Avient expects return to normal for compounding market in 2024

Like many compounders and concentrate makers, Avient Corp. is looking for growth and stability in 2024.

"We expect growth [in 2024], with the view that destocking is nearing an end in most end markets," Woon-Keat Moh said in a recent email interview with Plastics News. Moh is president of the Americas and Asia regions for the Color, Additives & Inks unit of Avon Lake, Ohio-based Avient.

"That said, at this point, growth will likely be modest as customers remain cautious about the overall macro environment," he added.

Avient executive Chris Pederson said via email that he also expects growth in 2024. He added that keys to growth include inventory levels coming back into balance, continued adoption of sustainable solutions, lightweight composites and government infrastructure programs that support renewable energy. Pederson is president of Avient's Specialty Engineered Materials unit.

Avient is one of North America's largest producers of compounds, concentrates, composites and protective fibers. The firm posted sales of $3.4 billion in 2022.

Both the CAI and SEM units posted lower financial results in the third quarter of 2023. Third-quarter CAI sales were down 14 percent vs. the same quarter in 2022, with operating income down 6 percent. SEM saw a third-quarter sales loss of 3.5 percent, with operating profit also down 3.5 percent.

Sales into the transportation market have been a bright spot for CAI in 2023.

"Transportation has been outperforming our expectations and other end markets," Moh said. "Last year, this end market was hampered by computer chip shortages. As chips become more available this year, automotive manufacturers are producing more cars that incorporate our additives than in 2022."

Pederson said that Avient's 2022 acquisition of the Dyneema-brand fiber business gave the firm "an important global market position" in the defense industry.

"We're a key solution provider for personal and asset protection," he added. "The defense market has been positive in 2023. We also find that our Dyneema customers are interested in our formulated engineered and thermoplastic polymers, fibers and composites products."

Providing sustainable materials also has provided a boost to both the CAI and SEM units.

"Sustainability is one of our key growth drivers," Moh said. "As we continue to launch new solutions … we are seeing an increase in sustainable solutions in our product mix. As a company, sustainable solutions represent 35 percent of our sales."

Pederson added that, over the last three years, Avient has introduced more than 40 new product lines offering recycled content, bio-content, lightweighting and reduced carbon footprint.

"We added to our lightweight composites portfolio with the acquisition of Dyneema, and we continue to see market adoption for lightweighting solutions to replace metal in many markets," he said.

Managing inventory — and getting it back to normal levels — also has been a challenge for Avient in 2023, although both Pederson and Moh said inventory levels now are trending in the right direction.

"Inventory levels for our customers vary across markets," Pederson said. "Many were destocking throughout 2023, while energy and defense industries seemed more balanced."

"The health care segment has received a lot of attention and is still reducing inventory build-up associated with COVID-19 and supply chain challenges from 2022."

Moh added that the transportation market "is closer to a more normalized inventory level." He also said that in packaging — CAI's largest end market — Avient "is still observing destocking, but it's nearing an end."