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DowDuPont's (DWDP) Unit to Boost Methyl Cellulose Capacity

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DowDuPont Inc.’s (DWDP - Free Report) subsidiary, The Dow Chemical Company, has declared that it is making a series of investments for methyl cellulose capacity expansion. The move will help customers of construction dry mix to secure a reliable supply of key additives. These capacity expansions also demonstrate the company’s commitment to the dry mix industry.

Dow Chemical will increase methyl cellulose production capacity at its manufacturing facilities in Bomlitz and Bitterfeld, Germany, which will help the company to address customer demand for high-quality cellulose ether products. Notably, expansion projects represent a capacity enhancement of 19,000 metric tons for Dow Chemical’s Methocel and Walocel cellulose ethers. These ethers are used in various applications for grouts, fillers, adhesives, levellers, and joint compounds, cement-based renders and gypsum plasters. The new capacities are expected to be onstream in 2019 and 2020.

The company is committed to innovation and aims to expand product portfolio with differentiated solutions. These help its customers drive performance improvements in a competitive market.

DowDuPont’s shares have lost 19.4% in the past three months compared with the industry’s decline of 16.9%.

 



During third-quarter 2018 earnings call, DowDuPont stated that it is seeing strong global demand for products on business investment, manufacturing output, job growth and wage increases. The company will continue to focus on driving the top line from above-GDP demand growth for products and new launches as well as delivering productivity and cost synergy savings.

DowDuPont achieved cost synergy savings of more than $450 million in the third quarter. The company raised cost synergy commitment to $3.6 billion from $3.3 billion mentioned previously. Moreover, it raised year-over-year savings view for 2018 to $1.5 billion from $1.4 billion.

Dow Chemical Company (The) Price and Consensus

 

Zacks Rank & Stocks to Consider

DowDuPont currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the basic materials space are The Mosaic Company (MOS - Free Report) , Gerdau S.A. (GGB - Free Report) , and Air Products and Chemicals, Inc. (APD - Free Report) .

Mosaic’s shares have rallied 50.7% in the past year. The company has an expected long-term earnings growth rate of 7% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Gerdau has an expected long-term earnings growth rate of 24.3% and a Zacks Rank #2 (Buy). The company’s shares have climbed 19.8% in the past year.

Air Products has an expected long-term earnings growth rate of 11.8% and a Zacks Rank #2. The company’s shares have increased 2.2% in the past year.

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