Norwegian paint supplier Jotun expects a boost to its marine business from the new IMO regulations in the coming quarters, despite a small newbuilding orderbook.
Company officials say there are additional paint requirements from this year associated with scrubbers, ballast water treatment systems and fuel performance.
“New regulations will be a catalyst for higher demand for coating,” Jotun’s sales director for hull performance solutions, Ole Jorgen Tveit, tells TradeWinds. “We see these as good opportunities.”
With bunker costs expected to rise for vessels without scrubbers, Tveit says shipowners and third-party technical managers will require more performance coating to help save fuel.
Scrubber manufacturers will also need different paints for the outlet, piping and insulation of their systems.
“We think coating can contribute to this great [IMO 2020] change ahead,” Tveit says.
Under the IMO’s Ballast Water Management Convention, vessels are required to install treatment systems when renewing International Oil Pollution Prevention Certificates after 8 September.
When installing the treatment systems, vessels will need coating for ballast tanks and tubes, according to Marc Giesselink, Jotun’s global director for tank coating. “It could [lead to] additional demand on the painting side,” he says.
Also, when ships go into dry dock to retrofit scrubbers or ballast water treatment systems, maintenance that requires paints is likely to be carried out simultaneously.
“We think both 2019 and 2020 will be strong dry-docking years,” Tveit says. “Definitely there are opportunities.”
Sandefjord-based Jotun, which also supplies paints to the offshore, energy, infrastructure, industrial and consumer sectors, posted operating revenue of almost NOK 17.7bn ($2bn) for 2018, up 7.7% year on year.
It recorded an operating profit of NOK 1.36bn, roughly on par with 2017.
However, the company has confirmed that its marine coating business was plagued by slow newbuilding activity. According to Clarksons, the cargo fleet orderbook amounted to 10.7% of total fleet capacity as of early February, a historically low level.
While admitting Jotun is exposed to the newbuilding downturn, Tveit points out that his company is cushioned by paint demand for ship maintenance.
“The maintenance activity has been relatively OK. We have a relatively good balance between newbuilding and maintenance [coating businesses],” he says.
