Company: SXT
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001140361-25-005084
Chunk: 19

Company: SENSIENT TECHNOLOGIES CORP
Filing Date: 2025-02-19
Form: 10-K
Item: Item 1A
Chunk 19
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 offerings from some of our customers. Even after the pandemic receded, this trend has continued to a degree. Any of these actions by our customers can adversely affect
          our results. Furthermore, effective in 2027, the Food and Drug Administration banned the use of Red 3 in food and beverages, and California passed a ban on the use of synthetic food colorants in school lunches. Numerous other states also have
          various legislative proposals to ban or restrict the use of synthetic colors. In addition, the Trump administration has expressed an interest in re-examining the use of synthetic food colorants. While we have a broad portfolio of natural color
          and applications capabilities that enable us to offer alternatives and replacements for synthetic colors to customers, it is possible that such laws could reduce our revenue if our customers find alternative suppliers or remove color from their
          products.

          12

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                If we do not maintain an efficient cost structure, our profitability could decrease.

Our success depends in part on our ability to maintain an efficient cost structure. We regularly initiate cost-reduction measures that could impact our manufacturing, sales, operations, and information systems
          functions. If we do not continue to manage costs and achieve additional efficiencies, or we do not successfully implement related strategies, our competitiveness and our profits could decrease. As discussed above, the price pressures in our
          markets make such cost reduction efforts particularly important. For example, in 2023, the Company began the execution of a Portfolio Optimization Plan to optimize certain production facilities, centralize and eliminate certain production and
          selling and administrative positions, and improve efficiencies globally within the Company. These types of activities have required, and may continue to require, the devotion of significant resources and management attention and may pose business
          risks. In addition, these actions may result in a deterioration of employee relations at the impacted locations in our business. Our ability to realize anticipated cost savings may be affected by a number of factors, including our ability to
          effectively reduce overhead, rationalize manufacturing capacity, and effectively produce products at the consolidated facilities. Furthermore, our cost reduction efforts may not be as effective as we had anticipated, which could have an adverse
          effect on our financial condition.

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                A disruption in our supply chain could adversely affect our profitability.

We generally rely on third party suppliers for various raw materials that we use to make our products. We use many different chemical products, natural products, and other commodities as raw material ingredients.
            We also use raw materials whose