Kraton Corporation operates as a global sustainable specialty chemicals company.
The company manufactures styrenic block copolymers (SBCs), specialty polymers, and high-value bio-based products primarily derived from pine wood pulping co-products.
In 2020, the company completed the sale of its Cariflex business to Daelim Industrial Co, Ltd. (subsequently renamed ‘DL Holdings Co., Ltd.’).
Segments
The company operates through two operating segments, Polymer and Chemical.
Polymer segment
Thi...
Kraton Corporation operates as a global sustainable specialty chemicals company.
The company manufactures styrenic block copolymers (SBCs), specialty polymers, and high-value bio-based products primarily derived from pine wood pulping co-products.
In 2020, the company completed the sale of its Cariflex business to Daelim Industrial Co, Ltd. (subsequently renamed ‘DL Holdings Co., Ltd.’).
Segments
The company operates through two operating segments, Polymer and Chemical.
Polymer segment
This segment consists of the company’s SBCs and other engineered polymers business.
Products and Commercial Applications
The company’s SBCs enhance the performance of numerous products by imparting greater flexibility, resilience, strength, durability, and processability; and are used in a wide range of applications, including adhesives, coatings, consumer and personal care products, sealants, lubricants, medical, packaging, automotive, paving and roofing, and footwear products. Prior to the sale of the company’s Cariflex business, under the Cariflex brand name, it also sold isoprene rubber (IR) and isoprene rubber latex (IRL), which are non-SBC products primarily used in applications, such as medical products, personal care, adhesives, tackifiers, paints, and coatings. As part of the sale, the company continues to produce and sell IR in accordance with the IRSA (Isoprene Rubber Supply Agreement) with DL Chemical Co., Ltd.
The company’s SBCs are high performance elastomers that are engineered for a wide range of applications. The company’s SBC products possess a combination of high strength and low viscosity, which facilitates ease of processing at elevated temperatures and high processing speeds. The company’s products can be processed in a variety of manufacturing applications, including injection molding, blow molding, compression molding, extrusion and hot melt, and solution applied coatings.
The majority of worldwide SBC production is dedicated to unhydrogenated styrenic block copolymers (USBCs), which are primarily used in paving, roofing, adhesives, sealants, coatings, and footwear applications. Hydrogenated styrenic block copolymers (HSBCs), which are significantly more complex and capital-intensive to manufacture than USBCs, are used in applications, such as lubricant additives, soft touch and flexible materials, personal hygiene products, medical products, automotive components, certain adhesive and sealant applications, and protective films.
The company’s Polymer segment products are manufactured and its commercial activities are organized in various product groups based upon polymer chemistry and process technologies: Performance Products; Specialty Polymers; IR sold exclusively to DL Chemical Co., Ltd. in accordance with the IRSA; and Cariflex (prior to March 6, 2020).
Performance Products
The company’s performance products are consisted of USBC product grades, which impart characteristics, such as resistance to temperature and weather extremes in roads and roofing; resistance to cracking, reduced road noise, and better water dispersion; and increased processing flexibility in adhesive formulations for packaging tapes and labels, and materials used in disposable diapers.
In paving and roofing applications, the company’s performance products primarily consist of styrene-butadiene-styrene (SBS) for use in modified asphalt applications, which in roofing applications produces stronger and more durable felts and shingles, and in paving applications enhances the strength and elasticity of asphalt-based paving compositions over an extended temperature range. In paving applications, the company’s polymers extend road life by allowing pavements to withstand heavy traffic loads and varying climate conditions, and its HiMA technology can reduce required inputs while extending road life in new road construction.
The company’s roofing applications provide a more sustainable alternative by increasing durability and system life. The company’s sustainable paving applications allow thinner full-depth pavements and longer road life, reducing raw materials required for paving and lessening pollution caused by congestion arising from frequent repairs of roads.
In personal care applications, the company’s performance products primarily consist of SBS and styrene-isoprene-styrene (SIS) for the manufacturing of ultra-thin stretchable films used for the production of diapers. In addition, the company’s SIS polymers are used in the lamination process for other personal care products.
The company’s SBCs are compatible with many other formulating ingredients.
Specialty Polymers
The company’s specialty polymers are consisted of HSBC products that are significantly more complex to produce than its performance products.
The company’s HSBCs can offer improved recyclability of polyethylene-terephthalate and polypropylene streams, and function as replacements for less sustainable alternatives, such as PVC, mainly in medical applications.
The company’s innovation-led growth strategy focuses on translating the inherent strengths of its product technologies, such as flexibility, resilience, impact and moisture resistance, and aesthetics (clarity and haptics) to target opportunities in which it can expand and/or have the potential to create new market spaces for its solutions.
Chemical segment
This segment manufactures and sells sustainable, high value products primarily derived from pine wood pulping co-products. The company refines and further upgrades two primary feedstocks, crude tall oil (CTO) and crude sulfate turpentine (CST), both of which are co-products of the wood pulping process, into value-added biobased specialty chemicals.
Products and Commercial Applications
The company refines CTO through a distillation process into four primary constituent fractions, such as tall oil fatty acids (TOFA); tall oil rosin (TOR); distilled tall oil (DTO); and tall oil pitch. The company further upgrades TOFA and TOR into derivatives, such as dimer acids, polyamide resins, rosin resins, dispersions, and disproportionated resins. The company refines CST into terpene monomer fractions, which can be further upgraded into specialty terpene resins. The various fractions and derivatives resulting from its CTO and CST refining process provide for distinct functionalities and properties, determining their respective applications and end markets. The company’s products derived from CTO and CST offer sustainable, non-genetically modified (GMO), bio-based alternatives.
The company’s Chemical segment is based predominantly on the refining and upgrading of CTO and CST. The company also has the capacity to upgrade hydrocarbon-based raw materials, such as alpha-methyl-styrene (AMS), and bio-based gum rosins, where appropriate; and is able to offer tailored solutions for its customers.
The segment’s products are manufactured and the company’s commercial activities are organized in various product groups based upon end markets and process technologies, such as Adhesives, Performance Chemicals, and Tires.
Adhesives
The company offers a broad range of products to service target adhesives submarkets, including rosin-based tackifiers for packaging and pressure-sensitive adhesive applications, terpene-based tackifiers for bookbinding, hygiene and pressure-sensitive adhesive applications, AMS resins for bookbinding and pressure-sensitive adhesive applications, and hot melt polyamides for flexible packaging, industrial applications, and road marking. The company seeks to position its renewable, non-GMO, bio-based offerings as the material of choice for producers seeking to meet consumer demand for products that do not use less sustainable and GMO materials, like hydrocarbon-based solutions. The company provides rosin based tackifiers with similar performance to hydrocarbon-based alternatives.
The company’s tackifiers are primarily used in hot melt adhesives, which are heavily used in the packaging submarket. Its focus in packaging is to improve its competitive position by introducing higher quality tackifiers that work in new polymer systems.
Roads and Construction
Within the pavement marking submarket, the company provides rosin-based binders for the thermoplastic pavement marking submarket and produces insoluble maleic-based tackifiers. The company’s advanced bio-based offerings in the pavement marking submarket enable its customers to formulate more durable road markings, improving sustainability by lessening raw material use.
Performance Chemicals
The company serves various submarkets with a wide product offering, providing value across several different applications, including among others, fuel additives, oilfield chemicals, mining fluids, coatings, and metalworking fluids and lubricants. The company’s products include:
TOFA: Compared to other fatty acids obtained from various vegetable and animal origins, TOFA has a chemical composition characterized by distinctive features used as components in various applications, such as coatings, mining, oilfield chemicals, and fuel additives.
Dimer Acids: The company’s dimer acids are used for the production of polyamide resins used in applications, such as epoxy coatings, flexographic inks, and high performance adhesive applications. In addition, dimer acids are building blocks in the production of corrosion inhibitors and emulsifiers used in the production and recovery of petroleum and natural gas. The company’s dimer acids compete with dimer acids derived from other feedstocks, such as rapeseed and cottonseed oil.
TOR: TOR is used in all major rosin applications for the manufacture of adhesives, inks, pavement markers, rubber, and paper.
DTO: DTO is a mixture of TOFA and rosin acids. The company’s DTO is primarily used as an emulsifier for metalworking fluids and lubricants, in which its product offers improved performance attributes, and in many cases, offers a more sustainable alternative by replacing less environmentally friendly hydrocarbon-based chemicals. In these applications, it is sometimes used in place of TOFA.
Terpene Fractions: The company supplies terpene fractions, alpha-pinene and beta-pinene; and upgrades them mainly as specialty tackifiers for the adhesives market and tread enhancers for the tires market.
Tires: The company sells a range of products that enhance the performance and manufacturing of high performance, winter, and all-season tires. The company’s terpene-based tread enhancement resins optimize wet grip of tire treads while maintaining reduced rolling resistance and enhanced durability, which contribute to improved vehicle fuel efficiency. The company markets its AMS-based tread enhancement additives through product attributes that include reduced rolling resistance, increased durability, wet grip enhancement, and exceptional compatibility with rubber compounds, especially solution styrene-butadiene rubber polymers. The company also sells TOFA, DTO, and rosins as processing aids, which provide select functionalities at various steps in the rubber and tire manufacturing process.
The company’s SYLVATRAXX terpene-base tread enhancement additives are made of up to 100% bio-renewable materials.
Sales and Marketing
The company sells its products through a number of channels, including a direct sales force, marketing representatives, and distributors. The company uses third-party marketing representatives and distributors in markets where they have existing platforms and are more cost effective in completing market coverage. The company has long-term relationships and a wide network of distributors across North America, Europe, Latin America, and the Asia Pacific.
Suppliers
For the company’s Chemical segment, it has an exclusive long-term supply contract with International Paper, which extends through 2027, under which it has agreed to sell to the company, and it has agreed to purchase from it, all of the CTO and CST produced at its paper mills. The company also maintains long-standing relationships with other major suppliers of its raw materials in the U.S. and Europe.
The company has long-term supply agreements with LyondellBasell Industries (LyondellBasell), International Paper, and others to supply its raw material needs in the U.S. and Europe.
Patents, Trademarks, Copyrights, and Other Intellectual Property Rights
The company had 787 granted patents and 252 pending patent applications as of December 31, 2021.
Governmental Regulation
Many of the company’s products and operations are subject to laws of the countries in which its products are manufactured or imported. These laws include the Registration, Evaluation, and Authorization of Chemicals (REACH) regulation in the European Union.
Seasonality
Seasonal changes and weather conditions typically affect the company’s sale of products in its paving, pavement marking, roofing, and construction applications, which generally results in higher sales volumes in the second and third quarters of the calendar year (year ended December 2021) compared to the first and fourth quarters of the calendar year. Sales for its other product applications tend to show relatively little seasonality.
History
The company was incorporated in 2009 under Delaware law. It was formerly known as Kraton Performance Polymers, Inc. and changed its name to Kraton Corporation in 2016.
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