Low oil prices and a strong dollar against Norway’s weak krone have been setting off turbulence in the Norwegian economy, but at least one company is thriving on the combination. Jotun, the large international firm that’s a leading producer of paint and coatings, has reported record earnings, up an astonishing 62 percent.
Business is booming for the Sandefjord-based company that employs around 9,700 people in more than 90 countries. It has a diversified customer base, from homeowners to shipowners and industrial firms, and expects continued growth.
Lately the favourable foreign exchange rate has greatly contributed to its earnings, reported newspaper Dagens Næringsliv (DN) this week, just before Norway’s central bank cut interest rates again in a move that further weakened the value of the krone. “A weak krone and strong dollar inflates the numbers in our accounts, where we report in kroner,” Jotun chief executive Morten Fon told DN. A million US dollars in revenues, for example, now converts to NOK 8.5 million, compared to just over NOK 6 million last year.
“But there are other things that are good for us,” Fon noted. Sales are up 10 percent and the lower prices have also meant lower prices for some of Jotun’s oil-based products, even though the decline isn’t nearly as steep.
Jotun is now investing NOK 100 million in a new plant in Myanmar. Strong demand is also fueling expansion in Egypt, elsewhere in the Middle East and in Southeast Asia.