Stepan Company expects challenges in Q4 similar to rest of the year

“Looking forward, we believe the fourth quarter of 2023 will face challenges similar to those experienced during the first nine months, including continued destocking within the agricultural end market, and the normal low seasonal demand for Rigid Polyols. We expect to reduce inventory levels further by year-end and we are nearing the end of our high capital spending phase. As we look toward 2024, we believe volumes and margins will improve due to continued recovery in Rigid Polyols demand, growth in Surfactant volume driven by new contracted business and lower raw material costs,” said Scott Behrens, president and CEO. “Given the continued challenging market conditions, we are expanding our cost reduction activities and expect to deliver $50 million in pre-tax savings in 2024, which will help offset future inflation and increased expenses associated with the planned commissioning of our new Pasadena alkoxylation assets. Our cost reduction activities are centered around workforce productivity and improved operational performance across our manufacturing network. A combination of anticipated market recovery, executing our strategic initiatives, and the aforementioned cost reductions, should position us to deliver earnings growth and positive free cash flow in 2024. We remain confident in our long-term growth and innovation initiatives.”