Olin Corporation (Olin) operates as a vertically integrated global manufacturer and distributor of chemical products and a leading U.S. manufacturer of ammunition.
Segments
The company’s operations are concentrated in three business segments: Chlor Alkali Products and Vinyls, Epoxy, and Winchester. All of the company’s business segments are capital-intensive manufacturing businesses.
Chlor Alkali Products and Vinyls segment
The Chlor Alkali Products and Vinyls segment manufactures and sells...
Olin Corporation (Olin) operates as a vertically integrated global manufacturer and distributor of chemical products and a leading U.S. manufacturer of ammunition.
Segments
The company’s operations are concentrated in three business segments: Chlor Alkali Products and Vinyls, Epoxy, and Winchester. All of the company’s business segments are capital-intensive manufacturing businesses.
Chlor Alkali Products and Vinyls segment
The Chlor Alkali Products and Vinyls segment manufactures and sells chlorine and caustic soda, ethylene dichloride and vinyl chloride monomer, methyl chloride, methylene chloride, chloroform, carbon tetrachloride, perchloroethylene, hydrochloric acid, hydrogen, bleach products and potassium hydroxide, which represented 58% of 2023 sales.
Products and Services
The company has been involved in the chlor alkali industry for approximately 130 years and considers itself the leading global chlor alkali and derivatives producer.
Chlorine is used as a raw material in the production of thousands of products, including vinyls, urethanes, epoxy, water treatment chemicals and a variety of other organic and inorganic chemicals. A significant portion of chlorine production is consumed in the manufacturing of vinyls intermediates, ethylene dichloride (EDC) and vinyl chloride monomer (VCM), both of which the company’s Chlor Alkali Products and Vinyls segment produces. A large portion of the company’s EDC production is utilized in the production of VCM, but the company is also one of the largest global participants in merchant EDC sales. In addition to marketing Olin produced EDC, the company also purchases EDC for re-sale on a global basis. EDC and VCM are precursors for polyvinyl chloride (PVC), a material used in applications such as vinyl siding, pipe, pipe fittings and automotive parts.
The company’s Chlor Alkali Products and Vinyls segment is one of the largest global marketers of caustic soda, including caustic soda produced by Olin, and globally produced material purchased by Olin for re-sale. The diversity of caustic soda sourcing allows the company to supply customers worldwide. Caustic soda has a wide variety of end-use applications, the largest of which includes water treatment, alumina, pulp and paper, urethanes, detergents and soaps and a variety of other organic and inorganic chemicals.
The company’s Chlor Alkali Products and Vinyls segment also includes the company’s chlorinated organics business, which is a significant global producer of chlorinated organic products that include chloromethanes (methyl chloride, methylene chloride, chloroform and carbon tetrachloride) and chloroethanes (perchloroethylene). The company’s chlorinated organics business participates in both the solvent segment and the intermediate segment of the global chlorocarbon industry with a focus on sustainable applications and in applications where the company can benefit from its cost advantages. Intermediate products are used as feedstocks in the production of fluoropolymers, fluorocarbon refrigerants and blowing agents, silicones, cellulosics and agricultural chemicals. Solvent products are sold into end uses, such as surface preparation, dry cleaning, pharmaceuticals and regeneration of refining catalysts. This business’s unique technology allows the company to utilize both hydrogen chloride, the gaseous form of hydrochloric acid, and chlorinated hydrocarbon byproducts (RCls), produced by the company’s other production processes, as raw materials in an integrated system.
The company also manufactures and sells other chlor alkali-related products, including hydrochloric acid, sodium hypochlorite (bleach) and potassium hydroxide. These products, along with chlorinated organics products and epoxy resins, generally consume chlorine as a raw material creating downstream applications that upgrade the value of the ECU. The company’s industry leadership in the production of chlorinated organics and epoxy resins, as well as other products, offers the company multiple outlets for its captive chlorine.
The company’s products are delivered by pipeline, marine vessel, deep-water and coastal barge, railcar and truck. The company owns, operates, and leases a geographically dispersed terminal infrastructure at its production sites and other locations that expand its geographic coverage and enhance the company’s service capabilities. At the company’s largest integrated product sites, the company’s deep-water access allows the company to reach global markets.
Blue Water Alliance (BWA), the company’s joint venture with Mitsui & Co., Ltd. (Mitsui), began operations during 2023. BWA is an independent global trader of ECU-based derivatives, focused on globally traded caustic soda and ethylene dichloride. Olin holds 51% interest and exercises control in BWA. BWA brings together Mitsui's industry-leading global logistics, long-established supplier and customer relationships, and breadth of product portfolio with Olin's scale, North American export capability, extensive global terminal network, and production flexibility across the ECU portfolio.
The company’s Chlor Alkali Products and Vinyls segment maintains a reliable supply of key raw materials. Electricity, salt, ethylene and methanol are the primary raw materials for the company’s products. Electricity is the single largest raw material component in the production of Chlor Alkali Products and Vinyls products. Approximately 72% of the company’s electricity is generated from natural gas or hydroelectric sources. The company satisfies its electricity needs through a combination of market power, long-term contracts and the operation of the company’s own power assets, which allow for cost differentiation at specific U.S. manufacturing sites. Approximately 74% of the company’s salt requirements are met by internal supply. Ethylene is primarily supplied for the vinyls business under a long-term supply arrangement whereby the company receives ethylene at integrated producer economics. Methanol is primarily sourced from large domestic and international producers. The high-volume nature of the chlor alkali industry places emphasis on cost management, and the company’s scale, integration and raw material positions make the company one of the low-cost producers in the industry.
Strategies
This segment’s strategies are to leverage the company’s diverse and flexible chlor alkali derivatives portfolio via the company’s strategic operating model to continually mitigate exposure and maximize value from the entire ECU by managing the company’s production rates to the prevailing weaker side of the ECU; and participate in global trade flow of the products the company markets.
Epoxy segment
The Epoxy segment produces and sells a full range of epoxy materials and precursors, including aromatics (acetone and phenol), allyl chloride, epichlorohydrin, liquid epoxy resins, solid epoxy resins and systems and growth products, such as converted epoxy resins and additives, which represented 20% of 2023 sales.
Products and Services
The Epoxy business was one of the first major manufacturers of epoxy products, and has continued to build on more than half a century of history through product innovation and technical excellence. The Epoxy segment is one of the largest fully integrated global producers of epoxy resins, curing agents and intermediates. The Epoxy segment’s cost position benefits from integration into low-cost feedstocks (including chlorine, caustic soda, allylics and aromatics). The Epoxy segment produces and sells a full range of epoxy materials and precursors, including aromatics (acetone and phenol), allylics, such as allyl chloride (Allyl) and epichlorohydrin (EPI), resins such as liquid epoxy resins (LER) and solid epoxy resins (SER) and systems and growth platform products such as converted epoxy resins (CER) and additives.
The Epoxy segment serves a diverse array of applications, many of which are focused on improving sustainability and lowering greenhouse emissions, including wind energy, electrical laminates, consumer goods and composites, as well as numerous applications in civil engineering and protective coatings. The Epoxy segment has important relationships with established customers, some of which span decades. The segment sells primarily in North America and Western Europe. The segment products are delivered primarily by marine vessel, deep-water and coastal barge, railcar and truck.
Allyl is used not only as a feedstock in the production of EPI, but also as a chemical intermediate in multiple industries and applications, including water purification chemicals. EPI is primarily produced as a feedstock for use in the business’s epoxy resins and is also sold in the merchant market. LER is manufactured in liquid form and cures with the addition of a hardener into a three-dimensional thermoset solid material, offering a distinct combination of structural strength, adhesion, electrical insulation, thermal or chemical resistance and corrosion protection that is well-suited to coatings and composites applications. SER is processed further with bisphenol, which is produced internally to meet specific end-market applications. While LER and SER are sold externally, a significant portion of LER production is further converted through the company’s systems and growth platform into CER and other additive products where value-added modifications produce higher margin resins for specific customer applications.
The Epoxy segment’s principal raw materials are chlorine, caustic soda, benzene, propylene and aromatics, which consist of phenol and acetone. The company’s Epoxy segment maintains a reliable supply of certain key raw materials, such as benzene and propylene. The Epoxy segment’s production economics benefit from its integration into chlor alkali and aromatics which are key inputs in epoxy production. This fully integrated structure provides both access to low-cost materials and significant operational flexibility. The Epoxy segment operates an integrated aromatics production chain producing phenol and acetone for internal consumption and external sale. The Epoxy segment’s consumption of chlorine enables the Chlor Alkali Products and Vinyls segment to generate caustic soda production and sales. Chlorine and caustic soda used in the company’s Epoxy segment are transferred at cost from the Chlor Alkali Products and Vinyls segment.
Strategies
This segment’s strategy is to focus on systems and growth platforms.
Winchester segment
The Winchester segment produces and sells sporting ammunition, reloading components, small caliber military ammunition and components, industrial cartridges and clay targets, which represented 22% of 2023 sales.
Products and Services
Winchester is a premier developer and manufacturer of small caliber ammunition for sale to domestic and international retailers (commercial customers), law enforcement agencies and domestic and international militaries. The company is a leading U.S. producer of ammunition for recreational shooters, hunters, law enforcement agencies and the U.S. Armed Forces. Winchester also manufactures industrial products that have various applications in the construction industry and, beginning October 2023, additionally manufactures clay targets for recreational and competitive shooters.
On October 1, 2023, Olin acquired the assets of White Flyer Targets, LLC (White Flyer) from Reagent Diversified Holdings, Inc. (Reagent). White Flyer is North America’s preeminent leader in recreational trap, skeet, and sporting clay targets. White Flyer was combined with the Winchester Ammunition business.
On October 1, 2020, Winchester assumed full management and operational control of the Lake City Army Ammunition Plant (Lake City) in Independence, MO. The U.S. Army selected Winchester to operate and manage Lake City in September 2019. The contract is for the production of small caliber military ammunition, including 5.56mm, 7.62mm, and .50 caliber rounds, as well as certain cartridges and casings. The contract also allows for the production of certain ammunition for commercial customers. The contract has an initial term of seven years and may be extended by the U.S. Army for up to three additional years.
The company’s legendary Winchester product line includes all major gauges and calibers of shotgun shells, rimfire and centerfire ammunition for pistols and rifles, reloading components and industrial cartridges. The company is a leading U.S. supplier of small caliber commercial ammunition.
Winchester has strong relationships throughout the sales and distribution chain and strong ties to traditional dealers, distributors, and gun clubs. Winchester has also built its business with key high-volume mass merchants and specialty sporting goods and outdoor merchandise retailers. Winchester has consistently developed industry-leading ammunition, which is recognized in the industry for manufacturing excellence, design innovation and consumer value.
During 2022 and 2023, the U.S. Army awarded Winchester the second and third years of a five-year contract to manufacture 5.56 mm, 7.62 mm and .50 caliber rifle ammunition under the third consecutive ‘Second Source’ ammunition contract Winchester has received from the U.S. Army.
During 2022, the U.S. Army awarded Winchester a new five-year pistol contract for .38 caliber, .45 caliber and 9mm handgun ammunition, maintaining Winchester’s longstanding position as the leading supplier of pistol ammunition to the U.S. military.
During 2022, the U.S. Army awarded Winchester contracts to support the 6.8mm Next Generation Squad Weapons (NGSW) program at Lake City, including the design of the NGSW ammunition manufacturing facility. During 2023, the U.S. Army awarded Winchester a contract to manufacture, test and deliver five million rounds of 6.8mm ammunition.
During 2023, the U.S. Army awarded Winchester contracts to develop and manufacture multiple high-performance cartridges at Lake City, including nearly two million rounds of .50 Caliber Saboted Light Armor Penetrator (SLAP) ammunition.
Winchester purchases raw materials, such as copper-based strip and ammunition cartridge case cups and lead from vendors, pursuant to multi-year contracts, based on a conversion charge or premium. These conversion charges or premiums are in addition to the market prices for metal as posted on exchanges, such as the Commodity Exchange, or COMEX, and London Metals Exchange, or LME. Winchester’s other main raw material is propellant, which is purchased predominantly from one of the U.S.’s largest propellant suppliers.
Strategies
This segment’s strategies are to maximize existing strengths; continue building on the company’s strong reputation as an industry innovator with a long record of meeting the needs of recreational shooters, first responders, and the modern warfighter; and leverage the company’s continuous improvement process to increase productivity by optimizing the company’s people, processes, and equipment.
International Operations
Olin has an international presence, including the geographic regions of Europe, the Asia Pacific and Latin America. Approximately 33% of Olin’s 2023 sales were generated outside of the U.S., including 32% of the company’s Chlor Alkali Products and Vinyls 2023 segment sales, 57% of the company’s Epoxy 2023 segment sales and 11% of the company’s Winchester 2023 segment sales.
Customers and Distribution
Products the company sells to industrial or commercial users or distributors for use in the production of other products constitute a major part of the company’s total sales. The company sells some of the company’s products, such as epoxy resins, caustic soda and sporting ammunition, to a large number of users or distributors, while the company sells other products, such as chlorine and chlorinated organics, in substantial quantities to a relatively small number of industrial users.
The company markets most of its products and services primarily through its sales force and sell directly to various industrial customers, mass merchants, retailers, wholesalers, gun clubs, other distributors and the U.S. Government and its prime contractors.
Competition
Among the company’s competitors are Huntsman Corporation (Huntsman), Westlake Chemical Corporation, Kukdo Chemical Co. Ltd. (Kukdo) and Kumho P&B Chemicals (Kumho).
Research Activities
The company’s research activities are conducted on a product-group basis at a number of facilities. Company-sponsored research expenditures were $20.0 million in 2023.
Seasonality
The company’s sales are affected by economic downturns and the seasonality of several industries it serves, including building and construction, coatings, oil and gas, infrastructure, electronics, automotive, water treatment, refrigerants and ammunition. The company’s chlor alkali businesses generally experience their highest level of activity during the spring and summer months, particularly when construction, refrigerants, coatings and infrastructure activity is higher. The company’s Epoxy segment also serves a number of applications, which experience their highest level of activity during the spring and summer months, particularly civil engineering and protective coatings and other construction materials, including composites and flooring.
History
Olin Corporation was founded in 1892. The company was incorporated in 1892 as a Virginia corporation.
