Stepan Company (SCL) 16th Annual Midwest Ideas Conference summary

Strategic focus and growth markets

• Emphasis on priority growth markets with strategic tailwinds, including agriculture, oil-fed chemicals, construction, personal care, and insulation products.

• Expansion of customer base, especially tier two and three customers, across all end markets.

• Significant investments in new facilities, notably the Pasadena, Texas alcoxylation plant, to support future growth.

• Global manufacturing footprint with 60% of sales in North America, followed by Europe and other regions.

• Focus on operational excellence and cost optimization across the network.

Business segments and market drivers

• Operates in three segments: Surfactants (largest), Polymers (second largest), and Specialty Products (niche focus).

• Surfactants serve six key end markets, including agriculture, oil, construction, personal care, cleaning, and laundry.

• Polymers business driven by demand for insulation and regulatory requirements, especially in the EU.

• Specialty Products cater to beverages, energy drinks, and baby formula, leveraging advanced R&D.

• Growth in agriculture and oil-fed surfactants, and rigid polymers, with double-digit increases in early 2024.

Innovation, R&D, and customer expansion

• Over 230 chemists and 14 application centers globally, with 33 new products launched in 2024 (10% of revenue).

• Customer-centric innovation includes technical service, formulation expertise, and process technology.

• Added 1,800 new surfactant customers in the past year, with a sustained trend of customer base expansion.

• Focus on value-added services for smaller customers, with 22,000 potential new and existing customers identified.

• Continuous trend of adding 400+ new customers per quarter in 2024.