SQM Marketing Mix

SQM actively leverages strategic partnerships and joint ventures to bolster its market position. A prime example is its collaboration with Codelco for lithium operations in the Salar de Atacama, a venture designed to optimize resource extraction and production. These alliances are crucial for expanding capacity and ensuring sustained market access.

Further demonstrating this strategy, SQM partnered with Wesfarmers for the Mount Holland lithium project in Australia. This joint venture is expected to significantly boost SQM's lithium production capabilities. Such collaborations are vital for navigating the complexities of global resource development and market penetration.

• Codelco Joint Venture: Enhances lithium production efficiency in Salar de Atacama.
• Wesfarmers Partnership: Secures long-term access to Australian lithium resources.
• Capacity Expansion: These ventures directly contribute to increasing SQM's output.
• Resource Optimization: Joint efforts improve the management and utilization of key assets.

For SQM, efficient logistics are a cornerstone of its marketing mix, particularly for its bulk and specialty chemicals. The company recognizes that reliable delivery is paramount for its customers, ensuring they have the materials they need when they need them. This commitment translates into substantial investments aimed at bolstering their supply chain capabilities.

SQM's strategic investments in infrastructure underscore its dedication to operational excellence. A prime example is its significant investment in a seawater pipeline project. This initiative is designed to enhance the sustainability and reliability of its lithium and iodine production, directly impacting the availability and cost-effectiveness of its products for the market. By securing a consistent and environmentally sound source of raw materials, SQM solidifies its position as a dependable supplier.

This focus on operational efficiency and sustainable practices is not just about internal improvements; it directly benefits the customer by ensuring product availability and reducing the environmental footprint associated with the supply chain. These efforts contribute to SQM's overall value proposition, making it a more attractive partner in the competitive chemical industry.

Key aspects of SQM's logistics and supply chain optimization include:

• Infrastructure Investment: Continued capital expenditure on facilities and transportation networks to support growing demand and product diversification. For instance, SQM's capital expenditures in 2023 were approximately $1.4 billion, with a significant portion allocated to expanding production capacity and improving logistics.
• Seawater Pipeline Project: Ensuring a sustainable and cost-effective supply of water for its operations, which is crucial for the efficient extraction and processing of its key products. This project aims to reduce freshwater consumption by over 60% in its Atacama operations.
• Supply Chain Resilience: Developing robust strategies to mitigate disruptions and ensure consistent product delivery to global markets, a critical factor given the volatile nature of international trade and raw material sourcing.
• Sustainability Integration: Embedding environmental considerations throughout the supply chain, from raw material extraction to final delivery, aligning with global sustainability goals and customer expectations.

SQM’s long-term contracts are a cornerstone of its marketing strategy, providing a stable foundation for its lithium business. These agreements, often spanning several years, lock in sales volumes and prices with major clients, offering predictability in a volatile market. For instance, SQM has secured significant supply agreements with leading automotive manufacturers like Hyundai Motors and Kia Corporation.

These strategic partnerships are vital for several reasons. They not only stabilize revenue streams, shielding SQM from the sharp fluctuations common in commodity pricing, but also enhance investor confidence by demonstrating consistent demand and a clear path to future earnings. Such long-term commitments are critical for SQM's financial planning and operational efficiency, allowing for better resource allocation and investment decisions.

• Secured Revenue: Long-term agreements with key customers like Hyundai and Kia ensure consistent sales volumes for SQM's lithium products.
• Price Stability: These contracts help mitigate the impact of short-term price volatility in the global lithium market, providing a predictable revenue base.
• Investor Confidence: Demonstrating a solid base of committed customers bolsters investor confidence and supports SQM's valuation.
• Strategic Partnerships: Agreements with major automotive players solidify SQM's position as a key supplier in the growing electric vehicle supply chain.

SQM's pricing strategy is intrinsically linked to its production volumes and strategic capacity expansions. For example, the company saw a substantial 27% year-on-year increase in lithium sales volumes during the first quarter of 2025. This higher volume can effectively cushion the impact of any potential dips in average lithium prices, demonstrating how scale can influence pricing power.

Conversely, SQM's decision to reduce potassium production in 2025 is anticipated to result in lower overall sales volumes for that product line. This reduction in supply, driven by strategic adjustments, will likely have a direct bearing on its pricing for the potassium segment throughout the year.

• Lithium Sales Volume Growth (Q1 2025): 27% year-on-year increase.
• Impact of Volume: Higher sales volumes can offset lower average prices.
• Potassium Production Adjustment (2025): Planned reduction in output.
• Anticipated Effect: Lower sales volumes for potassium, potentially influencing pricing.