Richful Lube Additives reported last week that its lubricant additives sales revenue decreased in 2023, while its overall net profit rose on lower sales attributed to destocking.
Lubricant additives sales revenue declined 5%, from ¥2.9 billion (U.S. $401 million) in 2022 to ¥2.7 billion last year, the company said in its annual report stock exchange filing. Lubricant additives accounted for 97% of the company’s ¥3 billion operating income in 2023, compared to 94% in 2022.
Lubricant sales volume declined 5% from 143,054 tons in 2022 to 136,401 tons last year. Production declined 12% to 133,548 tons. Inventory also fell, by 14%, to 17,630 tons.
Richful’s overall net profit rose 3% from ¥588.1 million in 2022 to ¥606.5 million in 2023. Overall sales revenue declined 8% from ¥3.1 billion in 2022 to ¥2.8 billion last year.
The company said the rise of globalization, especially the superposition of geopolitical conflicts, has brought significant challenges to the supply of global oil additives. Last year, it said, downstream customers increased their purchases out of concerns about supply chains, creating a number of problems for the company.
“As a result of destocking, the company’s revenue declined slightly,” it said. However, it noted that that the company’s industry is at a stage where the international supply chain is being rebuilt, and domestic import substitution is accelerating, creating new sales opportunities.
Fourth-quarter net profit for Richful fell 31%, from ¥224.5 million in 2022’s fourth quarter, to ¥155.6 million. Sales revenue in the fourth quarter dropped 34%, from ¥1 billion to ¥663.2 million.
Richful’s plant at its Xinxiang, Henan province headquarters location can produce up to 100,000 metric tons per year of additive components and 15,000 t/y in packages. It provides packages for passenger car engine oils, heavy-duty engine oils and anti-wear hydraulic oil packages.