SONGWON Announces Price Increases for Its Polymer Stabilizers and Coatings Products

SONGWON, a leader in the development, production and supply of specialty chemicals, launched the first price adjustment in the new year on January 19, announcing price increases and freight surcharges for its polymer stabilizers and coatings products to cope with the impact of the current global logistics situation on costs and delivery times.

The price increase letter shows that the price increase will be effective immediately or be based on applicable contractual provisions, depending on the product and region. The level of freight surcharges will also depend on the product, region and freight route and will be effective immediately or based on applicable contractual provisions.

It is understood that SONGWON is headquartered in South Korea and is the second largest polymer stabilizer manufacturer in the world. The company's operations span the globe, with world-class manufacturing facilities, providing customers in more than 60 countries with high-performance products and optimal services that meet their respective needs.

SONGWON said that, as expected, ongoing geopolitical tensions, deteriorating economic conditions and inflationary pressures also continued throughout the year. This, coupled with a general slowdown in demand due to customer inventory reduction measures, affected the results of the Industrial Chemicals segment and the Performance Chemicals segment in the second half of 2023.

In the fourth quarter of 2023, the sales of the Industrial Chemicals segment of SONGWON were 183.636 billion won, a decrease of 15.6% compared with 217.679 billion won in the fourth quarter of 2022. Sales in fiscal year 2023 were 76,574.3 billion won, a decrease of 22.1% compared with 983.239 billion won in fiscal 2022. Compared with the fourth quarter of 2022, revenue of the Performance Chemicals segment also decreased by 22.3% compared with 79.931 billion won in the fourth quarter of 2022, is consolidated sales of 62.073 billion won. Sales in fiscal 2023 were 264.232 billion won, compared with 346.27 billion won in the same period in 2022, a revenue decrease of 23.7%.

For the Industrial Chemicals segment, the fourth quarter of 2023 was characterized by current macroeconomic headwinds, including a slow economic recovery in China and geopolitical constraints, as well as continued subdued demand and aggressive sales price pressure. In addition, lower raw material prices had a negative impact on the previously effective pricing formula mechanism, and global logistics issues also affected the segment's performance during the quarter.

Polymer Stabilizers sales increased in the fourth quarter of 2023 compared to the same period last year, but revenue declined due to lower prices. The business noted signs of improving demand later in the quarter as customer safety stocks were reduced, and although lower than 1HY/2023, overall delivered relatively good results.

Sales of fuel and lubricant additives were higher in the fourth quarter of 2023 than in the fourth quarter of 2022, driven by increased customer demand in the fourth quarter of 2023, with higher revenue from higher sales more than making up for lower raw material costs in formulation pricing. After a very weak September, coatings production recovered in October and remained stable through the remainder of the fourth quarter of 2023, although global demand remains weak.