Element Solutions Inc (ESI) Business
This page reproduces the company's own Item 1 Business text from the linked SEC filing. It is filer text, not grepcent analysis, scoring, or investment advice.
Informational only - not investment advice. See Disclaimer.
Item 1. Business
Unless the context otherwise indicates or requires, all product names, trade names, trademarks, service marks or logos used in this 2025 Annual Report are part of our intellectual property, although the “®” and “TM” trademark designations may have been omitted. For financial and other information about our segments and the geographic areas in which we do business, see "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7, "Financial Statements and Supplementary Data" in Part II, Item 8, as well as Note 1, "Background and Basis of Presentation" and Note 22, "Segment Information" to our audited Consolidated Financial Statements, all included in this 2025 Annual Report.
Business Overview
Element Solutions, incorporated in Delaware in January 2014, is a leading global specialty chemicals technology company whose businesses supply a broad range of solutions that enhance the performance of products people use every day. Developed in multi-step technological processes, these innovative solutions enable customers' manufacturing processes in multiple high-value industries, including consumer electronics, power electronics, semiconductor fabrication, high-performance computing, communications and data storage infrastructure, automotive systems, industrial surface finishing and offshore energy. Our product innovation and product extensions are expected to continue to drive sales growth in both new and existing markets while expanding margins through a consistent focus on increasing customer value propositions.
We believe the majority of our businesses hold strong positions in the high-growth markets we serve. Our extensive global teams of specially trained scientists and engineers develop our solutions, and our expert sales and service organizations ensure our customers' needs are met every day. Our customer-centric innovation means we develop technologies to meet the already-identified needs of our current supply chains. We solve our customers' existing and emerging problems through technical service and innovation. We believe that our customers place significant value on the consistency and quality of our brands, on which we capitalize through significant market share, customer loyalty and supply chain access. In addition, operational risks and switching costs make it difficult for our customers to change suppliers which allows us to retain customers and maintain our market positions.
Our customers rely on our innovation to develop new products of their own, so our capabilities help them keep up in fast-paced, high-growth markets. To that end, we draw upon our broad and longstanding intellectual property portfolio and technical expertise, while working closely with both customers and OEMs on an ongoing basis, to develop proprietary solutions tailored to their manufacturing needs. We leverage these close relationships to win qualifications and specifications into their supply chains as well as to identify opportunities for new products; all of which provide potential additional revenue streams.
Our strategy is based on a balance of operational excellence and prudent capital allocation. Our operating teams focus on the strong execution of customer-led product development, superior technical sales support and continuous supply chain optimization. Our senior leadership aims to foster an environment of accountability and success for our operating teams while also evaluating and executing on high-return capital allocation opportunities that can drive compounding of long-term intrinsic value per share.
Acquisitions and Divestitures
We regularly pursue targeted and opportunistic acquisitions in our existing and adjacent end-markets that seek to strengthen our current businesses, expand and diversify our product offerings, and enhance our growth and strategic position as well as divestitures to maximize long-term value creation for our shareholders.
MGS Transaction - On February 28, 2025, we completed the sale of our flexographic printing plate business, MacDermid Graphics Solutions, for $320 million, net of disposed cash. MacDermid Graphics Solutions was reported within the Specialties segment. The sale resulted in a gain of $66.5 million.
EFC Acquisition - On January 2, 2026, we completed the acquisition of EFC Gases & Advanced Materials, a provider of high-purity specialty gases and other advanced materials, for a purchase price of approximately $369 million, net of cash and subject to adjustments, with a potential earn-out based on EFC's 2026 performance of up to $30.0 million cash or 1.16 million Company shares.
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Micromax Acquisition - On February 2, 2026, we completed the acquisition of Micromax, a global supplier of advanced electronics inks and pastes, for a purchase price of approximately $500 million, net of cash and subject to adjustments.
Business Segments
Our operations are organized into two reportable segments which were renamed in the fourth quarter of 2025: Electronics (MacDermid Alpha Electronics Solutions, previously known as Electronics) and Specialties (Element Specialties, previously known as Industrial & Specialty). In 2025, we achieved sales of $2.55 billion, to which our Electronics and Specialties segments contributed approximately 70% and 30%, respectively. Other than the names, there were no changes to the composition of the businesses that make up each segment in the fourth quarter of 2025. However, EFC will be reported in the Specialties segment and Micromax will be reported in the Electronics segment beginning in the first quarter of 2026.
Our segments share a common focus on attractive niches, which we believe will grow faster than their diverse, overall end-markets. Both segments provide products that, in substantially all cases, are consumed by customers as part of their production process, providing us with reliable and recurring revenue as products are replenished in order to continue production. We provide highly-technical service and support to customers and OEMs in order to support and optimize their manufacturing processes. While they typically represent only a small portion of our customers' costs, our products, along with our high-value added technical support, are seen as integral to customer product performance.
Neither of our segments is subject to significant seasonality.
Electronics
Our Electronics segment researches, formulates and sells specialty chemicals and material process technologies for all types of electronics hardware, from complex printed circuit board designs to advanced semiconductor packaging. In high-performance datacenters, mobile communications, computers, automobiles and aerospace equipment, its products are an integral part of the electronics manufacturing process and the functionality of end-products. The segment's "wet chemistries" for metallization, surface treatments and solderable finishes form the physical circuitry pathways and its "assembly materials," such as surface mount technologies (SMT), pastes, fluxes and adhesives, join those pathways together.
Electronics provides solutions through the following businesses:
Assembly Solutions - representing approximately 51% of the segment's 2025 net sales. As a global supplier of SMT, fluxes, thermal management materials, coatings and other attachment materials, we develop high-performing innovative materials that are used to assemble consumer electronics from circuit boards, discrete electronic components, connectors and integrated circuit substrates. We believe our growth in this business will be driven by the increasing use of electronics in consumer, automotive, telecommunications, memory, medical, aerospace and other markets. Of our total net sales for Assembly Solutions, approximately 50% is metal content whose price fluctuations are generally passed through to our customers.
Circuitry Solutions - representing approximately 29% of the segment's 2025 net sales. As a global supplier of chemical formulations to the electronics industry, we design and manufacture proprietary "wet" chemical processes and materials used by our customers to manufacture printed circuit boards and memory storage devices. Our product portfolio is focused on specialized consumable chemical processes and materials, such as circuit formation, primary metallization, electroplate, surface finishes and flexible/formable films. We believe our growth in this business will be driven by demand in wireless mobile devices, internet infrastructure, high performance computing, and the increasing use of electronics in automobiles.
Semiconductor Solutions - representing approximately 20% of the segment's 2025 net sales. As a global supplier to the semiconductor industry, we provide advanced copper interconnects, die attachment, sintered silver material, adhesives, wafer bump processes and photomask technologies to our customers for integrated circuit fabrication and semiconductor packaging. We believe our growth in this business will be driven by advanced electronics packaging, necessary to meet the growing needs of high performance computing, artificial intelligence, the internet of things, next-generation wireless communications and the increasing content and complexity of electronics in automotive applications.
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Products
A selection of Electronics' product offerings is presented below:
| Assembly Solutions | |||
|---|---|---|---|
| Electronic Assembly Materials | Electronic assembly materials are used in circuit board and high-performance electronic device assembly. Our product offering is primarily focused on SMT, including solder pastes, adhesives and preforms. The portfolio also includes thermal management materials, encapsulants, coatings, fluxes and other solder materials, all of which facilitate wave solder and surface mount assembly activities. Key brands include Alpha, Innolot, AccuFlux, Powerbond, Kester, Electrolube and Alpha HiTech. | ||
| Circuitry Solutions | |||
| Circuit Board Metallization | Circuit board metallization products are used to plate holes drilled through printed circuit boards to connect opposite sides of the board and multi-layered printed circuit boards. Products include Shadow, Blackhole, MacuSpec, M-System and Systek. | ||
| Circuit Formation Products | Circuit formation products consist of an assortment of products for defining circuit patterns and bonding conductors to insulating materials. | ||
| Electronic Materials | Electronic materials are specialty products developed for evolving electronic applications, including photovoltaics, memory disk and molded interconnect devices manufacturing as well as lead frame and dielectric plating solutions. | ||
| Surface Finishes | Surface finishes are metallic and organic surface finishes products that promote wire bondability, provide contact functionality and preserve solderability of the circuit board prior to component assembly. Key brands include Sterling, Entek, Affinity and Ormecon. | ||
| Film and Smart Surface Solutions | Films and smart surfaces solutions include 3D formable films, 2D films, texturing Lacquers and circuitry & component attach materials which are used in the creation of in-mold electronic (IME) structures for human-machine interfaces (HMI). Key brands include Xtraform, Autotex and Autoflex. | ||
| Semiconductor Solutions | |||
| Semiconductor Assembly Materials | Semiconductor assembly materials are sintered materials, die attach pastes and adhesives, thermal interface materials, getters, solder flux, pastes and preforms. Our Argomax line of advanced sinter technology is used in power semiconductor and solid state lighting markets to improve reliability and device performance. Other key brands include ALPHA, ATROX, TrueHeight, Staydry and HiTech. | ||
| Wafer Level Packaging Materials | Wafer level packaging materials are advanced plating chemistries used for semiconductor chip fabrication and packaging. Our plating portfolio consists of copper, nickel and precious metals used in advanced packaging applications as well as damascene metallization used for transistor interconnection. Key brands include ViaForm, MICROFAB and NOVAFAB. |
Specialties
Our Specialties segment researches, formulates and sells specialty chemicals and material process technologies that enhance surfaces or improve industrial processes in diverse industrial sectors from automotive trim to transcontinental infrastructure to high-design faucets. Its products include chemical systems that protect and decorate metal and plastic surfaces and chemistries used in water-based hydraulic control fluids for offshore energy production. The segment's products are used in the aerospace, automotive, construction, consumer electronics and oil and gas production end-markets. On February 28, 2025, we completed the sale of our flexographic printing plate business, MacDermid Graphics Solutions. Graphics Solutions' net sales before the disposition represented approximately 3% of the segment's 2025 net sales.
Specialties provides solutions through the following businesses:
Industrial Solutions - representing approximately 85% of the segment's 2025 net sales. As a global supplier of industrial metal and plastic finishing chemistries, we primarily design and manufacture chemical systems that protect and decorate surfaces. Our high-performance functional coatings improve resistance to wear and tear, such as chrome plating of shock absorbers for cars, or provide corrosion resistance for appliance parts. Our decorative performance coatings apply finishes for parts in various end-markets, such as automotive interiors or jewelry surfaces. Our industrial customer base is highly diverse and includes customers in the following end-markets: appliances and electronics equipment; automotive parts; industrial parts; plumbing goods; construction equipment; and transportation equipment. In this business, we also sell certain water-treatment solutions and lubricants used in similar end-markets. We believe our growth in this industry will be primarily driven by increased worldwide automobile production with elevated fashion elements and higher content per vehicle as well as general economic growth.
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Energy Solutions - representing approximately 12% of the segment's 2025 net sales. As a global supplier of specialized fluids to the offshore energy industry, we produce water-based hydraulic control fluids for major oil and gas companies and drilling contractors to be used in offshore deep-water production and drilling applications. We believe our growth in this business will be driven by continued capital expenditures in energy exploration and production.
Products
A selection of Specialties' product offerings is presented below:
| Industrial Solutions | |||
|---|---|---|---|
| Electroless Nickel | Electroless nickel is applied to a variety of metal and plastic surfaces to enhance corrosion resistance, wear resistance, solderability and to repair worn or over-machined surfaces in a variety of applications. | ||
| Plating Products | Plating products are high-performance coatings used in multiple applications. Our CuMac range of products is used for plating on aluminum wheels, plastic substrates and zinc-based die castings while our evolve plating process applies to chromium-free plating on plastics. | ||
| Pre-treatment and Cleaning Solutions | Pre-treatment and cleaning solutions are applied to prepare the surfaces of a wide variety of industrial products for subsequent treatment. This product family includes a complete line of aqueous and semi-aqueous pre-treatment and cleaning products. | ||
| Functional Conversion Coatings | Functional conversion coatings are applied to metals to enhance corrosion resistance and paint adhesion in a wide spectrum of industrial applications where heavy-duty usage and exposure to unfavorable environments are anticipated. | ||
| Water Treatment | Water treatment consists of Fernox, our water treatment product line, which is used for the filtration, corrosion inhibition, and conditioning of water in residential and commercial boiler systems. | ||
| Energy Solutions | |||
| Offshore Fluids | Offshore fluids are used to operate valves for the deep-water oil extraction and transportation process, and drilling fluids are used to operate valves for drilling rigs on the ocean floor. Production and drilling fluids are water-based hydraulic fluids used in subsea control systems. |
Competitive Strengths
We believe the following competitive strengths differentiate our businesses from competitors and contribute to our ongoing success:
•Industry Leading Positions. We diligently focus on building and maintaining leading positions in niche sectors of high-growth markets by offering innovative products and high value-added services to our customers. We believe our scale and global reach provide us with advantages that together, allow us to attract talent, serve leading customers, and drive profitable growth.
•Customer Driven Innovation. We work closely with our customers, OEMs and other industry participants to develop new products and identify new market opportunities. We participate in a variety of dynamic end-markets where new unmet needs are always materializing. Our sales and technical service teams provide continuous insights that help ensure our research and development efforts are appropriately focused. Customer requirements can lead to improved or uniquely tailored formulations of existing product offerings or to the development of completely new products to satisfy previously unmet needs. Tailoring products for specific OEMs leads to long-term relationships and significant customer switching costs.
•Comprehensive Offering of Critical Products. We provide our customers with a comprehensive offering of products that are critical to their efficient operations. In many cases, we offer a full suite of products with complementary capabilities that provide a complete functional solution to our customers. We believe the ability to provide an “end-to-end” product offering is a significant competitive advantage over many of our smaller competitors. Additionally, we believe our breadth of touchpoints from circuit formation through circuit assembly is unique in the market and allows for a broader dialogue with customers in electronics end-markets. We also believe that our existing product offerings provide many opportunities for growth in adjacent end-markets.
•Stable Cash Flow and Low Capital Requirements. Our businesses typically generate high profit margins and require low capital expenditures to grow which translate into high cash flow margins and returns on capital. Instead of large investments in physical assets to sustain business or grow, we focus our investments on our technological innovation or sales and services areas. Our business involves the formulation of a broad range of
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specialty chemicals created by blending raw materials and incorporating them into multi-step technological processes. This model allows us to conservatively manage our fixed asset investments. We believe our existing fixed asset base is well-maintained and, accordingly, requires low ongoing capital expenditures.
•Performance-Driven Culture, Experienced Management and Board with Proven Track Record. We place a premium on maintaining an expert and qualified employee base to provide innovative products and specialized technical service to our customers. We believe we have outstanding people who can deliver superior performance under the guidance and oversight of proven, experienced leadership. Our culture is performance-driven and decentralized. We empower our business teams and hold them accountable for their outcomes and business judgment. We measure our performance against industry benchmarks relating to efficiency growth and profitability, and drive operational excellence through continuous improvement. Our experienced management team is complemented by our experienced Board of Directors, which includes individuals with proven track records of successfully managing and growing businesses. In addition, both of our segments are led by executives who have extensive experience in their respective fields.
Business Strategies
We are building a best-in-class global specialty chemicals technology company. Our primary long-term measures of success are the value we create for our customers, the growth opportunities we provide for our people and the growth in the intrinsic value of our shares, which is a byproduct of value to customers, a strong meritocratic culture and prudent capital allocation. Our decentralized model dictates that each of our businesses develops its own strategy tailored to its specific market opportunities; however, each of those strategies roughly falls into the following categories:
•Commercial Excellence. We understand that reliably meeting our customers' needs through a focus on high-quality and reliable service leads to success for all parties. From product development and applications excellence through quality manufacturing and on-time delivery, we demand a customer-focus from all levels of the organization. We believe that we can capitalize on our existing technical capabilities, sophisticated process know-how, and strong industry relationships to enable customer success.
•Market Leading Innovation. Our customers participate in dynamic markets driven by innovation, which means that we too must place a strong emphasis on innovation. We work alongside our customers and OEMs to develop leading edge products based on our significant intellectual property portfolio, process experience and technical expertise. Building on our core competencies in product innovation, applications development and technical service should help drive organic growth. Innovation helps develop new high-growth markets and technologies and expand upon our existing portfolio with new products for current and adjacent markets.
•Enabling Sustainability. It is both socially responsible and commercially compelling to develop sustainable solutions that exceed the increasingly stringent environmental standards of our customers and regulators. As part of our innovation and product development process, we actively partner with governments, industry groups and universities to develop commercially viable, environmentally friendly solutions for our customers' use around the world. Enabling our customers to improve their environmental footprint will allow us to do well by doing good.
•Decisiveness and Action Orientation. A customer-oriented, customer-service driven organization requires decentralized decision making. We encourage our employees to make decisions and empower them to act swiftly to meet the ever-changing local needs of our customers. Clear communication, strong strategic alignment and a culture that rewards good judgment allow us to ensure the right decisions are being made by our trusted global workforce.
•Recruitment and Talent Development. Our success is a by-product of the efforts and capabilities of our people from our research and development laboratories to our customers’ manufacturing floors. Our technical expertise and innovation track records are the result of a specialized, highly-skilled workforce. Our ability to drive profitable growth through technical process know-how, strong customer relationships and industry knowledge relies on our ability to attract, grow and retain highly-skilled and motivated teams at all levels of our organization.
•Disciplined and Prudent Capital Allocation. Our capital efficient business model translates to stable, substantial free cash flow. Our ability to grow the intrinsic value of our shares relies on deploying that capital prudently. We intend to be opportunistic with the allocation of our free cash flow and may pursue organic investments in priority markets, bolt-on and strategic acquisitions and stockholder-friendly capital returns, such as share repurchases or dividends. Our investment decisions will be driven by comparing relative and absolute risk adjusted returns expectations.
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Customers
Our businesses have diverse customer bases and sell products either directly to end-user customers or through intermediaries. We also have collaborative relationships with many OEMs and industry partners, who specify our chemistries and technologies for use in their products or grant us development rights to their intellectual property.
We believe that we are able to attract new customers successfully through our international reach, coupled with our local knowledge and on-the-ground presence, which enable us to meet the needs of our customers. We operate a relatively large number of small and medium-sized facilities located close to our customers throughout the world's major economic regions. This close proximity to our global customers' local sites enables access to key growth markets and, along with our efficient formulation process, allows for "just in time" supply chain management.
We believe that our businesses are not materially dependent upon any single customer with no customer representing 10% or more of our consolidated net sales in 2025, 2024 or 2023.
Due to the relatively short cycle times in the majority of our businesses, our order backlog levels are minimal.
Selling & Marketing
We employ a customer-centric and highly-technical sales and marketing force worldwide. These professionals have robust technical expertise and local market knowledge and cultivate strong customer relationships. Our local sales and marketing teams closely monitor market trends and maintain active dialogue with our customers to assess and understand their constantly evolving challenges. We use this information from our local sales teams to anticipate future needs and respond rapidly to changing market conditions or technologies in order to swiftly deliver customized, value-added solutions to our customers. This feedback loop is an important source of new product ideas and helps guide our capital allocation decisions and research and development initiatives.
Our methods for selling and marketing our proprietary products vary slightly by geographic region. We generate business through the efforts of regional sales, technical and service personnel as well as distributors. In addition to regional sales and service staff, we maintain a group of global personnel focused on coordinating sales projects and obtaining design specifications for complex projects involving multiple customers within the manufacturing supply chain.
Human Capital Management
We strive to embody the five elements of our culture, our “5 Cs”: Challenge, Commit, Collaborate, Choose and Care. These core behaviors are the foundation of our organization and pave the path for our success. We believe they reinforce our strategic objectives and empower our employees in their day-to-day work and when serving and engaging with our customers globally.
At December 31, 2025, we employed approximately 5,200 full-time employees, of which approximately 40% are research and development chemists and experienced technical service and technical sales personnel. Our full-time employees are based throughout the world, with approximately 80% employed outside of the U.S. In certain countries where we operate, our employees are also members of unions or are represented by works councils. We believe our relationships with our employees and collective bargaining unions are satisfactory.
Occupational Health and Safety. As a specialty chemicals company, the success of our business is fundamentally connected to the safety of our employees. To promote worker safety, we are committed to training our workforce on workplace safety and security. As part of our safety program, we host an annual Global Safety Day during which our leaders emphasized the importance of safety through discussions, videos and targeted training. We also launched a Fall Mental Health initiative with activities ranging from yoga sessions to awareness and resilience training. As part of our safety program, we track injury and illness rates locally and maintain emergency and disaster recovery plans. We also offer benefits designed to support employees' physical, mental and financial well-being, including parental leave, healthcare, life insurance and disability coverage programs.
Inclusion. We believe that innovation and problem-solving thrive when people with diverse perspectives and experiences work together, which in turn allows us to compete effectively. To support this approach, our talent program is based on policies designed to ensure fair hiring practices and prevent discrimination and harassment. In 2025, we continued to train managers and other employees on inclusivity in the workplace and made progress toward our goal to increase gender diversity at management-level globally. In addition, we promote further employee connection and engagement through a variety of initiatives, including our employee resource groups (ERGs), which allow discussions of common interest across all businesses and geographies, and which in turn helps us attract and retain diverse candidates.
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Talent Retention and Development. We operate a customer-centric, people-oriented model. Our human capital strategy is based on three pillars: the attraction, acquisition and engagement of highly-skilled employees. Accordingly, we invest in creating opportunities to help employees grow and build their careers through training, professional development and education programs. In 2025, we launched our first annual Learning Day event during which guest speakers, colleagues and leaders from across the organization shared knowledge and experiences through live sessions but also featured content, videos and other learning resources. In December, we also kicked off our "12 Days of Learning" ESI challenge in which we offered a curated selection of training sessions for employees to attend every day. As part of our talent management efforts, we track internal KPIs related to career development and internal promotion, and regularly review talent development and succession plans for our functions and segments. In addition, we conduct regular global employee culture surveys to collect feedback on our employees' experience at the Company as well as their views on leadership, understanding of our culture, and sense of inclusion. These surveys are part of our continuous improvement mindset around building a robust culture that is both engaging and aligned with our core value of "Care."
Social and Community Impact. We believe that building connections among our employees, their families and our communities creates a more meaningful, fulfilling and enjoyable workplace. The Company has a longstanding commitment to social impact by supporting communities in which we operate and encouraging the contributions of our employees with our ESI Cares program. Through our engagement initiatives, our employees can connect with volunteering opportunities and nonprofit organizations of their choice, supporting causes they care about, locally and/or globally, including education, humanitarian relief and underserved communities. The ESI Foundation further supports our purpose through a gifting and donation matching program. It also focuses on causes important to the environmental and social well-being of these communities, such as EARTHDAY.ORG's The Canopy Project®, which in 2025 helped us celebrate Earth Day with the planting of trees around the world. In 2025, global donations through our ESI Cares program benefited over 1,300 charitable organizations, including charities focused on environmental protection, mental health, human rights and humanitarian initiatives, such as The Everglades Foundation, The Alzheimer's Association, Easter Seals, and Habitat for Humanity.
For more information on our workforce prosperity efforts, social and community impact and sustainability goals, see our ESG reports and ESG supplements posted on the Sustainability section of our website. The information included in our sustainability reports, supplements or website is not a part of this 2025 Annual Report and is not incorporated by reference.
Research and Development
Innovation is critical in our industry and to our success. Continued investment in research and development ensures that we remain ahead of emerging trends and continue to strengthen our strong positions in our market niches. Our research and development activities are focused on developing products, and improving formulations and processes, not only to respond to or anticipate customers' changing needs, but also to drive growth or otherwise add value to our core business operations and those of our customers. We accelerate market introductions and increase the impact of our local product offerings through collaboration with partners in the academic and commercial sectors (customers and value-chain partners) and by working with customers and OEMs on tailored application development around the world through our technical service teams. We plan to continue making meaningful investments in a broad range of research and development efforts.
Our commitment to technological innovation and extensive intellectual property portfolio enables us to develop differentiated products at the forefront of technological advances. Research resulting in new, proprietary formulations is performed principally in the United States, Germany, United Kingdom and India. During 2025, our research and development expenses totaled $67.6 million. Substantially all research and development activity was performed internally.
Competitive Environment
Our markets are competitive and subject to rapid changes in technology. Our businesses provide solutions in markets across the electronics value chain, general metal and plastic finishing, and offshore oil and gas exploration and production.
Our businesses compete primarily on the basis of quality, technology, performance, reliability, brand, reputation, service, range of products and services, and support. We maintain extensive technical support and testing services for our customers and are continuously developing new products to meet their needs. Further consolidation within our industry or other changes in the competitive environment could result in larger competitors that compete with us across several business areas. In addition, some of our competitors may have greater financial, technical and marketing resources than we do and may be able to devote greater resources to promoting and selling certain products. We believe, however, that our ability to manufacture, sell, service and develop new products and applications enables us to compete successfully. Some large competitors operate globally, as we do, but most operate only locally or regionally. We also face competition from many smaller companies that specialize in particular segments of the markets in which we compete.
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The specific competitive environment of each of our segments is described below:
Electronics
Our Electronics segment provides a broad line of proprietary chemical technologies, materials and supporting services and broadly competes within the electronics materials industry. Although competition varies by end-market and geography, our most significant competitors are MKS Instruments, Qnity Electronics, Inc., Henkel Corporation, Senju Metal Industry Co. and Uyemura International.
Specialties
Our Specialties segment provides a broad line of proprietary chemical technologies and supporting services, and broadly competes within the specialty chemicals industry. Although competition varies by end-market and geography, our most significant competitors are MKS Instruments, Quaker Houghton, and Castrol.
Sources and Availability of Raw Materials
Our businesses formulate a broad range of specialty chemical process technologies, which we create by blending raw materials and incorporating them into multi-step technological processes. Our global operations depend upon obtaining adequate supplies of raw materials on a timely basis. We typically purchase our major raw materials as-needed from outside sources and we work closely with these suppliers to help ensure continuity of supply while maintaining high quality and reliability. As part of our sustainability efforts, we recycle certain raw materials, primarily tin, in our own smelting and refining facility in the U.S. for further use in our manufacturing process. We seek to use local sources where possible but the majority of the raw materials we use are obtainable from multiple conformant sources worldwide.
Patents, Trademarks and Proprietary Products
We maintain an extensive intellectual property portfolio, which we developed or acquired over a number of years. This portfolio includes a combination of patents, copyrights, trade secrets, trade names, trademarks and other forms of intellectual property rights in major markets and other commercially-relevant jurisdictions worldwide. Although we believe the ownership of such intellectual property rights is an important factor in our businesses, we also rely on the innovative skills, technical competence and selling abilities of our personnel.
We regularly file patent applications to protect innovations arising from our research and development. At December 31, 2025, we owned, had applications pending, or licensed the rights to, approximately 2,600 domestic and foreign patents, which have remaining lives of varying duration. Although certain of these patents are important to our business, no specific group or groups of intellectual property rights are material to our business overall, and we have many proprietary products which are not covered by patents.
We also rely on confidentiality agreements and patent, trade secret, trademark and copyright law as well as judicial enforcement to protect our technologies, processes, product composition, formulations and other intellectual property rights. In addition, we implement confidentiality procedures, contractual exclusivity and other rights necessary to protect our proprietary intellectual property, formulations, processes and other product-related rights. We also enter into invention or patent assignment agreements, when applicable, with our employees, consultants, contractors and other third-parties who may be engaged in discovery or development of intellectual property and other proprietary rights. Finally, we seek to include provisions in our material transfer agreements, license and development agreements and other agreements that provide for the transfer of intellectual property rights back to us to the greatest extent possible under the circumstances of any specific transaction and development project.
Government Regulations
As a global specialty chemicals technology company, we are subject to various, complex and evolving federal, state, local and international laws and regulations relating to the development, manufacture, sale and distribution of our products across the countries in which we operate. These regulations include, but are not limited to, those relating to safety, health and environmental (SH&E) matters.
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Compliance with SH&E requirements has not had, and in the future is currently not expected to have, a material adverse effect on our capital expenditures, results of operations and competitive position as compared to prior periods. However, SH&E requirements are gradually becoming more stringent and may cause us to incur additional costs, fines or penalties in the future. These evolving requirements include, without limitation, increasing levels of product safety, such as chemical composition, packaging and labeling, as well as environmental protection, such as the management, movement and disposal of hazardous substances and the clean-up of contaminated properties. In addition, as climate change and other ESG-related directives, standards and frameworks are adopted and implemented around the world, we will be required to comply with additional SH&E requirements in the future, and there can be no assurance that future capital expenditures or incremental operating expenses required to ensure compliance will not be material.
Climate-related regulations, including those limiting or taxing greenhouse gas (GHG) emissions, may also provide new business opportunities for our company. Enabling sustainability is a pillar of ESI's strategy and our R&D teams collaborate with our product marketing, regulatory and safety teams to lead the development of our sustainable chemistry and processes. In terms of GHG emissions, we develop technologies to help our facilities and our customers lower energy consumption and improve efficiency. We also offer a variety of solutions that enable clean technology and, as such, may benefit from the upcoming transition to a lower carbon economy.
We believe we are in material compliance with environmental laws and regulations applicable to our operations, and consider the liabilities recorded at December 31, 2025 for our various environmental matters to be appropriate.
For additional information about the risks related to government regulations, please refer to “Item 1A. Risk Factors.”
Available Information
Our internet website address is www.elementsolutionsinc.com. We make available free of charge, through our website, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, and proxy statements for our annual meetings of stockholders as soon as reasonably practicable after these are electronically filed with or furnished to the SEC. The SEC also maintains an internet website available at www.sec.gov that contains reports, proxy and information statements and other information filed by issuers, such as Element Solutions.
The information on or linked to our website is not incorporated by reference into, and does not form a part of, this 2025 Annual Report or any of our other SEC filings.
Corporate Information
Our principal executive offices are located at 500 South Pointe Drive, Suite 200, Miami Beach, Florida 33139 and our telephone number is (561) 207-9600.