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Univar Inks Canadian Distribution Deal With TATA Chemical

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Univar Inc. (UNVR - Free Report) and TATA Chemicals Ltd entered into a Canadian national distribution agreement, which is bringing new fermented and digestive health ingredients to the Canadian market.
TATA Chemical is the leading player in basic chemistry products and India's Consumer and Specialty products.  Its Nutritional Solutions division TATA NQ offers nature-backed and scientifically supported digestive health ingredients with specific benefits to meet the rising nutritional trends.

The agreement makes Univar the exclusive distributor of TATA NQ's Fossence and Gossence prebiotic dietary fiber portfolio of ingredients in the Canadian market. These fibers have a vast range of usage, including functional foods (bakery, dairy, snack foods), dietary supplements, confectionaries as well as pet food.

TATA Chemical’s manufacturing excellence and in-house bio-fermentation process along with Univar's technical proficiency and market reach will provide customers with new opportunities to develop innovative products.
Shares of Univar have lost around 24.5% in the past three months compared with the industry’s decline of 17.6%.

During the third-quarter earnings call, Univar stated that it expects foreign exchange headwinds and challenges in Canada to dampen growth in the fourth quarter. The company expects fourth-quarter adjusted EBITDA to be flat compared with year-ago quarter’s results. The guidance also considers demand softness in certain markets.

For 2018, Univar anticipates adjusted EBITDA growth of high single-digit while adjusted earnings per share are projected at roughly $1.60 per share, reflecting an increase of 15.1% from the prior year.

Univar Inc. Price and Consensus



Zacks Rank & Stocks to Consider

Univar currently carries a Zacks Rank #4 (Sell).

A few better-ranked stocks in the basic materials space include CF Industries Holdings, Inc (CF - Free Report) , Methanex Corporation (MEOH - Free Report) and The Mosaic Company (MOS - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CF Industries has an expected long-term earnings growth rate of 6%. The company’s shares have risen 17.2% in the past year.

Methanex has an expected long-term earnings growth rate of 15%. Its shares have gained 6.6% in a year’s time.

Mosaic has an expected long-term earnings growth rate of 7%. The company’s shares have rallied 43.8% in the past year.

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