SONGWON Industrial Group ends a good year with steady growth
SONGWON Industrial Group released its financial results for FY2016. In terms of sales, it was a very positive year overall for the organization with almost all product lines contributing to the Group’s growth despite the ongoing challenging economic environment.
The company achieved sales revenues of 694,326 Mil. KRW and a net profit of 42,244 Mil. KRW. Within polymer stabilizers, the One Pack Systems (OPS) business was the SONGWON’s growth leader in 2016, with its world-class OPS facility in Abu Dhabi coming onstream in January and the new JV OPS plant in Qingdao, China successfully commissioned in November. Sales in plasticizers and tin intermediates also soared and SONGWON recorded a 6.1% increase in overall sales over the previous year.
In Q4 2016, both SONGWON’s EBITDA and EBIT margins increased to 15.2% and 9.7% respectively. For the full year 2016, EBITDA increased to 16.4% and EBIT to 11.4%. In the first six months of 2016, revenues were supported by favorable exchange rates. However, in the second half of the year the overall currency had a slightly negative effect.
Although its prices remained stable in the first half of 2016, SONGWON did see some minor price erosion on some of its main products as the result of additional antioxidant capacity coming on stream. SONGWON also saw the traditional decline in overall demand towards the end of the year caused by customers’ usual year-end destocking activities.
Once again, SONGWON recorded stable production at high utilization rates throughout the year, and also successfully implemented a capacity expansion in its Maeam plant in Korea. Throughout 2016, SONGWON continued to drive organic growth across all of its business areas by further leveraging its industry expertise and bringing new innovations to the market. The company has been successfully executing its strategy to transform SONGWON into a leading specialty chemicals company, and will continue its ongoing investment in the improvement of its operational efficiency to meet customers’ needs. In the near future, SONGWON anticipates seeing moderate to high growth in polymer stabilizers resulting from an increase in demand for plastics and polyolefins supported by large investments in capacity by customers, particularly in China, MEA and North America. The Group also forecasts a solid restart in the overall demand in Q1 2017.
Looking ahead, SONGWON expects its new products lines and the innovations it launched in 2016, to further enhance growth possibilities and positively contribute to SONGWON’s overall performance. SONGWON is confident that it is well-prepared to navigate the challenges facing the industry, and well-positioned to meet and exceed its strategic targets.
“We will continue to focus on operational excellence, strengthening SONGWON’s development capability and building an innovative, well-balanced portfolio while keeping an eye on growth and achieving solid financial results and a sound balance sheet for our stakeholders,” said Hans-Peter Wüest, Chief Financial Officer.
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