Songwon more than doubled its operating profit for the second quarter, benefiting from high demand, said the company.
The company’s earnings before interest, taxation, depreciation and amortisation (EBITDA) more than doubled to hit South Korean won (W) 62.9bn (USD48.2m), echoing the strength of the first quarter results. Songwon’s Industrial Chemicals segment increased revenue by almost 50%, as buyers benefited from favourable exchange rates in the region, and aimed to offset potential logistics issues from alternative suppliers.
Its key Polymer Stabilizers business recorded higher sales despite the negative impact from lockdowns in Asia and the war in Ukraine. Fuel and Lubricant Additives within this segment marked particular strength, as consumers bought ahead of typical patterns to ensure prompt deliveries of material.
Coatings also performed well due to high demand in the US, Europe and domestically due to ongoing industry recovery and the firm was able to pass down price increases to customers. The Performance Chemicals division also behaved similarly, with tin intermediate sales in line with maximum plant output and raw material prices for tin easing later in the quarter.
Polyvinyl chloride (PVC) sales suffered from logistics constraints outside of Asia but remained profitable as increased pricing was accepted downstream. Songwon’s polyurethane (PU) businesses also reported an increase in revenue, despite lower sales volumes, as thermoplastic PU demand was strong in the wire and cable market across global markets. The South Korean firm is cautious on predicting how the company will perform in the second half of the year against inflationary pressure, macroeconomic volatility, and supply chain constraints.
As per MRC, in October 2021, Gazprom Neftekhim Salavat LLC (GNS) signed an agreement for the development of a basic design and a license agreement for the use of Songwon Industrial technology. The contract makes it possible to organize the production of superabsorbent polymers (SAP) based on acrylic acid at the enterprise. The new production will be a continuation of the chain of processing of acrylates into superabsorbent polymers. In the manufacture of products will be used its own raw materials - butanol and propylene.
Songwon Industrial Co., Ltd. - the second in the world in terms of production of polymer stabilizers. The company's product range includes polymer stabilizers, alkylphenols and alkylcresols, PVC stabilizers, plasticizers, organotin, polyurethanes, flocculants. The company's headquarters is located in Ulsan, Korea.
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