Luxembourg - Orion Engineered Carbons SA has seen its rubber segment sales and profits soar in the third quarter of 2018, thanks to higher prices and improved product mix.
In its quarterly statement 1 Nov, the carbon black supplier said its rubber segment had achieved a “record quarterly profit” at $17.9 million, 41.8% 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,” explained the 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% compared to the previous year, reflecting a strong demand in all regions.
Total rubber volumes were, however, down by 2.1% due to the South Korean closure.
Orion closed down a 45-kilotonne-per-annum (ktpa) carbon black facility in Bupyeong, South Korea, transferring production capacity to its other South Korean plant in Yeosu, last year.
The shut-down was targeted at improving operational efficiency and eliminating less profitable rubber grades, explained Painter.
Rubber segment revenue for the quarter also increased by 23.8% reaching just under $260 million.
This, Orion said, was primarily due to the pass through of 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.