DowDuPont Inc.’s (NYSE:DWDP) subsidiary The Dow Chemical Company (NYSE:DOW) declared that its Dow Industrial Solutions business unit plans to expand its propionic acid facility in Texas City, TX to address the rising global demand. The expansion is expected to be completed by 2019.
Kronos Worldwide Inc (KRO): Free Stock Analysis Report
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Dow Chemical Company (The) (DWDP): Free Stock Analysis Report
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The propionic acid market is growing, courtesy of rising demand for long lasting foods and animal feed and grain alternatives. The move is in sync with the company’s plan to support growth of this market along with debottlenecking projects completed at the Texas City facility in 2015 and 2017.
Propionic acid acts as an anti-mold and anti-bacterial agent for animal feeds and grains lowering product wastage. This provides producers with economic and environmental benefits and promotes sustainability.
In addition to this, Propionic acid acts as a preservative for foods, such as baked goods and cheese, as well as an anti-mold agent for various bread products thus increasing the shell-life of packaged food.
DowDuPont has underperformed the industry it belongs to over the past three months. The company’s shares have moved up around 1.9% over this period compared with roughly 6.2% gain recorded by the industry.
DowDuPont, during third-quarter 2017 earnings call, said that demand outlook remains positive for most key end-markets. It remains focused on executing near-term priorities that include delivering earnings and cash flow growth, executing its $3-billion cost synergy initiatives and advancing activities to create three growth companies in Agriculture, Materials Science and Specialty Products.
DowDuPont also announced to take actions to enable cost savings of $3 billion. These include workforce reductions, buildings and facilities consolidations and select asset shutdowns. DowDuPont recorded pre-tax charges of $180 million in third-quarter 2017 in connection with the actions that are approved so far. It expects to record total pre-tax charges of around $2 billion, with around $1 billion expected in fourth-quarter 2017.
Zacks Rank & Stocks to Consider
DowDuPont currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Kronos Worldwide Inc. (NYSE:KRO) , Koppers Holding Inc. (NYSE:KOP) and Westlake Chemical Corporation (NYSE:WLK) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kronos Worldwide has expected long-term earnings growth of 5%. Its shares have gained 115.3% year to date.
Koppers has expected long-term earnings growth of 18%. Its shares have rallied 20.8% year to date.
Westlake Chemical has expected long-term earnings growth of 10.6%. Its shares have moved up 79.8% year to date.
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Kronos Worldwide Inc (KRO): Free Stock Analysis Report
Koppers Holdings Inc. (KOP): Free Stock Analysis Report
Westlake Chemical Corporation (WLK): Free Stock Analysis Report
Dow Chemical Company (The) (DWDP): Free Stock Analysis Report
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