NewMarket, parent of lubricant additive company Afton Chemical Corp., faced profit pressure in 2025 as global demand for additives softened and customers adjusted inventories amid economic uncertainty. Afton remains the company’s core business.
The petroleum additives segment, which includes Afton, reported a 3.8% decline in sales year over year, while profit fell 12.2% from a record high. The company attributed the decline to weaker demand, lower prices and higher per-unit costs as plants operated below capacity.
By contrast, the specialty materials segment posted strong growth. Full-year sales rose to $183 million from $141 million, while profit increased to $47 million from $17.5 million. Fourth-quarter sales nearly doubled to $48.5 million, with profit rising to $7.3 million. Growth was driven by higher volumes at American Pacific and the addition of Calca, acquired Oct. 1, 2025.
“Afton Chemical’s petroleum additives segment maintained a strong operating profit margin of 20.8%, generating $520.1 million in operating profit from $2.5 billion in sales,” Geeta Agashe, an independent industry consultant, told Lube Report. “This substantial profit effectively supports the newer specialty materials segment, which, while growing, generated a comparatively smaller $47.0 million in operating profit in 2025.”
Shipments declined 4.9% year over year, reflecting softer market conditions and the company’s decision to reduce lower-margin business. Quarterly volumes fell 6%, increasing cost pressure as production slowed to manage inventory.
In 2024, NewMarket acquired American Pacific Corp., which manufactures specialty chemicals including solid rocket propellants for aerospace and defense, and fire suppressants. The following year, it bought Calca Solutions, LLC, which produces high-purity hydrazine, a propellant used in space propulsion systems and defense applications.
To date, NewMarket has invested about $1 billion in specialty materials through the acquisitions and related capacity expansions. While the company has ruled out any intention to divest legacy assets, debate is growing over the strategic case for and against such a move.
“Market analysts generally view a full sale as unlikely in the immediate term because the newer segment is not yet large enough to sustain the parent company. However, as the specialty materials revenue grows, NewMarket may eventually consider a spin-off or a strategic merger,” Agashe said.