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New Cleaning Formulations from Ecolab

ECL CHD CLX

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Cleaning and sanitizing major Ecolab Inc (ECL - Analyst Report) has unveiled a new range of cleaning formulations for food and beverage industries. The product line dubbed “Mip,” consisting of ten cleaning formulation, has been designed to maximize cleaning efficacy in these industries.

The Minnesota-based company noted that the new product line will replace its existing caustic-based clean-in-place (“CIP”) cleaners and will be available for sale across Europe, and the Middle East and Africa (“EMEA”) in fourth-quarter 2011.

The Mip product line will cover all CIP applications such as tank, pipe and process equipment. These new formulations are expected to trim salt load in effluents by more than 30% and improve environmental performance for food and beverage producers.

Ecolab offers its products to the food and beverage industries through its United States Cleaning and Sanitizing (“USCS”) segment. Revenues from its food and beverage business grew at a double-digit clip in second-quarter 2011, benefiting from new customer wins, better pricing and product penetration. Management expects the healthy growth to sustain in the third quarter.

Ecolab develops and markets products and services for the hospitality, food services, institutional and industrial markets. The company offers cleaning, sanitizing, pest elimination, maintenance and repair products as well as systems and services. Ecolab leads in cleaning, sanitizing, pest elimination and food safety solutions with annual sales of roughly $6 billion.

To drive growth, Ecolab continues to invest in strategic areas such as, product innovation, healthcare, water and energy and global pest elimination while rationalizing operating costs. The company remains focused on bringing new technologies aimed at reducing food safety risks.

We are encouraged by Ecolab’s strong international exposure and recovery across its end-markets. However, Ecolab is faced with aggressive competition from the likes of Clorox (CLX - Analyst Report) and Church & Dwight (CHD - Snapshot Report). Moreover, raw material price hikes represent a headwind. We are currently Neutral on the stock.

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