#USA #Northbrook #Stepan Company #Manufacturing Efficiency #Project Catalyst

Stepan Company Unveils Project Catalyst

In a significant move to streamline its global operations, Stepan Company has announced an ambitious initiative dubbed Project Catalyst. This comprehensive plan is designed to achieve approximately $100 million in pre-tax savings over the next two years, aiming to enhance efficiency across its global manufacturing footprint and optimize business operations.

Objectives of Project Catalyst

The core goals of Project Catalyst include:

• - Optimizing Manufacturing Footprint: The first step involves consolidating manufacturing operations to more efficient and modern facilities. This consolidation aims to reduce costs and enhance productivity by leveraging the latest technology and operational practices across the company’s network.
• - Enhancing Operational Efficiency: The plan outlines a thorough review and improvement in manufacturing processes as well as procurement strategies. By streamlining these operations, Stepan seeks to reduce costs further, focusing on smarter planning and execution.
• - Organizational Effectiveness: Another key aspect of the initiative is to promote greater accountability within the company. This will be achieved by clearly defining responsibilities across various business functions and aligning resources to capture emerging market opportunities effectively.

Site Closures and Asset Decommissioning

As part of Project Catalyst, significant changes will occur in Stepan's operational structure. The company plans to shut down its Fieldsboro, New Jersey site, primarily due to a persistent decline in demand for commodity surfactants, which are essential in products like laundry detergents. In addition, certain assets at its facilities in Elwood, Illinois, and Stalybridge, UK, will also be decommissioned to enhance network efficiency. These restructuring efforts are expected to conclude by mid-2026, consolidating operations into existing sites and maintaining supply for Stepan's customers.

Financial Impact and Projections

Stepan anticipates incurring restructuring charges between $70 million and $80 million in 2026. Of this, approximately $52 million to $62 million is expected to be recorded in the first quarter. The financial implications of these changes are projected to range from $29 million to $44 million in cash impacts, alongside $58 million to $62 million in non-cash effects. The anticipated costs will include various restructuring expenses such as asset write-downs and decommissioning costs, vital for transitioning to a more efficient operational model.

Leadership Insights

Luis E. Rojo, the President and CEO of Stepan, emphasized the importance of Project Catalyst in reinforcing the company’s competitive positioning in a rapidly changing market. He stated, "This initiative is crafted to not only offset inflationary pressures and other challenges but also to ensure that we retain the agility and resources to provide exceptional service and value to our customers. These savings will be a crucial element in supporting strategic investments targeting growth."

About Stepan Company

Headquartered in Northbrook, Illinois, Stepan Company stands out as a leading manufacturer of specialty and intermediate chemicals. Its products are widely used across various industries, including cleaning and disinfection, agriculture, and insulation markets. As a recognized merchant producer of surfactants, Stepan plays a vital role in consumer and industrial cleaning sectors.

Project Catalyst is just one of the strategic moves Stepan is implementing as it navigates the complexities of modern manufacturing and global market dynamics. As it consolidates its operations, it aims to set a foundation for sustainable growth while continuing to deliver innovative solutions to its customers.

For more information about Stepan Company and its initiatives, visit www.stepan.com.