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Leading cleaning and sanitation products maker Ecolab Inc. (ECL - Analyst Report) has expanded its Research, Development & Engineering (RD&E) Center in Campinas, São Paulo. The facility has been expanded to 1,300 square meters, which is almost the double of its previous size. The expansion is intended to support research and development activities throughout Latin America, especially Brazil.

The acquisition of Nalco and Champion Technologies along with two more local takeovers has expanded Ecolab’s base in Latin America. Hence, management has taken up this expansion initiative to work closely with its customers and value chain partners in this particular region.

The facility at Campinas incorporates labs that develop solutions to improve Ecolab’s oil and gas operations. The recently acquired Houston, Texas-based Champion Technologies is a leading specialty company. Ecolab acquired Champions to become a giant in the oilfield chemical business and reduce competition for its Nalco subsidiary. The expansion of the facility will allow the company to develop new technologies for the acquired entities.

The center also has labs that research on industrial water applications for the mining, pulp and paper, sugar and brewing industries. Moreover, there are labs that create innovative solutions for the company’s cleaning and sanitizing as well as food and beverage processing businesses.

In addition to developing new technologies to meet the needs of its strong customer base, scientists at Ecolab’s facility will promote existing technologies such as 3D Trasar technology for cooling water, Pareto mixing technology for the paper industry, Wash ‘n Walk enzyme-based floor cleaner and DryExx dry lubricants for bottlers in the region.

Our Take

Based in St. Paul, Minn., Ecolab serves the foodservice, food and beverage processing, healthcare and hospitality markets. The company remains focused on bringing new technologies into the market. We believe that the expansion of the research center is a good move, as Latin America represents a key growth area for the company’s overseas operation.

Ecolab currently has a Zacks Rank #3 (Hold). Other companies from the basic materials sector such as American Vanguard Corp. (AVD - Snapshot Report), OM Group Inc. (OMG - Snapshot Report) and Minerals Technologies Inc. (MTX - Snapshot Report) warrant a look. While AVD and OMG are Zacks Rank #1 (Strong Buy) stocks, MTX carries a Zacks Rank #2 (Buy).

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