Hikal faces volume growth pressure in crop protection and pharmaceuticals divisions

Hikal Ltd. (Mumbai) recorded a 6.6% year-over-year decline in net sales to 3.8 billion Indian rupees ($43.3 million) for the fiscal first quarter ended June 30, as per Chemweek.

The decrease in revenue was influenced by deferred offtake following the company’s USFDA Official Action Indicated (OAI) status declared in May 2025. The company reported a net loss of 230 million rupees, a contrast to the profit of 50 million rupees recorded in the same period last year. Hikal's EBITDA also took a hit, plummeting 57% year over year to 250 million rupees, reflecting the adverse impact of the regulatory challenges.

In Hikal’s crop protection unit, revenue remained flat at 1.7 billion rupees, contributing 47% year over year to the group’s total revenue. However, the unit experienced a 19% year-over-year decline in EBIT, which fell to 170 million rupees. The pressures on volume growth margins were evident, highlighting the challenges faced by this segment.

The pharmaceuticals business, which comprises active pharmaceutical ingredients and contract development and manufacturing organizations, saw a revenue decrease of 11% year over year to 2 billion rupees. This decline was attributed to a short-term pause in customer offtake following the OAI status. The pharmaceuticals division reported an EBIT loss of 260 million rupees, compared with an EBIT profit of 90 million rupees in the prior year. During the quarter, volumes in key products and markets were adversely affected, and the margin mix remained unfavorable, contributing approximately 53% to the group’s total revenue.

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The South Korean government has met with petrochemical industry representatives to discuss restructuring plans that could result in between 2.7 million metric tons per year (MMt/y) and 3.7 MMt/y of ethylene capacity being eliminated through the closure of naphtha crackers in the country, as per Chemweek.

The meeting marked a major step in the government’s commitment to restructuring South Korea’s petchem sector, which faces structural overcapacity.

The country’s ministry of trade, industry and energy (Motie) held on Aug. 20 what it called the “voluntary business restructuring agreement ceremony for the petrochemical industry's resurgence,” at the Korea Chamber of Commerce and Industry in Seoul.

During the ceremony, the government outlined three key directions for petchem restructuring efforts: reducing excess capacity while transitioning to high-value-added specialty products; ensuring financial soundness; and minimizing the impact on regional economies and employment.

Motie also confirmed three guiding principles for government support: simultaneous restructuring of South Korea’s three petchem complexes; sufficient self-rescue efforts alongside the development of feasible restructuring plans; and the establishment of a comprehensive government support package.

Industry representatives announced plans at the meeting to reduce South Korea’s overall naphtha cracking capacity by between 2.7 MMt/y and 3.7 MMt/y, shift toward value-added and eco-friendly products, and mitigate adverse regional and national economic impacts using insights from industry consultants.

According to data from S&P Global Commodity Insights, South Korea’s ethylene capacity totals 13 MMt/y. The three complexes where its naphtha crackers are located are at Ulsan, Daesan and Yeosu.

Motie said that petchem companies have committed to developing a comprehensive business restructuring plan, including capacity closures, by the end of the year. The plan will include improvements to companies’ financial structures.

The agreement’s emphasis on voluntary and proactive industry commitments to a major structural transition is considered significant. It is a departure from the industry’s previous strategies of holding out during cyclical downturns and marks the initiation of a fully-fledged restructuring effort, Motie said.

The government will thoroughly assess the feasibility of the restructuring plans when they are submitted, as well as companies’ self-rescue initiatives, before rolling out a support package that includes financial, tax, research and development, and deregulation assistance, Motie said. Collaboration between the public and private sectors will be key to expediting the implementation of the restructuring efforts, it said.

Motie earlier this year designated Yeosu as a preemptive industrial crisis response area and is considering a similar designation for Daesan. Companies operating at Yeosu will be entitled to receive preferential treatment under a government emergency management stabilization fund and certain investment promotion subsidies.

The designation of Yeosu was the government’s first response under its Plan to Enhance Competitiveness in the Petrochemical Industry, launched in December 2024.

The ministry of employment and labor has also established a system for preemptive employment crisis response areas, with the city of Yeosu recently assigned various support measures including employment maintenance subsidies and livelihood stabilization loans.

The government has emphasized the urgency of bold and swift restructuring as the only pathway for the petchem industry, to secure its future competitiveness. Trade and industry minister, Kim Jung-kwan, called on Korean companies to engage actively in restructuring, reiterating the principle of “self-rescue efforts first, government support later.” He warned that the government would take firm action against companies that rely solely on government support without making responsible self-rescue efforts or those that seek to benefit from other companies' facility reductions.

The South Korean government is, in parallel, exploring strategies to revitalize the country’s petchem industry by facilitating the integration of petchem facilities with refining complexes, industry sources and government officials said over Aug. 14–19.

The petchem industry’s difficulties are reflected in the recent struggles of major players such as LG Chem Ltd. and Lotte Chemical Corp.

LG Chem’s petchem unit reported a dramatic downturn in its financial performance for the second quarter, swinging to an operating loss of 90 billion South Korean won ($63.3 million) from an operating profit of 46 billion won during the same period last year. The shift highlights the ongoing external pressures facing the sector. Lotte Chemical reported a big net loss of 471 billion won in the latest quarter, significantly widening from a net loss of 107 billion won in the same quarter last year.

DL Chemical Co. earlier this month approved a paid-in capital increase of approximately 150.0 billion South Korean won ($107.9 million) for its debt-ridden petchems joint venture, Yeochun NCC, a 50/50 partnership with Hanwha Solutions Corp.

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Brazil’s Secretariat of Foreign Commerce recommended implementing preliminary antidumping duties against US and Canadian polyethylene (PE) imports, according to a resolution published in the country’s Official Gazette Aug. 21, as per Chemweek.

The stipulated values for the preliminary antidumping duty were established at $199.04 per metric ton for US material and $238.49 per metric ton for Canadian products.

The resolution still needs to be voted on and approved by the Chamber of Foreign Trade before it can be applied to North American PE imports. The Chamber’s next meeting is scheduled for Aug. 28.

According to the decision, the Secretariat concluded there was dumping and harm to Brazil’s domestic industry on the prices applied by North American producers and traders.

“The domestic industry requested applying preliminary duties, as to neutralize the harm caused by PE resin imports in dumping prices,” said the statement.

A period of up to six months is recommended for the implementation of duties while the Chamber makes the final decision.

The recommendation for antidumping duties on PE imports in Brazil comes nine months after the country announced an investigation into North American products’ prices Nov. 13, 2024. The request was filed by local producer Braskem, the sole polyethylene and polypropylene producer in Brazil.

The new proposed deadline for a final decision on antidumping duties is Feb. 2, 2026, postponing the investigation for 18 months.

Market participants were surprised by the decision on preliminary duties, as rumors throughout July and August did not include decisions regarding the dumping investigation.

Most sources reported steady demand for US PE on the week ending Aug. 20, as prices remained in a downward trend and competitive against other regions, mostly against domestic product.

Platts, part of S&P Global Commodity Insights, last assessed the high-density blowmolding grade down $15 per metric ton on the week, to $890 per metric ton CFR Brazil Aug. 20, while the linear low-density grade was assessed down by $20 per metric ton on the week, to $965 per metric ton.

Although demand was reported to be higher than in the first semester, when anticipation for the duty was strong, some market participants still remained fearful of acquiring US products.

”No doubt it is a good moment to buy material at those prices,” said a market participant Aug. 20. “But there is always the ongoing fear of the dumping being implemented.”

Other sources believe the decision on implementing preliminary duties is political, as a response from the Brazilian government to negotiating 50% import tariffs applied by the US.

The US accounted for 70% of total PE imports to Brazil over the January-July period, while Canada was the third main supplier, with 5% of imports.

An uptick reported for PE imports in July was atypical when compared to the previous months, as imports remained in a downward trend, registering a 11% decrease when compared to the same year-ago period.

“This is purely a political decision,” added a second source. “Brazil wants to put this on the negotiation table with the US.”

Most sources remained cautious with the decision for the moment. “For now, no one has canceled orders, but I expect that to happen in the future,” said the second source.

“We need to still understand when this will be implemented,” said a third source. “Probably customers and traders will be on the run for other origins, such as Asia, South America and Egypt.”

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Songwon Industrial Co., Ltd. (Ulsan, South Korea) has announced distribution agreements aimed at enhancing its global network for polymer stabilizers, as per Chemweek.

To bolster its footprint in Australia and New Zealand, Songwon has expanded its existing partnership with TCL Hofmann (Victoria, Australia). This agreement grants TCL Hofmann exclusive distributorship rights for Songwon’s polymer stabilizers, allowing the company to better serve customers in these critical markets.

Additionally, Songwon has deepened its long-standing relationship with Biesterfeld Spezialchemie GmbH, a prominent distributor in Southern Europe. Under this expanded agreement, Biesterfeld will now distribute the full range of Songwon’s polymer stabilizers across several countries, including Romania, Bulgaria, Croatia, Montenegro, Bosnia & Herzegovina, Kosovo and North Macedonia.

In its recent second-quarter results, the company said polymer stabilizers faced ongoing headwinds from muted global demand, geopolitical uncertainty and US tariff concerns, resulting in lower volumes compared with the year-ago period.

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Siegfried AG has confirmed its 2025 outlook and continues to expect sales growth in the mid-single-digit percentage range in local currencies and a core EBITDA margin above 22%, as per Chemweek.

“In the first half of the year, Siegfried delivered according to plan, laying a solid foundation which allows us to confirm our 2025 outlook. This reflects the strength of our diversified customer base and our efficient operations,” said Marcel Imwinkelried, CEO of Siegfried.

The company has also confirmed its positive midterm outlook and continues to expect profitable growth above market, it said.

The company is on track to outpace market growth across the key segments, driven by the progress the company is making in the execution of its Evolve+ strategy presented in October 2024, Imwinkelried said.

The strategy aims to strengthen Siegfried’s position as a leading contract development and manufacturing organization through an increased focus on commercial, development and operational excellence, as well as value-accretive M&A.

The company’s first-half core net profit declined 8.4% year over year, to CHF65.7 million, due to negative currency effects, Siegfried said. Sales decreased by only 0.1%, to CHF619.5 million. Core EBITDA was 1.3% higher, at CHF133.9 million, while core operating profit increased 0.7%, to CHF89.9 million.

The company’s performance in the first half was supported by strong demand for development and manufacturing services for both drug substances and drug products across multiple markets, it said.

Operating profits increased despite inflationary pressures in the US and Germany, the final wave of customer de-stocking and adverse currency developments, the company added.

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