Westlake Chemical is a vertically integrtaed company, which produces basic chemicals, vinyls, polymers and fabricated PVC building products. It manufacturers products primraily for consumer industrial markets which include rigid packaging, automotive products, coatings, residential and commercial construction as well as other durable and non-durable goods.
For 2010 Westlake Chemical reported net sales of $3,171.8 million, an increase of 36.4% from 2009. The increase was due mainly to higher sales prices for all major products and higher sales volume for polyethylene and PVC resin. From 2009 average sale prices were up by 29.8%.
Margins in the pertochemical industry are sensitive to domestic and international supply and demand. With such a global presence Westlake can struggle to made demand predictions. They tend to come in cycles of tight supply, leading to high operating rates and margins, followed by periods of oversupply primarily resulting from significant capacity additions, leading to reduced operating rates and lower margins. Additionally, it is a mature and capital intensive industry. It is not possible to predict accurately the supply and demand balances, market conditions and other factors that will affect industry operating margins in the future.
Many of Westlake's products are commodities and so the markets are strictly based on price. The company must be very focused on product margins. Volatility in raw materials can dramatically affect the sale prices of products. In the past changes in raw material have had negative effects on Westlake's profitability.
Westlake Chemical competes across a range of factors from price, customer service, product deliverability, quality, consistency to performance. In most markets it competes with such large chemical companies as: