Stepan Company Boosts Alpha Olefin Sulfonates (AOS) Production Capacity by 25% Pounds Annually

Rhea-AI Summary

Stepan Company (NYSE: SCL) has announced a 25% expansion in its Alpha Olefin Sulfonates (AOS) production capacity through strategic capital investments and process improvements across its North American facilities in Millsdale, Illinois; Anaheim, California; and Winder, Georgia. AOS, a versatile surfactant used in detergents, personal care products, and industrial applications, is particularly valued for its fat-dissolving power, foam stability, and environmentally friendly properties. The expansion enhances operational efficiency, flexibility, and reliability for customers. The company continues to explore additional improvements to expand capacity, develop specialty AOS products, and enhance product quality, positioning itself to meet growing market demands for sulfate-free products in various industries including personal care, cleaning, oilfield, agriculture, and construction sectors.

Positive

• 25% increase in AOS production capacity strengthens market position and ability to meet growing demand
• Strategic expansion across multiple North American facilities improves operational efficiency and reliability
• Enhanced capacity to serve growing market for environmentally-friendly, sulfate-free products
• Improved operational flexibility and product quality through targeted capital investments

Negative

• Capital expenditure requirements for facility improvements may impact short-term financials
• Potential market oversupply if demand doesn't match increased production capacity

Insights

Chemical Industry Analyst

Stepan's 25% AOS capacity expansion strengthens market position in high-demand surfactants while improving operational flexibility and reliability.

Stepan's announcement of a 25% capacity increase for Alpha Olefin Sulfonates (AOS) represents a strategic production enhancement across their North American manufacturing network. This capacity expansion, implemented at facilities in Millsdale, Illinois; Anaheim, California; and Winder, Georgia, combines both targeted capital investments and process optimizations to improve operational efficiency.

The significance of this expansion lies in the versatility and growing demand for AOS products. These specialized surfactants serve multiple high-value markets including consumer cleaning products, personal care, and industrial applications. With consumers increasingly demanding sulfate-free formulations in personal care, AOS surfactants offer formulators an attractive alternative that provides robust performance characteristics including foam stability and cleansing properties.

From an operations perspective, Stepan's multi-site approach to this expansion provides three distinct advantages: increased production volume, enhanced manufacturing flexibility, and improved supply chain reliability. The distributed production model creates redundancy that helps mitigate single-point failure risks while allowing the company to optimize production based on regional demand patterns and logistics considerations.

This expansion aligns with broader industry trends toward specialty chemicals with differentiated performance attributes. The mention of continued exploration for further capacity expansion and specialty AOS product development suggests this is part of a longer-term strategic initiative rather than a one-time enhancement. For a specialty chemicals manufacturer like Stepan, incrementally expanding production capacity for high-margin, in-demand products like AOS represents a focused approach to capital allocation that can drive improved asset utilization rates.

NORTHBROOK, Ill., June 3, 2025 /PRNewswire/ -- Stepan Company (NYSE: SCL) today reported:

Stepan Company a global leader in specialty and intermediate chemicals, announced a significant increase in its production capacity for Alpha Olefin Sulfonates (AOS). Through strategic capital investments and process improvements, Stepan has expanded its AOS capacity by 25%.

With the broadest network of sites and plants producing AOS in North America, Stepan continues to expand its production capacity through strategic initiatives at its Millsdale, Illinois; Anaheim, California; and Winder, Georgia facilities. These efforts included targeted capital investments and process enhancements that have strengthened operational efficiency across multiple locations—delivering increased capacity, greater flexibility, and enhanced reliability for Stepan's customers.

"We are excited to announce these enhancements to our AOS production capabilities," said Brandon Suttle, Asset Manager – Sulfonation BM - Product Management. "These improvements not only increase our capacity but also position us to better serve our customers with high-quality AOS products."

Stepan's Alpha Olefin Sulfonates are versatile surfactants used in detergents, personal care products, cleaning and industrial applications. Known for their fat-dissolving power, foam stability, and gentle cleansing properties, AOS is ideal for green bathroom cleaners, daily shower cleaners, liquid dishwashing detergents, shampoos, body washes, and facial cleansers. With the rise in demand for sulfate-free products, AOS is a preferred choice for formulators. It offers environmental benefits and produces dense, stable foam, making it appealing for luxurious lather. AOS is also used in Oilfield, Agriculture, Construction, and Emulsion Polymerization industries.

Adriano Galimberti, Vice President & Surfactants North America at Stepan, added, "Our commitment to continued improvement and operational excellence has enabled us to prioritize these investments to meet the growing demands of our customers."

Stepan continues to explore additional improvements to further expand capacity, develop specialty AOS products, and enhance product quality.

Corporate Profile

Stepan Company is a major manufacturer of specialty and intermediate chemicals used in a broad range of industries. Stepan is a leading merchant producer of surfactants, which are the key ingredients in consumer and industrial cleaning and disinfection compounds and in agricultural and oilfield solutions. The Company is also a leading supplier of polyurethane polyols used in the expanding thermal insulation market, and CASE (Coatings, Adhesives, Sealants, and Elastomers) industries.

Headquartered in Northbrook, Illinois, Stepan utilizes a network of modern production facilities located in North and South America, Europe and Asia.

The Company's common stock is traded on the New York Stock Exchange (NYSE) under the symbol SCL. For more information about Stepan Company please visit the Company online at www.stepan.com

Certain information in this news release consists of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include statements about Stepan Company's plans, objectives, strategies, financial performance and outlook, trends, the amount and timing of future cash distributions, prospects or future events and involve known and unknown risks that are difficult to predict. As a result, Stepan Company's actual financial results, performance, achievements or prospects may differ materially from those expressed or implied by these forwardlooking statements. In some cases, you can identify forward-looking statements by the use of words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "guidance," "predict," "potential," "continue," "likely," "will," "would," "should," "illustrative" and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by Stepan Company and its management based on their knowledge and understanding of the business and industry, are inherently uncertain. These statements are not guarantees of future performance, and stockholders should not place undue reliance on forward-looking statements. There are a number of risks, uncertainties and other important factors, many of which are beyond Stepan Company's control, that could cause actual results to differ materially from the forward-looking statements contained in this news release. Such risks, uncertainties and other important factors include, among other factors, the risks, uncertainties and factors described in Stepan Company's Form 10-K, Form 10-Q and Form 8-K reports and exhibits to those reports, and include (but are not limited to) risks and uncertainties related to accidents, unplanned production shutdowns or disruptions in manufacturing facilities; reduced demand due to customer product reformulations or new technologies; our inability to successfully develop or introduce new products; compliance with laws; our ability to identify suitable acquisition candidates and successfully complete and integrate acquisitions; global competition; volatility of raw material and energy costs and supply; disruptions in transportation or significant changes in transportation costs; downturns in certain industries and general economic downturns; international business risks, including currency exchange rate fluctuations, changes in global trade policies, including tariffs; legal restrictions and taxes; unfavorable resolution of litigation against us; maintaining and protecting intellectual property rights; our ability to access capital markets; global political, military, security or other instability; costs related to expansion or other capital projects; interruption or breaches of information technology systems; our ability to retain executive management and key personnel; and our debt covenants. These forward-looking statements are made only as of the date hereof, and Stepan Company undertakes no obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

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SOURCE Stepan Company

FAQ

What is the percentage increase in Stepan Company's AOS production capacity?

Stepan Company has increased its Alpha Olefin Sulfonates (AOS) production capacity by 25% through strategic capital investments and process improvements.

Which Stepan Company facilities are involved in the AOS production expansion?

The expansion involves Stepan's facilities in Millsdale, Illinois; Anaheim, California; and Winder, Georgia.

What are the main applications for Stepan's Alpha Olefin Sulfonates (AOS)?

AOS is used in detergents, personal care products (shampoos, body washes, facial cleansers), cleaning products, and industrial applications including oilfield, agriculture, construction, and emulsion polymerization industries.

Why is SCL expanding its AOS production capacity?

The expansion aims to meet growing market demands, particularly for sulfate-free products, while improving operational efficiency, flexibility, and reliability for customers.

What are the key benefits of Alpha Olefin Sulfonates (AOS)?

AOS offers fat-dissolving power, foam stability, gentle cleansing properties, environmental benefits, and produces dense, stable foam, making it ideal for various cleaning and personal care applications.