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Chemical and advanced materials maker, Celanese Corporation (CE - Analyst Report), and Japan’s Mitsui & Co., Ltd. have entered into a 50-50 joint venture for making methanol at Celanese’s integrated chemical plant in Clear Lake, Tex.

Methanol is used as a basic raw material in a wide range of industries, including the manufacture of adhesives, synthetic resins and pharmaceuticals.

As partners in the joint venture, Celanese and Mitsui will build a methanol facility which will have an annual capacity of 1.3 million tons. The facility is expected to begin operations in mid-2015.

The methanol facility will use low-cost natural gas, which is plentiful in the U.S. Gulf Coast region as a feedstock, and will also benefit from the existing infrastructure at Celanese’s Clear Lake facility.

The total shared capital and expense involved in the facility would amount to about $800 million, of which, Celanese will have to invest roughly $300 million.

Celanese’s Clear Lake facility, where it had invested earlier, along with the attractive economics of natural gas in the U.S. Gulf Coast region, provides it with an attractive growth opportunity.

Mitsui, on the other hand, will be able to generate additional value in the gas product chain ranging from its shale gas reserve in the U.S. to methanol along with Celanese’s advanced capabilities in manufacturing, operations and safety. Mitsui has a global sales network, while Celanese is one of the world's biggest users of methanol.

Celanese currently carries a short-term (1 to 3 months) Zacks Rank #1 (Strong Buy).

Other companies in the chemical industry that are worth considering include Shin-Etsu Chemical Co., Ltd. (SHECY), Methanex Corp. (MEOH - Analyst Report) and FMC Corp. (FMC - Analyst Report). While Shin-Etsu Chemical and Methanex retain a Zacks Rank #1 (Strong Buy), FMC carries a Zacks Rank #2 (Buy).

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