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Sales and Market Development
The Right Chemistry
The majority of Kraton’s products are based on styrenic block copolymer (SBC) chemistry, which we pioneered nearly 50 years ago. These highly engineered synthetic elastomers launched a new era of versatility, aesthetics, durability and performance for a host of consumer and industrial products. Kraton’s vast array of product offerings are organized around four end use markets. The Adhesives, Sealants and Coatings end use represented 35 percent of Kraton’s total revenue in 2011 and covers a wide range of consumer and industrial applications from disposable hygiene products to packaging tape, labels and decals. Other applications include industrial coatings, protective films, printing plates, insulating gels used in fiber optic cable and clear sealants for the do-it-yourself, home improvement market. This end use derives approximately 80 percent of its sales from adhesives, primarily hot melt pressure sensitive technology, and coatings and sealants represent an area of our business with high growth potential.
Adhesives, Sealants and Coatings
The Adhesives, Sealants and Coatings end use represented 35 percent of Kraton’s total revenue in 2011. Sales revenue for the year was $500 million, up 19 percent from the prior year, primarily due to global price increases implemented in response to rising raw material costs. Sales volumes reflect higher sales into lubricant additive applications and higher volumes in differentiated HSBC grades, including innovation-led volume growth in health and beauty gel applications and innovation-led USBC growth in
polychloroprene rubber replacement applications. These increases were partially offset by volume declines in less-differentiated polymer grades within the USBC portfolio.
Advanced Materials accounted for 28 percent of the company’s 2011 revenue, and is our most diverse end use. Whether it is providing stretch to diapers and adult incontinence products, or providing soft-touch surfaces for razors and toothbrushes, the area of personal care continues to represent an important and growing market space for this business. Additionally, new product innovations have led to significant growth across both the medical and the wire and cable markets. Kraton continues to respond to the emerging needs of developing nations, and provides next-generation innovations in materials that allow our customers to offer solutions in a more environmentally responsible manner.
Paving and Roofing
Accounting for approximately 30 percent of our 2011 revenue, Kraton’s Paving and Roofing end use offers asphalt modification solutions that increase lifespan, reduce maintenance and improve asphalt’s ability to withstand temperature extremes and high traffic loads. In some applications, Kraton enables a reduction in pavement thickness of up to 40 percent, delivering enhanced performance as well as environmental benefits. Roofing materials modified with Kraton last longer and are more energy efficient. Approximately 60 percent of sales for this end use are from paving applications, with the balance coming from roofing applications.
Accounting for seven percent of our 2011 revenue, this end use is comprised of sales of our Cariflex® isoprene rubber and isoprene rubber latex, which are used in applications such as surgical gloves, condoms, medical components, cold seal adhesives and in electronic industry applications.