We manufacture and distribute our products globally. Revenue from non-U.S. markets accounted for approximately 68%, 66%, and 66% of our revenue for the years ended December 31, 2022, 2023, and 2024, respectively. We have significant international operations which, along with our customers and suppliers, could be substantially affected by a number of risks arising from operating a multi-national business, including:
- global or regional economic downturns;- changes in tariffs, trade barriers, and regulatory requirements, such as the enactment of tariffs on goods imported into the U.S. including, but not limited to, the recently enacted tariff on goods imported from Canada where we manufacture a significant portion of the TiO2 we sell in North America. Tariffs could make our products more expensive which would reduce demand or require us to absorb the increased costs reducing our operating margins;- protectionist laws, policies, and business practices and nationalistic campaigns such as economic sanctions and exchange controls;- U.S. relations with the governments of the other countries in which we operate;- terrorism, armed conflict (such as the current conflicts between Russia and Ukraine and Israel and Hamas);- natural disasters, pandemics or other health crises, climate change and other events beyond our control;- difficulties enforcing agreements or other legal rights; and - our effective tax rate may fluctuate based on the variability of geographic earnings and statutory rates.
TiO2 production requires significant energy input, and economic sanctions or supply disruptions resulting from armed conflict could lead to additional volatility in global energy prices and energy supply disruptions. These risks, individually or in the aggregate, could have an adverse effect on our results of operations and financial condition.
We are experiencing increasing competition from China. Chinese competition generally has lower operating costs due to less stringent regulatory and environmental compliance requirements and less expensive energy prices. China has dumped lower cost sulfate process TiO2 into the markets we serve. In some cases, the TiO2 industry has been successful in getting anti-competitive duties enacted on Chinese imports such as the European duties enacted in 2024.
The U.S. federal government has recently implemented tariffs on certain foreign goods and may implement additional tariffs on foreign goods. For example, on March 4, 2025, the U.S. government implemented a 25% tariff on all imports from Mexico and Canada into the U.S. As we currently manufacture a significant portion of our North American TiO2 in Canada, if sustained for an extended period of time, the 25% tariff on our imports into the U.S. from Canada, without exclusion, will make our products manufactured in Canada and sold into the U.S. more expensive. As a result, demand for these products could be reduced, or we could be required to absorb the increased costs or increase prices of such products. Such tariffs and, if enacted, any further legislation or actions taken by the U.S. government that restrict trade, such as additional tariffs, trade barriers and other protectionist or retaliatory measures taken in response, could adversely impact our ability to sell our products in the U.S. or reduce our revenues and gross margins. These measures may also increase our costs of Canadian feedstock imported into the U.S. and could adversely impact our gross margins or require us to raise prices thereby making our products less competitive. Additional tariffs imposed by the U.S or any retaliatory or reciprocal tariffs imposed by other countries could also increase the cost of feedstock and other raw materials that go into making TiO2, the extent of which is unknown. The ultimate impact of any tariffs will depend on various factors, including the length of time tariffs are ultimately implemented and the amount, scope and nature of the tariffs.