Surging profit leads to stock split for Westlake Chemical

By Frank Esposito
Senior Staff Reporter

Published: March 14, 2014 12:48 pm ET
Updated: March 14, 2014 12:54 pm ET

Related to this story

Topics Pipe/Profile/Tubing Materials Suppliers
Companies & Associations Westlake Polymers Corp.

Robust financial results have led Westlake Chemical Corp. to initiate a 2-for-1 stock split.

The split will take effect March 18 for shareholders of record as of Feb. 28. They will be given one additional share for each share held at that time, officials with Houston-based Westlake said in a recent news release. The firm also is increasing its per-share dividend by 12 percent to 25.2 cents per share on a pre-split basis.

“These actions reflect the financial strength of the company,” President and CEO Albert Chao said in the release.

Westlake’s per-share stock price was near $50 in mid-2012, but it has soared since then as the firm’s profitability has increased, largely due to advantages provided by North American natural gas in the ethane and ethylene supply streams. The price crossed the $100 mark in mid-2013 and passed $130 in early February. It closed near $133 on March 13.

For full-year 2013, Westlake’s profit grew almost 60 percent to more than $610 million, as its sales climbed more than 5 percent to almost $3.8 billion. Sales in 2013 for Westlake’s olefins unit — including polyethylene — grew 2 percent to almost $2.6 billion. The firm’s vinyls unit — including PVC resin and pipe — saw sales increase almost 13 percent to more than $1.2 billion.

Westlake’s PVC pipe unit operates as North American Pipe Corp. That Houston-based business ranked fourth on a recent Plastics News ranking of North American pipe, profile and tubing makers.

In the fourth quarter of 2013, Westlake’s sales volume in pounds grew by almost 13 percent vs. the year-ago period, with olefins volume up 11 percent and vinyls volume up almost 16 percent.

The Chao family owns about 70 percent of stock in Westlake. In late 2012, Albert Chao and his siblings — James Chao and Dorothy Chao Jenkins — each had a net worth of $1.4 billion, largely from their company stock, according to the Bloomberg Billionaires Index. On Feb. 18, Albert Chao sold almost 4,900 shares of Westlake stock for almost $630,000, according to an SEC filing.

Westlake has reinvested in the firm as its good fortune has increased. In early 2013, Westlake paid $175 million in cash for the U.S. PVC pipe and foundation business of French firm Cie. De Saint-Gobain. Westlake also added 230 million pounds of ethylene feedstock at its plant in Lake Charles, La., last year and is adding 180 million pounds of ethylene capacity and almost 200 million pounds of PVC resin capacity at a plant in Calvert City, Ky. Most recently, Westlake on Feb. 19 opened a new 70-employee chlor-alkali plant in Geismar, La.

In early 2013, Albert Chao said that new technical developments in the natural gas industry “make expansion in North America attractive.”


Comments

Surging profit leads to stock split for Westlake Chemical

By Frank Esposito
Senior Staff Reporter

Published: March 14, 2014 12:48 pm ET
Updated: March 14, 2014 12:54 pm ET

Post Your Comments


Back to story

Market Reports

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Injection Molding Market Analysis & Processor Rankings

Plastics News BUNDLED package contains our in-depth Market Analysis of the Injection Molding segment. You will gain keen insight on current trends and our economic outlook.

As a BONUS this includes PN's updated 2014 database of North American Injection Molders RANKED by sales volume. Sort, merge, mail & prospect by end market, materials processed, region, # of plants and more.

Learn more

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Upcoming Plastics News Events

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 15, 2015 - September 17, 2015Plastics Caps & Closures - September 2015

More Events