Sika AG focuses on growth: investments in China, Brazil and Morocco!

Sika AG focuses on growth: investments in China, Brazil and Morocco!

Sika AG, the world's largest construction chemicals group, is continuing its growth path with new investments in China, Brazil and Morocco. These strategic measures are intended to strengthen competitiveness in the various regions and support the company on its path to sustainable and profitable growth. With a price of 215.15 CHF, Sika is slightly in the loss zone today with a change of -0.21%.

85.5% of Sika's sales come from construction chemicals, which include additives for concrete, mortar, repair mortar and sealants. The remaining 14.5% are chemicals for industrial production processes. Geographically, the company records notable sales shares, with the Europe, Middle East and Africa region accounting for 40% of total sales. The USA contributes 22.7%, followed by China with 10.4% and the Asia-Pacific region with 11.5% of revenues.

Growth strategy and expansion

The company's future prospects are supported by a variety of factors, such as the opening of a modern mortar and tile adhesive manufacturing plant in Liaoning, China, and the doubling of production capacity at the Bekasi plant, Indonesia. These investments are part of a comprehensive strategy to gain market share and increase sales in the various markets in which Sika operates.

For 2024, Sika reports sales growth in local currencies of 11.2% in the Americas region. This growth is strengthened by government-funded infrastructure projects and positive developments in commercial construction. Important acquisitions, such as Kwik Bond in the USA and Chema in Peru, also contribute to strengthening the market position. In the EMEA region, where sales increased by 7.3%, Sika maintains a solid presence despite challenging conditions in European construction markets.

Global challenges and market developments

However, the project business in China remains a challenge, despite government support measures. This shows an increase in sales of just 2.4%, while other South fluids, especially in Southeast Asia, show high organic growth. Developments in the automotive sector, which are reflected in declining sales of new vehicles, are influencing the demand for construction chemicals for the automotive sector.

The strategic investments in Brazil and Morocco are intended to further help Sika to further increase market shares and optimize overall performance in these important regions. According to company derivations, the business environment is expected to recover in 2024 and EBITDA increases will be disproportionately high. The company's full results will be released on February 21, 2025, further fueling expectations of potentially strong financial results.

While the average price target of CHF 261.48 anticipates positive market development, Sika remains well positioned - thanks to its high level of diversification and strategic expansion - to meet the challenges of the market and at the same time continue growth. Further details on Sika's business success can be found in Sika AG report and MarketScreener.