal

The introduction of social restrictions in the first half of 2020 had a negative impact on the economy, with some industrial companies halting production. At DYO, we accelerated our ongoing efforts, making safe production and secure working conditions our primary objective. As a result of our efforts, we ensured continuity of production and employment during the pandemic and closed 2020 with annual revenue growth of 30.5 percent. In 2021, we learned to live with the pandemic. The year 2021 was spent combating increases in all raw material and transportation costs on an origin basis. By effectively managing our research and development, procurement, sales, logistics and planning processes, we ensured no customer was left without products. Like every crisis period, this period taught us much. By adding our new experience to our existing experience, we will successfully navigate this different turning point in carrying our company into the future. As DYO, we are structuring our plans for future years around providing efficient, rapid, productive and appropriate services. We continue to strengthen our position in the global arena. We continue to invest in research and development. With our commitment to innovation, we develop different product categories and bring them to our customers. We are certainly not considering pausing investments. Developing products in the health and hygiene sectors, Zero Waste in the environmental sector and Safe Production are among our priority areas. Through our business partners abroad, we export products supplied to the Asian, European and African markets to more than 50 countries. At the same time, with the products we manufacture at our facility in Krasnodar, Russia, we continue to maintain our presence in the Russian and Eastern European markets. The pandemic taught us to stay home and produce. During lockdown periods, while demand for do-it-yourself products increased, paint demand exceeded expectations. We also developed a paint under the name Hobilux that can be used on ceramic, metal, wood, plastic, marble, glass, furniture, stone and similar surfaces in virtually every space from kitchens to bathrooms, bedrooms to living rooms. Hobilux, which can be used to easily renew old surfaces and items or change their colors, brings novelty and vibrancy to the surfaces it is applied to. We continue to provide market solutions by shaping our plans according to daily trends and consumer demands.

Polisan Kansai Paints - General Manager and Board Member A. Cemal Drahor

In 2019, decorative paint consumption in Turkey was 408 thousand tonnes, but in 2020, despite pandemic conditions, this figure reached 517 thousand tonnes. This activity continued to increase in 2021. The Turkish paint market showed 24 percent growth in the first nine months of 2021 compared to the first nine months of the previous year. As Polisan Kansai Paints, our revenues increased by 48.7 percent in the first nine months of 2021 and we finished the year in line with our targets. While disruptions in the global supply chain, logistics problems and rising raw material costs pressured operational profitability across the entire paint sector, we reduced our costs through Kaizen methodology; we implemented continuous improvements in every area from production to logistics, from planning to inventory management with the principle of operational excellence. Compared to our counterparts operating in the sector, we successfully managed the pressure on our profitability. With our environmentally responsible and consumer-focused production, we continued to bring our innovative, creative and high-performance products to consumers. Demand for water-based and antibacterial paints is increasing globally. Products with antibacterial and anti-fungal properties that prevent bacterial and fungal formation and provide extra hygiene are gaining prominence. While we meet this consumer expectation with products in our range, in 2021 we also added artistic hobby paints to our product portfolio, and these paints received strong interest from consumers wishing to easily refresh objects and furniture in their homes. Additionally, through our research and development efforts, we developed the 'PROF'essional Solutions' series and Turkey's leading effective interior paint against viruses and bacteria. 2021 was a year in which we achieved new successes with our sustainability efforts. Polisan Holding and Polisan Kansai Paints have participated in the Carbon Disclosure Project (CDP) for nine consecutive years. Due to our work supporting sustainable development in the Carbon Disclosure Project (CDP) Climate Change Program and Water Security Program, we raised our global CDP rating to "B" level. In combating climate change, we reduced Scope I-II emission intensity by 49 percent over nine years. In 2022, we will continue to increase the variety of our products and services, establish a presence in new markets, and add new items to our high-value-added product range. Our five-year plan is ready and our target is to continue profitable revenue growth.

Jotun - Vice President / Eastern Europe and Central Asia Region - Şükrü Ergün

We could foresee from the previous year that 2021 would not be an easy year. The continuation of pandemic conditions, ongoing supply difficulties in raw materials worldwide, uncertainties in the Turkish economy and rising exchange rates were highly challenging for all of us. We believe that through the experience we bring from the past, our strong strategy and our ability to quickly adapt to current conditions, we were able to overcome these fluctuations. Thanks to the precautions we took since the beginning of the pandemic, our production never stopped. Thanks to the measures we took, we have had no serious incidents to date. Not only was there no decline in our company productivity, but we closed the year with results exceeding the growth rate experienced in the paint market. We are pleased with such results during a crisis period, and I take pride in our colleagues. At Jotun, we continue to benefit from the advantage we have always gained by operating in four segments: Decorative Paints, Industrial Paints, Powder Coatings and Marine Paints. Thus, we were able to analyze the paint market from a broader perspective and had the opportunity to mitigate any risks that could arise in any segment. With our ever-strengthening and growing dealer network, the quality of our retail presence, the superior service we provide to our customers and our new products that bring differentiation and growth, we closed 2021 with growth. As a large family, through our dealers and customers, we strengthened each other and achieved profitable growth this year, and we will continue to grow. We know that 2022 will present us with similar challenges. However, whatever the conditions, I am confident that with our large Jotun family consisting of our employees, dealers and business partners, we will close this year with growth.