LyondellBasell, Eastman report 2023 sales and profits

Materials makers LyondellBasell Industries and Eastman Chemical Co. saw mostly lower financial results in 2023.

Houston-based LBI saw 2023 sales fall 18 percent to $41.1 billion, as profit slid 45 percent to just over $2.1 billion. Sales at the firm's Olefins & Polyolefins-Americas unit dropped 22 percent for the year to $11.3 billion, with operating profit down 25 percent to less than $1.7 billion. The firm is a major supplier of polyethylene and polypropylene resins.

LBI's Advanced Polymer Systems unit—which includes North America's largest compounding business—posted an operating loss of $261 million for the year, as sales fell 12 percent to $3.7 billon. The unit had operating profit of $16 million in 2022.

In a Feb. 2 news release, CEO Peter Vanacker said that in the fourth quarter, LBI's businesses "delivered exceptional cash conversion amid challenging market conditions while we rapidly moved forward with our strategy."

Officials said that during 2023, petrochemical markets "faced headwinds" from soft global demand, capacity additions and economic uncertainty. Markets "were broadly pressured" by weak demand for durable goods, which impacted margins in several LBI units, they added.

Looking to 2024, LBI officials said that in the first quarter, seasonally slow demand and economic uncertainty "are expected to provide continued headwinds for most businesses."

LBI had an extremely active year in 2023. In March, the firm acquired Italian compounder Mepol srl. Mepol, based in Riese Pio X, makes recycled compounds at plants in Italy and Poland. Then in April, LBI acquired full ownership of recycling plants in the Netherlands and Belgium. The firm had owned half of Quality Circular Polymers BV in a 50-50 joint venture with Veolia Environment SA of France. The QCP mechanical recycling plants make blends using household plastic waste.

In June, LBI announced the closing of a color concentrates plant in Akron, Ohio. Production from the site will be moved to a plant in San Luis Potosi, Mexico. In September, the firm announced the closing of a PP resin unit in Italy, removing more than a half billion pounds of annual production capacity from the market. The closing will affect one of LBI's two PP production units in Brindisi. Officials said that unit is the oldest of its kind in the world and has become uncompetitive.

November saw LBI finalize its investment decision to build the firm's first industrial-scale chemical recycling plant ins Wesselining, Germany. The project was announced in late 2022, when LBI and Germany-based 23 Oaks Investments established the Source One Plastics joint venture. The plant will have annual capacity of more than 110 million pounds and is designed to recycle the amount of plastic packaging waste generated by over 1.2 million Germans per year. Construction is to be completed by the end of 2025.

And LBI already is off to a fast start in 2024, recently acquiring a 35 percent stake in Saudi Arabia-based National Petrochemical Industrial Co. (NATPET) from Alujain Corp. for $500 million. LBI officials said the deal positions their firm to grow and upgrade its PP resin business through access to advantaged feedstocks, plus additional product marketing capacity in a strategic region.

NATPET operates almost 900 million pounds of annual PP production capacity in Yanbu, Saudi Arabia. LBI and Alujain also are assessing potential construction of a new propylene via propane dehydrogenation (PDH) unit and PP facility in Yanbu. Alujain is majority owner of NATPET and is a longtime licensee of LBI's Spheripol-brand PP production technology, which it uses in Yanbu.

At Kingsport, Tenn.-based Eastman, 2023 sales fell 13 percent to $9.2 billion, even though the firm's profit jumped almost 13 percent to $896 million. Sales at Eastman's Advanced Materials unit—including Tritan-brand copolyester—were down more than 9 percent to $2.9 billion, with earnings before interest and taxes (EBIT) off almost 9 percent at $343 million.

In a news release, Eastman CEO and Chairman Mark Costa said that his firm "delivered solid fourth-quarter results in a macroeconomic environment with weak primary demand. He added that lower demand was the result of seasonal declines and continued customer inventory destocking in some of Eastman's key end markets, including agriculture and medical.

Costa also said that Eastman "enters 2024 on an upbeat note" with the completed construction of the firm's methanolysis facility in Kingsport. "We just recently introduced plastic waste into the front end of the process and expect to produce on spec material and to generate revenue soon," he added. "We are building momentum as a leader in the circular economy, which adds to my confidence in the resilience of our earnings and cash flow going forward."