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Dow (DOW) & Mengniu Launch PCR Shrink Film in Greater China

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Dow Inc. (DOW - Free Report) and Mengniu, China's leading dairy company, have recently announced the commercialization, under a collaborative venture, of a collation shrink film made with the former’s post-consumer recycled (PCR) resins in the latter's product packaging.

The newly formulated product, a 100% recyclable one-pellet resin, is among the first of its kind in the food and beverage industry in the Asia-Pacific region.

Dow makes use of plastic waste gathered from milk, water and juice bottles, as well as discarded flexible film within China, and alters them into PCR resins. The introduction of such recycled content in secondary packaging lets brand owners like Mengniu reduce carbon footprint and reconstruct used plastics so as to not let them add to the existing plastic waste.

This alliance is in sync with Dow's commitment to a sustainable business. It aims to engage in waste reduction by enabling the transformation of 1 million tons of plastic through its direct actions and partnerships by 2030.

Dow noted that the advent of new end markets for plastic waste promotes the alteration of plastic waste through reuse and recycle, thereby reducing the plastic content entering the ecosystem. Partnerships like this will allow it to achieve circular economy solutions and prevent environmental wastage.

Mengniu stated that the collaboration to lead the green development in the dairy industry and its earlier partnership with Dow for constructing China's first-ever 'plastic road' using recycled milk bottles position it well in its trajectory of a circular economy.

Shares of Dow have gained 59.5% in a year, higher than the industry’s growth of 55.7%. The company’s estimated earnings growth rate for the current year is pegged at 303.6%.

Zacks Investment ResearchImage Source: Zacks Investment Research

The company, in its last earnings call, noted that it expects its businesses to benefit from the ongoing economic recovery, supported by the progress in vaccine distribution and tight market fundamentals. It is well placed for sustained value creation throughout this year and beyond on the back of its geographic scale, advantageous cost positions, differentiated feedstock flexibility, leadership position in high-growth markets and top-quartile cash generation.

Dow Inc. Price and Consensus

Dow Inc. Price and Consensus

Dow Inc. price-consensus-chart | Dow Inc. Quote

Zacks Rank & Key Picks

Currently, Dow carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the basic materials space are Cabot Corporation (CBT - Free Report) , Olin Corporation (OLN - Free Report) and Tronox Holdings PLC (TROX - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cabot has a projected earnings growth rate of 125.9% for the current year. The company’s shares have risen 69.9% in a year.

Olin has a projected earnings growth rate of 506.7% for the current year. The company’s shares have soared 277.9% in a year.

Tronox has a projected earnings growth rate of 242.9% for the current year. The company’s shares have jumped a whopping 214.7% in a year.

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