Westlake Corp (NYSE: WLK)

Westlake Corporation is a vertically integrated global manufacturer and marketer of housing and infrastructure products and performance and essential materials that are designed to enhance the lives of people every day. The company produces a wide range of materials including residential siding, pipe and fittings, windows, roofing, polymer compounds and basic chemicals such as ethylene, chlorine, caustic soda, polyvinyl chloride, polyethylene and epoxy resins. Its operations serve diverse markets such as residential construction, flexible and rigid packaging, automotive, healthcare, water treatment, wind energy and various industrial sectors.

Westlake Corporation generates revenue by selling its products directly to end users and through distributors and wholesalers. Its Housing and Infrastructure Products segment earns income from the sale of building materials such as siding, trim, molding, roofing, windows, decking, pipe and fittings and polymer compounds. Its Performance and Essential Materials segment earns income from the sale of basic chemicals and polymers including ethylene, chlorine, caustic soda, polyvinyl chloride, polyethylene, epoxy resins and related specialty chemicals. The company serves a broad base of customers ranging from construction contractors and manufacturers to packaging companies and utility providers.

The company operates through the following segments: Housing and Infrastructure Products (HIP) and Performance and Essential Materials (PEM).

• The Housing and Infrastructure Products segment manufactures and markets residential and nonresidential building products, PVC pipe and fittings, and polymer compounds used in a variety of applications. Its product lines include siding, trim and molding, architectural stone veneer, windows, decking, roofing tiles, and pipe for water, sewer and industrial uses. The segment also supplies compounds that provide specific performance characteristics for use in wire and cable, flooring, wall coverings, automotive parts and medical devices.

• The Performance and Essential Materials segment produces basic chemicals and polymers including ethylene, chlorine, caustic soda, polyvinyl chloride, polyethylene and epoxy resins. It integrates its operations from raw material extraction through downstream processing to deliver materials used in PVC pipe, packaging, coatings, adhesives and a range of industrial applications. The segment also supplies specialty chemicals for use in automotive, aerospace, electronics and construction sectors.

Westlake Corporation holds a strong position as one of the largest producers of chlor alkali and polyvinyl chloride in the world. Its integrated value chain from ethylene to finished products gives it cost and supply advantages over many peers. Major competitors in its building products business include Associated Materials LLC, CertainTeed Corporation, Cornerstone Building Brands Inc, Diamond Plastics Corporation, IPEX Inc, JM Eagle Inc, Trex Company Inc and James Hardie. In the chemicals business it faces competition from Chevron Phillips Chemical Company, Dow Inc, ExxonMobil Chemical Company, Formosa Plastics Corporation, LyondellBasell Industries NV, NOVA Chemicals Corporation and Sasol Limited. The company’s competitive strengths lie in its vertical integration, long term contracts with raw material providers, diversified product portfolio and global manufacturing footprint.

The company serves a diverse customer base that includes home builders, contractors and distributors in the residential construction sector, manufacturers of flexible and rigid packaging, automotive parts producers, healthcare device makers, water treatment facility operators and wind energy developers. In its chemicals business it sells to PVC pipe manufacturers, packaging companies, coating formulators, adhesive makers and a range of industrial users such as those in the automotive, aerospace, electronics and construction fields.