Stepan Company expands AOS production by 25%

NORTHBROOK, Ill. - Stepan Company (NYSE: SCL), a manufacturer of specialty and intermediate chemicals with a market capitalization of $1.2 billion, has announced a 25% increase in its production capacity of Alpha Olefin Sulfonates (AOS), a key ingredient in various cleaning and personal care products. According to InvestingPro analysis, the company is currently trading below its Fair Value, suggesting potential upside for investors interested in this expansion news. This expansion is a result of strategic capital investments and process improvements at the company’s facilities in Millsdale, Illinois; Anaheim, California; and Winder, Georgia.

The company, which boasts the broadest network of AOS production sites in North America, has implemented targeted investments and enhancements to improve operational efficiency and flexibility, thus ensuring increased capacity and reliability for its customers. With annual revenues of $2.2 billion and an EBITDA of $193 million in the last twelve months, Stepan demonstrates significant operational scale in the specialty chemicals sector. AOS is a versatile surfactant used in detergents, personal care items, and industrial applications, favored for its fat-dissolving power, foam stability, and gentle cleansing properties. It is also environmentally friendly and is increasingly preferred in sulfate-free product formulations.

Brandon Suttle, Asset Manager – Sulfonation BM - Product Management at Stepan, expressed enthusiasm for the improvements, stating they not only boost production but also enhance the company’s ability to deliver high-quality AOS products to customers. Adriano Galimberti, Vice President & Surfactants North America, highlighted the company’s commitment to operational excellence and continuous improvement, which has driven these capacity-expanding investments.

Stepan Company is a leading merchant producer of surfactants and a supplier of polyurethane polyols used in thermal insulation and the CASE (Coatings, Adhesives, Sealants, and Elastomers) industries. With a network of production facilities across the Americas, Europe, and Asia, the company caters to a broad range of industries. Stepan is continuing to explore further improvements to expand capacity, develop specialty AOS products, and enhance product quality.

This announcement is based on a press release statement and contains forward-looking statements subject to risks and uncertainties, including those detailed in Stepan Company’s regulatory filings. Actual results may differ materially from those projected in these statements. Notable strengths include the company’s 54-year track record of consecutive dividend increases and positive analyst revisions for upcoming earnings. InvestingPro subscribers have access to additional insights, including 6 more ProTips and comprehensive financial analysis through the Pro Research Report, one of 1,400+ detailed company analyses available on the platform. The company’s common stock is traded under the symbol SCL on the New York Stock Exchange.

In other recent news, Stepan Company reported a significant increase in their financial performance for the first quarter of 2025. Adjusted net income surged by 32% year-over-year to $19.3 million, while adjusted EBITDA rose by 12% to $57.5 million. These results reflect Stepan’s strategic focus on expanding product lines and improving operational efficiency. The company also commenced operations at its new Pasadena site, which is expected to enhance product offerings. In a separate development, Stepan announced the sale of its Philippine manufacturing assets to Masurf, Inc., in line with its strategy to focus on core growth areas. The sale includes a tolling agreement allowing continued service to Southeast Asian customers. Additionally, Stepan remains cautiously optimistic about achieving full-year growth in adjusted EBITDA and net income, despite potential tariff impacts. Analysts from firms such as Seaport Research Partners have discussed the company’s strategic moves and their implications.

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