[Asia Economy Reporter Yoo Hyun-seok] Lionchemtech announced on the 17th that its operating profit for the third quarter reached 4.8 billion KRW, a 33.6% increase compared to the same period last year. Although sales decreased by 17.8% to 32.1 billion KRW, quarterly net profit rose by 60.6% to 5.4 billion KRW.
Lionchemtech is a specialized company in artificial marble and synthetic wax. In the third quarter, the sales of high-end artificial marble, Engineered Stone (E-stone), led to improved profitability. Third-quarter E-stone sales grew by 76.5% compared to the previous quarter and by 22.5% year-on-year.
Engineered Stone is used as a premium building material due to its strength and design being close to natural marble. As demand for Engineered Stone in the construction market increased, Lionchemtech proactively invested 10 billion KRW in a new production line for Engineered Stone in 2015.
Meanwhile, the low level of crude oil prices, a basic raw material, also enabled cost reduction. Lionchemtech uses refined materials from crude oil such as Alumina Trihydrate (ATH) and Polyethylene (PE). In the third quarter, West Texas Intermediate (WTI) crude oil prices remained stable around 40 dollars per barrel.
A company official stated, “Factory operations, which had been shortened due to the impact of the novel coronavirus infection (COVID-19), are now running at full capacity,” adding, “As productivity recovers with increased factory utilization, sales are expected to return to growth in the fourth quarter.” The official also added, “Demand for eco-friendly adhesive materials is being met mainly by large European adhesive companies.”
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