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Chemical company Celanese Corporation (CE - Analyst Report) announced that it plans to build a methanol production unit at its facility in Bishop, TX. The company is preparing for necessary environmental permits to build the unit.

The facility is expected to have a capacity of 1.3 million tons per annum. The unit will use low-cost natural gas in the U.S. Gulf Coast region as a feedstock and would benefit from the existing infrastructure at the site.

The methanol unit to be constructed at Bishop will have similar scope and scale as the methanol unit which is under construction at the company’s Clear Lake, TX facility. Celanese will also consider a joint venture for the Bishop unit in the same way as it has undertaken a joint venture for its methanol unit under construction at the Clear Lake.

The Bishop facility is bestowed with good infrastructure and provides economies of scale along with strategically upstream production of methanol. The plant has been acknowledged as a global leader in environmental, health and safety performance by many industry, state and federal organizations. The facility manufactures specialty chemicals, engineered materials and pharmaceutical products.

Celanese is a global technology and specialty materials company that engineers and manufactures a wide variety of products necessary for everyday life. The company posted its fourth-quarter 2013 results on Jan 23. The company’s earnings (excluding one-time items) of $1.04 per share beat the Zacks Consensus Estimate of $1.01.

Earnings (as reported) from continuing operations came in at $4.16 per share in the quarter as against a loss of $1.05 recorded a year ago.
Sales in the quarter were $1,616 million, up 7.7% year over year, surpassing the Zacks Consensus Estimate of $1,560 million.

For 2014, Celanese expects earnings growth on the back of company-specific initiatives to be consistent with its long-term growth plans. The company-specific initiatives including innovation of new products and enhancement of efficiencies through productivity are expected to drive earnings in 2014. Celanese expects to increase adjusted earnings before interest and taxes (EBIT) by roughly $100 million on the back of its strategic actions.

Celanese currently carries a Zacks Rank #3 (Hold).

Other companies in the chemical industry worth considering include PPG Industries Inc. (PPG - Analyst Report), Cytec Industries Inc. (CYT - Snapshot Report) and The Dow Chemical Company (DOW - Analyst Report), each carrying a Zacks Rank #2 (Buy).

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