Honeywell International Inc.’s (HON - Analyst Report) group company UOP LLC received a contract from Jiangsu Haili Chemical Industry Co. Ltd. to provide key technologies at its facility in Dafeng City, Jiangsu Province, China for the production of propylene, cumene and phenol.
UOP’s UOP C3 Oleflex™ process technology will be used by Jiangsu Haili’s facility for the conversion of propane to propylene, a substance used in the production of films and packaging and similar type of other materials. Further, through a combination of the UOP Q-Max™ and UOP Phenol™ process technologies, cumene will be converted to phenol. Phenol is the basic material for making plastic and nylon.
About 510,000 metric tons of propylene, 473,000 metric tons of cumene and 360,000 metric tons of phenol is expected to be produced by the new unit every year. Production at the new unit is expected to be initiated by 2014.
The technology from Honeywell is well suited to meet the rising demand for propylene and phenol throughout the world. Specifically, China is witnessing an increased investment in new units by petrochemical producers to meet the demand of both its domestic and foreign customers. The UOP C3 Oleflex™ process technology was commercialized in 1990 and since then nine C3 Oleflex units have been commissioned by UOP for propylene production. The tenth unit is being setup in Russia, with production expected to start in 2012.
Based in Morris Township, N.J., Honeywell International Inc. is a Fortune 100 company providing technical and manufacturing support to customers worldwide. It also provides aerospace products and services; control technologies for buildings, homes and industry; automotive products; turbochargers; and specialty materials. Major competitors of Honeywell are BorgWarner Inc. (BWA - Analyst Report), United Technologies Corp. (UTX - Analyst Report) and Johnson Controls Inc. (JCI - Analyst Report).
We currently maintain our Outperform rating on Honeywell, with a Zacks #3 Rank (Hold recommendation) over the next one-to-three months.