ExxonMobil Corporation (XOM - Free Report) recently announced that it has started construction of a new production unit at its polyethylene plant in Beaumont. The cost of the project has not been disclosed.
Beaumont is located about 80 miles east of downtown Houston and this new unit will be part of a multibillion-dollar investment by the company along the Gulf Coast.
Construction of the new unit is underway, wherein current polyethylene production capacity is one million tons per year.
Scheduled to come online in 2019, the new unit will expand capacity by about 65% or about 650,000 tons per year. Two similar polyethylene units are also being added by ExxonMobil at its Mont Belvieu Plastics Plant, about 30 miles east of downtown Houston.
Collectively, the projects will augment the company’s U.S. polyethylene production by 40% or about 2 million tons per year. It will also make Texas the largest polyethylene supply point for ExxonMobil.
Based on 2015 Impact Data Source estimates, the expansion of the Beaumont polyethylene plant is expected to generate 1,400 construction jobs and 40 permanent jobs as well as generate $20 billion in economic activity in the first 13 years of operation.
Notably, this is the third major investment by ExxonMobil in the Beaumont area over the past 18 months. Other investments at Beaumont by the company include expansion of the refinery's crude refining capabilities and construction of a new unit to increase domestic supply of ultra-low sulfur gasoline and diesel.
However, the magnitude of contribution of the polyethylene business to ExxonMobil's overall financial results is unclear as it is never broken out separately. It also was not mentioned in the company's latest earnings conference call.
ExxonMobil currently has a Zacks Rank #3 (Hold). Some better-ranked players from the same sector are SunCoke Energy Inc. (SXC - Free Report) , Futurefuel Corp. and TransCanada Corporation (TRP - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
SunCoke Energy posted a positive earnings surprise of 177.78% in the preceding quarter. It reported a positive earnings surprise in three of the four preceding quarters.
Futurefuel Corp. posted a positive earnings surprise of 20.83% in the preceding quarter. It reported a positive earnings surprise in all of the four preceding quarters.
TransCanada posted positive earnings surprise of 22.92% in the last reported quarter.
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