MOSCOW (MRC) -- Stepan’s Q4 net income fell 44% year on year to USD17m amid global supply chain disruptions and inflationary pressures, said the company.
Furthermore, the prior-year Q4 benefited from a one-off USD13m insurance recovery related to a plant outage at Millsdale, Illinois in 2020. Operating income fell to USD32.4m, from USD43.3m in Q4 2020, primarily due to supply chain disruptions and lower sales volume.
Global Surfactant sales volume decreased 9% on lower demand for cleaning products in the consumer products business, partially offset by higher demand for products sold into the institutional cleaning and functional product end markets.
Operating income fell to USD12.9m, from USD22.8m, primarily due to supply chain disruptions and the non-recurrence of two events that benefited Q4 2020: the Millsdale insurance recovery, and a partial settlement received from the Chinese government as compensation for a government-mandated shutdown of Stepan’s China JV in 2012.
Operating income fell to USD2.1m, from USD5.2m, primarily attributable to order timing differences within Stepan’s food and flavour business and lower volume within the medium chain triglycerides (MCT) product line. "Looking forward, we believe that demand for our products will remain strong but that the company will continue to be challenged by the same external factors that impacted us during 2021," said CEO Quinn Stepan.
Surfactant volumes within the institutional cleaning, agricultural and oilfield markets are expected to grow, and “we also remain cautiously optimistic” that consumer consumption of cleaning, disinfection and personal wash products will improve slightly in 2022, after significant de-stocking in 2021, the CEO said.
The Polymer business is expected to grow as well in 2022 as long-term prospects for rigid polyols remain attractive because of energy conservation efforts and more stringent building codes, he said. In the Specialty Product business, results should improve slightly year on year, the CEO added.
As per MRC, Stepan plans to invest USD220m to build a new alkoxylation plant at its site in Pasadena, Texas. The new plant will provide “a flexible capacity” of 75,000 tonnes/year, capable of both ethoxylation and propoxylation, and better position the company to serve growing global demand in its surfactant and polymer businesses, it said.
As MRC informed before, Stepan conducted planned maintenance at its 90,000 tonnes/year phthalic anhydride (PA) plant Millsdale, Illinois, US, from early October to end-October, 2020.
Phthalic anhydride is widely used in for the production of paints and varnishes and plasticizers for PVC products. In a small amount it is used in the manufacture of rubber products, tires. In addition, it is used in the light, pharmaceutical and electrical industries.
MRC