What changed in this filing

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Item 1. Business

2023-02-28 compared with 2022-02-24 · 100 added, 73 removed, 195 unchanged (47% of the section changed)

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Through a diverse team of talented and experienced people, we develop, manufacture, and bring to market solutions that are largely renewably sourced and help customers solve complex problems while making the world more sustainable.

Our products are used in a variety of demanding applications, including automotive components that reduce gasoline vapor emissions, asphalt paving, oil exploration and production, agrochemicals, adhesives, lubricants, publication inks, coatings, elastomers, and bioplastics.

Our products are used in a variety of demanding applications, including automotive components that reduce gasoline vapor emissions, asphalt paving, road striping, oil exploration and production, agrochemicals, adhesives, lubricants, publication inks, coatings, elastomers, and bioplastics.

We operate in two reporting segments:

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Throughout this Annual Report on Form 10-K, except where otherwise stated or indicated by the context, "Ingevity," the "Company," "we," "us," or "our" means Ingevity Corporation and its consolidated subsidiaries and their predecessors.

Our business originated as part of the operations of our former parent company, Westvaco Corporation, in 1964, and we operated as a division of Westvaco Corporation and its corporate successors, including MeadWestvaco Corporation and WestRock Company (“WestRock”) until our separation from WestRock in May 2016 (the “Separation”).

Our common stock began "regular-way" trading on the New York Stock Exchange in May 2016 under the symbol "NGVT."

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Reports we file with the SEC may also be viewed at www.sec.gov.

The table below illustrates our product lines and the primary end uses for our products by segment, as well as our revenue by segment for fiscal year 2021.

The table below illustrates our product lines and the primary end uses for our products by segment, as well as our revenue by segment for the fiscal year 2022.

For more information on our U.S.

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Pavement reconstruction and recycling

Thermoplastic pavement markings

Agrochemicals

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Our manufacturing operations are subject to regulation by governmental and other regulatory authorities with jurisdiction over our operations.

These regulations include regulations concerning the discharge of materials into the environment, the handling, storage, transportation, disposal, and clean-up of chemicals and waste materials, and otherwise relating to the protection of the environment, as well as other operational regulations, such as the Occupational Safety and Health Act and the Toxic Substances Control Act in the U.S.

and the Registration, Evaluation and Authorization of Chemicals, or REACH, directive in Europe, the UK, and other countries.

These regulations include the discharge of materials into the environment, the handling, storage, transportation, disposal, and clean-up of chemicals and waste materials, and otherwise relating to the protection of the environment, as well as other operational regulations, such as the Occupational Safety and Health Act ("OSHA") and the Toxic

Substances Control Act ("TSCA") in the U.S.

and the Registration, Evaluation and Authorization of Chemicals ("REACH"), directives in the European Union, the United Kingdom ("UK"), and other countries.

It is not possible to quantify with certainty the material effects that compliance with these regulations may have upon the capital expenditures, earnings, or competitive position of Ingevity, but we currently anticipate that such compliance will not have a material adverse effect on any of the foregoing.

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Ingevity believes in the strength of its intellectual property and the merits of its position and intends to pursue all legal relief available to challenge these outcomes in the Delaware Proceeding.

Final resolution of these matters could take up to eighteen months.

The final resolution of these matters could take up to eighteen months.

There are a variety of seasonal dynamics, including global climate and weather conditions, that impact our businesses, though none have currently materially affected our financial results, except in the case of the pavement technologies product line, where roughly 70 to 75 percent of revenue is generated between April and September.

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We are dependent on natural gas to fuel the processes in our chemical refineries and activated carbon plants.

Although we believe that we currently have a stable natural

gas supply and infrastructure for our operations, we are subject to volatility in the market price of natural gas.

We enter into certain derivative financial instruments in order to mitigate expected fluctuations in market prices and the volatility to earnings and cash flow resulting from changes to pricing of natural gas purchases.

All of our manufacturing processes also consume a significant amount of electricity.

Although we believe that we currently have a stable natural gas supply and infrastructure for our operations, we are subject to volatility in the market price of natural gas.

We enter into certain derivative financial instruments to mitigate expected fluctuations in market prices and the volatility of earnings and cash flow resulting from changes to the pricing of natural gas purchases.

All of our manufacturing processes also consume a

significant amount of electricity.

Each of these facilities are located in regulated service areas that have stable rate structures with reliable electricity supply.

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Throughout our Performance Chemicals and Performance Materials portfolios, we are a leader in adding value to products made from renewable materials and in derivatizing technologies that impart desirable environmental benefits in their use.

To create a majority of our chemistries, we take crude tall oil from pine trees and hardwood sawdust (both co-products of the lumber, paper and furniture-making industries) and convert them into products that benefit customers, the environment and society.

To create a majority of our chemistries, we take crude tall oil from pine trees, hardwood sawdust (both co-products of the lumber, paper, and furniture-making industries), and vegetable oils and convert them into products that benefit customers, the environment, and society.

For the caprolactone-based products in our Performance Chemicals segment – although derived from traditional feedstocks – these solutions enable performance attributes in end-use markets that directly help customers and consumers meet sustainability goals.

The superior durability of Capa-based technologies extends product life and helps make materials fully biodegradable.

The superior durability of capa-based polyurethane technologies extends product life and the biodegradable performance of our thermoplastic polycaprolactones offers compostable end of-life solutions.

Ingevity’s products help customers reduce their ecological impact.

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Our lubricant technologies increase tool life and simplify formulations.

And our alternative-fuel vehicle technology enables the use of renewable natural gas as fuel for pickup trucks.

And our alternative-fuel vehicle technology enables the use of renewable natural gas as fuel for pickup trucks and busses.

Our business is built on our ability to maximize the value and utility of materials over their lifecycle, and we will continue to enhance this value proposition through future acquisitions and new product development.

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Our employees are critical to our success, and we strive to provide a safe, rewarding, and respectful workplace where our people are provided with opportunities to pursue career paths based on skills, performance, and potential.

Ingevity is dependent upon our talented production workers who are key to ensuring safe and successful operations, as well as upon engineering, technical, sales and application specialists, together with experienced industry professionals, who are integral to our success.

Additionally, we rely on senior management in order to establish and execute our business strategies.

Our success depends, in part, on our ability to attract, retain and motivate these key performers.

Our failure to attract and retain individuals making significant contributions could adversely affect our financial condition and results of operations.

Our success depends, in part, on our ability to attract, retain and motivate critical resources across production, technical, engineering, sales, and various functional disciplines.

If an ongoing failure to attract and retain individuals in key business roles and functions materialized, it could adversely affect our financial condition and operational results.

We currently employ approximately 2,050 employees, of whom approximately 77 percent are employed in the U.S.

Approximately 19 percent of our employees are represented by domestic (i.e., U.S.) labor unions under various collective bargaining agreements ("CBA").

We engage in negotiations with labor unions for new CBAs from time to time based upon expiration dates of agreements and statutory requirements.

We engage in negotiations with labor unions for new CBAs from time to time based on expiration dates of agreements and statutory requirements.

We consider our relationships with all salaried, union-hourly, and non-hourly employees to be positive and collaborative.

During the second quarter of 2021, at our Crossett, Arkansas Performance Chemicals' manufacturing facility, the International Association of Machinists and Aerospace Workers Union ("IAM") AFL-CIO Local 1362 ratified a three-year CBA, which expires March 1, 2024.

Further, in the second quarter of 2021, at our Covington, Virginia Performance Materials' manufacturing facility, the International Brotherhood of Electrical Workers (“IBEW”) AFL-CIO Local Union 464 ratified a four-year CBA which expires January 15, 2025.

In addition, at our Covington, Virginia Performance Materials' manufacturing facility, the CBA with the Covington Paper Workers Union, Affiliated with The Association of Western Pulp and Paper Workers (“AWPPW”) Local 675 expired on December 1, 2021.

The Company and Covington AWPPW began contract negotiations in November 2021 and the parties continue to operate under the expired CBA while contract renewal discussions continue.

During the second quarter of 2022, at our Covington, Virginia Performance Materials' facility, the International Brotherhood of Electrical Workers (“IBEW”) AFL-CIO Local Union 464 ratified a four-year CBA, which expires January 15, 2025.

In the third quarter of 2022, at our Covington Virginia Performance Materials' facility, the Covington Paper Workers Union, Local 675, affiliated with the Association of Western Pulp and Paper Workers ratified a four-year CBA which expires December 1, 2025.

In the fourth quarter of 2022, at our Charleston South Carolina Performance Chemicals’ facility:

(1) the United Steel, Paper, Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (“USW”) on behalf of its Local Union 9-0508-02, ratified a four-year CBA, which expires June 30, 2026, and (2) the International Association of Machinists and Aerospace Workers (“IAM”) and its Charleston Lodge No.

183, ratified a four-year CBA, which expires June 30, 2026.

In addition, the CBA at our Wickliffe, Kentucky Performance Materials facility with the USW, on behalf of its affiliated Local Union 0775, expired on February 1, 2023.

The parties began contract renewal negotiations in January 2023.

Diversity, Equity & Inclusion

In 2021, we welcomed a new Chief Diversity, Equity and Inclusion Officer (CDEIO).

Establishing the CDEIO role is an important step in our efforts to cultivate diversity, equity and inclusion (DEI), and a unique sense of belonging at the company, all of which enhance our ability to deliver on our mission to purify, protect and enhance the world.

Incubating diverse talent will allow us to harness diverse insights that fuel innovation and create value for customers.

Over the past year, we have ensured our community can live, learn and earn by increasing recruitment of diverse talent through diverse candidate slates, diverse interview teams and gender-neutral job descriptions.

Our new diversity recruiting strategy is focused on ensuring everyone has an equitable experience, diversifying our talent pipeline through DEI programs and enhancing strategic diversity partnerships.

We are partnering with organizations such as the National Society of Black Engineers (NSBE), National Black MBA Association, Society of Women Engineers (SWE), Society of Hispanic Engineers (SHPE), Society of Asian Scientist and Engineers (SASE), Corporate Gray with a focus on military recruiting and historically black colleges and universities to broaden our candidate pool.

A more diverse leadership continues to positively impact our growth and success.

At Ingevity, we are committed to fostering a culture where we recognize, celebrate, and welcome the ways in which each other's unique backgrounds, experiences and perspectives help us reach the best solutions for our customers.

To support us in developing practical and thoughtful ways to embed these principles into our everyday work, we created a dedicated team to advance diversity, equity, and inclusion ("DEI").

A strategic and intentional focus on DEI enhances the employee experience and satisfaction.

It also supports more effective innovation, enhanced customer experience, and a deeper understanding of the communities Ingevity serves.

Our diversity recruiting strategy is focused on ensuring everyone has an equitable experience by diversifying our talent pipeline through diverse candidate slates and interview teams as well as gender-neutral job descriptions.

We are also enhancing our partnerships with organizations such as the National Society of Black Engineers (NSBE), National Black MBA Association, Society of Women Engineers (SWE), Society of Hispanic Engineers (SHPE), Society of Asian Scientist and Engineers (SASE), Corporate Gray, an organization that focuses on military recruiting, and historically black colleges and universities to broaden our candidate pool.

Our focus on advancing the diversity makeup of our leadership continues to positively impact our growth and success.

Today, our board of directors is 30 percent women and 20 percent racially and ethnically diverse, and our executive team is 38 percent women-led and 13 percent racially and ethnically diverse.

Our Women’s Network employee resource group (ERG) served as a catalyst for building community, supporting personal and professional development, and strengthening our business impact internally and externally.

Our Women’s Network employee resource group ("ERG") has served many years as a catalyst for building community, supporting personal and professional development, and strengthening our business impact internally and externally.

We also recently launched two new ERGs in support of our Black and Hispanic employees.

ERGs aim to foster a diverse, inclusive workplace by promoting a positive and inclusive employee experience.

ERGs aim to foster a richer and more diverse workplace by promoting a positive and inclusive employee experience.

Performance Management

We evaluate employee performance holistically, with a view that looks at the progress against goals and direct contributions of the employee and the level of impact they had on the business.

These include key accomplishments that supported the team, our business, our customers and/or internal customers and behaviors that align with Ingevity's core values.

In 2019, we launched a more modern approach to performance management, called Perform.

This approach encourages collaborative partnerships and ongoing conversations between managers and employees to improve performance, meet goals, drive business results and increase employee engagement.

Performance conversations often occur monthly or more frequently, and quality is monitored through frequent surveys.

We evaluate employee performance holistically, looking at the progress against goals, behaviors, feedback, and direct contributions of the employee and their level of impact on the business.

Performance measurement includes accomplishments that supported the team, our company, internal and external customers, and our core values.

In 2022, we modified our approach to create a more formalized record of employee performance at mid-year and year-end, including a new requirement for everyone at Ingevity to request feedback from colleagues who have insight into the respective employee's performance and contributions.

We have a structured performance assessment review at least twice a year and continued to promote ongoing conversations between managers and employees to improve performance, drive business results, and increase employee engagement.

Performance conversations often occur monthly or more frequently.

The slight process enhancements allow Ingevity to cultivate a well-rounded view of each employee's strengths and identify opportunities for learning and growth.

Health & Safety

Ingevity has a world-class safety program and a strong safety culture.

Personal, process and public safety is a core value at Ingevity.

We work hard to protect employees, contractors and the communities where we operate from injuries, illnesses and incidents through the design of safe operations, continuous improvement of personal and process safety performance, management systems and programs, a strong culture of compliance, and a commitment to zero harm to people and the environment.

Personal, process, and public safety are core values at Ingevity.

We work hard to protect employees, contractors, and the communities where we operate from injuries, illnesses and incidents through the design and delivery of safe operations, continuous improvement of personal and process safety performance, management systems, and programs, a strong culture of compliance, and a commitment to zero harm to people and the environment.

In 2022, we continued our efforts to increase reporting of and response to near miss incidents to prevent more serious injuries before they could occur.

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Employees were trained on the importance of our Life-Saving Rules, put in place to prevent fatalities and serious injuries through leadership videos, monthly interactive training packages, and upgraded procedures, checklists, work permits, and audits.

Additionally, in North America where the majority of our bulk shipments are executed, we abide by the American Chemistry Council’s Responsible Care practices of transporting our chemicals safely.

We strategically utilize logistics providers that have committed to these higher standards of Safety, Security, Stewardship, and the Environment.

Performance Materials

We engineer, manufacture, and sell hardwood-based, chemically activated carbon products, which are produced through a highly technical and specialized process primarily for use in gasoline vapor emission control systems in cars, trucks, motorcycles, and boats.

To maximize the productivity of our manufacturing assets, we also produce a number of other activated carbon products for food, water, beverage, and chemical purification applications.

Our automotive activated carbon products primarily take the form of granules, pellets and honeycomb "scrubbers", which are primarily utilized in vehicle-based gasoline vapor emission control systems to capture gasoline vapors that would otherwise be released into the atmosphere as volatile organic compounds.

To maximize the productivity of our manufacturing assets, we also produce several other activated carbon products for food, water, beverage, and chemical purification applications.

Our automotive activated carbon products primarily take the form of granules, pellets, and honeycomb "scrubbers," which are primarily utilized in vehicle-based gasoline vapor emission control systems to capture gasoline vapors that would

otherwise be released into the atmosphere as volatile organic compounds.

The captured gasoline vapors are largely purged from the activated carbon and re-directed to the engine where they are used as supplemental power for the vehicle.

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The chart below reflects our 2022 Performance Materials' net sales by geography.

Sales are assigned to geographic areas based on the location of the third party to which product was shipped.

Sales are assigned to geographic areas based on the location of the party to which the product was shipped.

Raw Materials and Production

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Our process purification products are sold to approximately 60 customers globally.

We sell our automotive technologies and process purification products primarily through our own direct sales force in North America, Europe, South America and Asia and also have a smaller, focused network of third-party distributors that have established a strong direct sales and marketing presence in North America and China.

Our competitors include Cabot Corp.

(sold to One Equity Partners on Nov.

26, 2021), Kuraray Co., Ltd., and several domestic U.S.

We sell our automotive technologies and process purification products primarily through our own direct sales force in North America, Europe, South America, Asia, and a smaller, focused network of third-party distributors that have established a strong direct sales and marketing presence in North America and China.

Our competitors include Norit, Kuraray Co., Ltd., and several domestic U.S.

manufacturers and distributors of imported products and Chinese manufacturers.

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pavement technologies, industrial specialties, and engineered polymers.

Our products are utilized in warm mix paving, pavement preservation, pavement reconstruction and recycling, adhesives, agrochemical dispersants, lubricants, printing inks, coatings, resins, elastomers, bioplastics, medical devices, oil well service additives, oil production and downstream applications, and other diverse industrial uses.

Our products are utilized in warm mix paving, pavement preservation, pavement reconstruction and recycling, road striping, adhesives, agrochemical dispersants, lubricants, printing inks, coatings, resins, elastomers, bioplastics, medical devices, oil well service additives, oil production and downstream applications, and other diverse industrial uses.

Our application expertise is often called upon by our customers to provide unique solutions that maximize resource efficiency.

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The chart below reflects our 2022 Performance Chemicals' net sales by geography.

Sales are assigned to geographic areas based on the location of the third party to which product was shipped.

Sales are assigned to geographic areas based on the location of the party to which the product was shipped.

Raw Materials and Production

Our Performance Chemicals segment serves customers globally from three manufacturing locations in the U.S.

Our Performance Chemicals segment serves customers globally from seven manufacturing locations in the U.S.

and one in the UK.

Most of our pavement technologies, and industrial specialties products are derived from crude tall oil (CTO), a co-product of the kraft pulping process, where pine trees are used as the source of the pulp.

Most of our industrial specialties and some of our pavement technologies products are derived from crude tall oil ("CTO"), a co-product of the kraft pulping process, where pine trees are used as the source of the pulp.

We also produce products derived from lignin, which is extracted from black liquor, another co-product of the kraft pulping process.

In 2016, we entered into a long-term supply agreement with WestRock pursuant to which we purchase all of the CTO and CTO equivalent tons of black liquor soap skimming ("BLSS"), the precursor to CTO, from WestRock's kraft mills as of such date, subject to certain exceptions.

In 2018, we entered into a 20-year supply agreement with Georgia-Pacific LLC (“Georgia-Pacific”), pursuant to which we purchase the lesser of 125,000 tons of CTO and the aggregate output of CTO produced and originating at certain of Georgia-Pacific’s paper mills.

These relationships with WestRock and Georgia-Pacific are strategically important to our Performance Chemicals business due to the limited supply of CTO globally, of which we believe a significant portion is already under long-term supply agreements with other consumers of CTO.

Under these agreements, we currently expect to source approximately 60 to 70

percent of our CTO requirements through 2025 based on the maximum operating rates of our three Performance Chemicals' pine chemicals facilities.

The remainder of our CTO needs are sourced through short-term contracts in the open market.

We typically source over 80 percent of our CTO needs through long-term supply contracts.

The remainder of our CTO needs is sourced through short-term contracts and spot purchases in the open market.

Most of our long-term contracted volumes are sourced through two primary parties:

WestRock and Georgia-Pacific LLC (“Georgia-Pacific”).

During 2022, we sourced approximately 75 percent of our CTO and CTO equivalent volumes of black liquor soap skimming ("BLSS"), the precursor to CTO, from WestRock and Georgia-Pacific combined.

These relationships with WestRock and Georgia-Pacific are strategically important to our Performance Chemicals business due to the limited supply of CTO globally, a significant portion of which we believe is already under long-term supply agreements with other consumers of CTO.

There are other pressures on the availability of CTO.

Some pulp or paper mills may choose to consume their production of CTO to meet their energy needs or reduce their carbon footprint, rather than sell the CTO to third parties.

Weather conditions have in the past and may in the future affect the availability and quality of pine trees used in the kraft pulping process and, therefore, the availability of CTO that meets Ingevity’s quality standards.

Geopolitical risk factors could constrain CTO availability.

For example, sanctions imposed on Russia in 2022 have constrained the global CTO supply by approximately 10 percent.

Also, there are regulatory pressures that may incentivize suppliers of CTO to sell CTO into alternative fuel markets (i.e., biofuels) rather than to historical end users such as Ingevity.

CTO-based biofuel has been deemed to meet the EU’s Renewable Energy Directive, second phase (“RED II”) biofuel sustainability criteria.

As a consequence of RED II, there has been a significant increase in demand for CTO and its derivatives, resulting in significantly increasing prices.

In addition to these developments in the EU, various pieces of legislation regarding the use of alternative fuels have been introduced in the U.S.

at both the federal and state level.

Currently, none of the U.S.

legislation mandates or provides incentives for the use of CTO or its derivatives as a biofuel.

Future legislation in the U.S.

and elsewhere may promote the use of CTO or its derivatives as a feedstock for the production of biofuels, further constraining supply.

Because the supply of CTO is inherently constrained by the volume of kraft pulp processing as discussed above, as well as the recent diversion of CTO for the production of alternative fuels, the availability of CTO supply as a raw material for the pine-based chemicals industry is under pressure.

This pressure has increased and we expect will continue to drive the cost of CTO to unprecedented levels.

CTO accounted for approximately 14 percent of our consolidated cost of sales and 22 percent of our full company raw materials purchases in 2022.

As described above, the pricing and availability of CTO are impacted by the limited supply of the product and competing demands for its use, both of which drive pressure on its price.

To diversify our raw material stream, we converted a portion of our Crossett, Arkansas CTO facility to run non-CTO-based alternative fatty acids ("AFA").

We currently sell AFA as well as AFA derivatives into end markets such as oilfield and industrial applications.

We have invested and will continue to invest, in AFA production capacity at our Crossett, Arkansas facility as we expand the commercialization of our product offerings in existing and new markets, which may include the biofuels market.

Our engineered polymers' products are caprolactone based, which is derived from cyclohexanone, a benzene derivative, and hydrogen peroxide, both of which are readily available in the market.

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Our hydrogen peroxide is currently supplied by Solvay Interox Limited, a co-located supplier at our Warrington, UK facility under a long-term supply agreement.

The other key raw materials used in the Performance Chemicals business are nonylphenol, pentaerythritol, and ethylene amines.

The other key raw materials used in the Performance Chemicals business are maleic anhydride, pentaerythritol, and ethylene amines.

These are sourced where possible through multiple suppliers to protect against supply disruptions and to maintain competitive pricing.

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Our pavement technologies product line produces a broad line of innovative additives and technologies utilized globally in road construction and pavement preservation, including pavement reconstruction and recycling.

With the acquisition of Ozark Materials, LLC and Ozark Logistics, LLC (collectively, “Ozark Materials”), we have added road striping technologies to the portfolio.

Warm Mix Asphalt.

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Our cold in-place recycling additives allow our customers to reopen existing roadways faster, while also lowering overall costs and jobsite emissions.

Thermoplastic Pavement Markings.

We provide alkyd and hydrocarbon premium-based thermoplastic road striping technologies which provide long service life, excellent adhesion, superior color, and retro-reflectivity.

Based on the customer and/or governmental agency requirements, the markings can be designed for varying levels of initial and retained performance properties.

We supply our pavement technologies products to approximately 650 customers in 65 countries through our own direct sales force, primarily in North America and Asia, as well as a network of third-party distributors.

In 2022, our ten largest customers accounted for 42 percent of the product line's sales.

Our largest customers include:

Colas SA, Ergon, Inc., Associated Asphalt Inc., and Idaho Asphalt Supply Inc.

Our primary competitors in pavement technologies are Nouryon Chemicals B.V., Arkema S.A., and Kao Specialties Americas LLC.

Our largest customers include Colas SA, Ergon, Inc., Associated Asphalt Inc., and Idaho Asphalt Supply Inc.

Our primary competitors in pavement technologies are Nouryon Chemicals B.V., Arkema S.A., Kao Specialties Americas LLC, Sherwin-Williams Company, and PPG Industries Traffic Solutions.

We compete based on deep knowledge of our customers’ businesses and extensive insights into road-building technologies and trends globally.

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We are a leading supplier of ink resins from renewable resources to the global graphic arts industry for the preparation of printing inks.

Our products improve gloss, drying speed, viscosity, adhesion, and rub resistance of the finished ink to the substrate.

Our products improve the gloss, drying speed, viscosity, adhesion, and rub resistance of the finished ink to the substrate.

We produce a wide array of resins, typically specifically tailored to a customer’s use, which can vary by application, pigment type, end-use, formulation, manufacturing, and printing process.

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We also supply corrosion inhibitors or their components for oil and gas production and downstream applications.

Crude oil and natural gas production are characterized by variable production rates and unpredictable changes due to the nature of the produced fluids including but not limited to water and salt content.

Our corrosion inhibitors maximize production rates by reducing the downtime for key equipment and pipes due to corrosion.

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In 2022, our ten largest customers accounted for 36 percent of the product line's sales.

Our largest customers include PPG Industries, Haliburton, H.B.

Fuller Co., Syngenta Crop Protection AG, Solenis, Ecolab and Flint Group.

Our competitors, which differ depending on the product, application, and region, include Kraton Corp., Eastman Chemical Co., ExxonMobil Corp., Borregaard ASA, Lawter, Inc., Respol S.A., Firmenich SA, Lamberti S.p.A., Mobile Rosin Oil Company, Inc., as well as several others.

Our largest customers include Haliburton, Solenis, Flint Group, H.B.

Fuller Co., and Arboris.

Our competitors, which differ depending on the product, application, and region, include Kraton Corp., Eastman Chemical Co., ExxonMobil Corp., Borregaard ASA, Lawter, Inc., Repsol S.A., Firmenich SA, Lamberti S.p.A., Mobile Rosin Oil Company, Inc., as well as several others.

Specific to our industrial specialty products, our customers select the product that provides the best balance of performance, consistency, and price.

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In adhesives, our products compete against other tackifiers, including other tall oil resin ("TOR") based tackifiers as well as tackifiers produced from gum rosin and hydrocarbon starting materials.

In addition, the choice of polymer used in an adhesive formulation drives the selection of tackifier.

In addition, the choice of polymer used in an adhesive formulation drives the selection of a tackifier.

In agrochemicals, the selection of a dispersant is made early in the product development cycle and the formulator has a choice among our sulfonated lignin products, lower-quality lignosulfonates and other surfactants such as naphthalene sulfonates.

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In oilfield, we compete against other tall oil specialty additives used for oil-based drilling fluids or corrosion inhibition formulations in the drilling, production and downstream applications of oilfield.

We compete based on our ability to understand

our customers’ applications and deliver solutions that aid in their improvement of the exploration and production of oil and gas for end users.

We compete based on our ability to understand our customers’ applications and deliver solutions that aid in their improvement of the exploration drilling and production of oil and gas for end users.

Our scale and manufacturing flexibility help us deliver the creativity, expedience, and confidence that customers in oilfield technologies require.

E ngineered Polymers

Our engineered polymers product line includes caprolactone and caprolactone based specialty chemicals for use in coatings, resins, elastomers, adhesives, bioplastics, and medical devices.

Our coating products are used in automobile refinishing, sports floors, and marine applications.

Our products enhance product performance by providing abrasion resistance, long durability, high quality finish, and enhanced performance in resin modification.

Our engineered polymers product line includes caprolactone and caprolactone-based specialty polymers for use in coatings, resins, elastomers, adhesives, bioplastics, and medical devices.

Our coating products are used in automobile refinishing, sports floors, windmill blade coatings, and marine applications.

Our products enhance product performance by providing abrasion resistance, long durability, a high-quality finish, and enhanced performance in resin modification.

Our products are often preferred because they provide a combination of traits that allows customers to displace several combinations of other products.

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Our products enhance product performance due to their resistance to wear and tear, ability to maintain form and function under pressure and temperature and excellent UV resistance.

Our products are often used in highly demanding applications where competing products do not reach required performance levels.

Our products are often used in highly demanding applications where competing products do not reach the required performance levels.

Our products are used in hot-melts, fabric lamination, and miscellaneous footwear components.

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Our largest customers include polyurethane, adhesive, coatings, and bioplastics manufacturers.

Our primary caprolactone competitors are Daicel, Corp.

and BASF SE, but we also face competition from other competing materials.

Our primary caprolactone competitors are Daicel, Corp., Juren, and BASF SE, but we also face competition from other competing materials.

We compete based on performance as compared to the other competitive materials.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business