Orion reports record profit in third quarter

LUXEMBOURG—Orion Engineered Carbons S.A. has seen its rubber segment sales and profits soar in the third quarter of 2018, a result it credits to higher prices and improved product mix.

In its quarterly statement released Nov. 1, the carbon black supplier said its rubber segment had achieved a "record quarterly profit" at $17.9 million, 41.8 percent up compared to the third quarter of 2017.

These were due to "a continued focus on improving the technical mix of rubber products, and stronger spot pricing supported by a robust market environment," said newly appointed CEO Corning Painter, who took over the position in October.

Excluding the impact of the closure of one plant in South Korea, rubber volumes increased by 2.7 percent compared to the previous year, reflecting a strong demand in all regions.

Total rubber volumes were, however, down by 2.1 percent, when the South Korean closure is considered.

Orion's closed plant, in Bupyeong, South Korea, had an annual capacity 45,000 metric tons. Its production capacity was transferred to its other South Korean plant in Yeosu.

The shut-down was targeted at improving operational efficiency and eliminating less profitable rubber grades, according to Painter.

Rubber segment revenue for the quarter also increased by 23.8 percent, reaching just under $260 million.

This, Orion said, was due primarily to the pass through of the higher cost of feedstock to customers with index-pricing agreements, improved product mix and base price increases. These more than offset negative foreign exchange rate impact and lower volumes, Orion noted.