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Celanese (CE) & Mitsubishi Chemical Partner for Recycled POM

Celanese (CE) joins forces with Mitsubishi Chemical to develop a sustainable and recyclable end-product formulation using the POM-based approach.

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This story originally appeared on Zacks

Celanese Corporation CE and Mitsubishi Chemical Advanced Materials (“MCAM”) have collaborated to develop mechanical recycling solutions for post-industrial and post-consumer sources of polyoxymethylene (POM), also known as acetal copolymer. The initiative is in the light of customer requests for recycled content options and carbon dioxide reductions, which will also maintain product consistency, quality and performance.

The companies plan to gauge possible options to convert waste streams into marketable, end-product formulations so that Celanese can deliver sustainable alternatives for scrap or end-of-life waste with assurances of closed-loop material reuse.

In November 2020, Celanese introduced POM ECO-B, a sustainable polyacetal product featuring a mass-balance, bio-based characteristic enabling customers to cut down carbon dioxide emissions in their end-use products. Despite POM ECO-B’s commercial availability, presently, many customers and industries lack the readiness to adopt the biomass balance approach.

The joint venture advances Celanese’s sustainable product offering by initiating a recycled content option of its Hostaform/Celcon POM product, to be marketed as POM ECO-R. MCAM will be responsible for conducting the recycled feedstock collection, separating and processing, while Celanese will be providing the technology for formulation and production capability. The company seeks to offer its customers POM ECO-R solution that will have a recycled content of up to 30%.

Celanese noted that the collaboration, which utilizes waste products, makes POM’s utility broad-based and extends its usage as an engineered material promising to achieve sustainability goals.

MCAM stated that its investment in closed-loop opportunities for post-industrial and post-consumer POM waste streams earlier, along with the new partnership, will empower it to offer customers a wide range of options to help achieve their sustainability goals.

Celanese shares have grown 25.9% over the past year compared with the industry’s 11.2% rise. The company’s estimated earnings growth rate for the current year is pegged at 140%.

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In its third-quarter earnings call, Celanese stated that demand for its products remains strong in most end markets as it enters the fourth quarter. It expects pent-up demand across Engineered Materials and Acetyl Chain units to more than offset any impact of typical year-end seasonality. Notwithstanding the sourcing and logistics headwinds, the company expects to deliver fourth-quarter adjusted earnings of roughly $5.00 per share.

With the anticipated closing of the Santoprene acquisition in the fourth quarter, Celanese expects to have deployed more than $2.7 billion in 2021 for mergers and acquisitions, organic investments and share repurchases. The company said that these actions position it well in a strong demand environment to deliver adjusted earnings of at least $15.00 per share for 2022.

Zacks Rank & Other Key Picks

Celanese currently carries a Zacks Rank #2 (Buy).

Other top-ranked stocks in the basic materials space are Univar Solutions Inc. UNVR and AdvanSix ASIX, flaunting a Zacks Rank #1 (Strong Buy) and Dow Inc. DOW, carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Univar has an expected earnings growth rate of 55.2% for the current year. The Zacks Consensus Estimate for the current year has been revised around 9% upward over the past 60 days.

Univar beat the Zacks Consensus Estimate for earnings in all the four trailing quarters. The company delivered a trailing four-quarter earnings surprise of roughly 24.1%, on average. Its shares have also rallied around 52.3% over a year.

AdvanSix has an expected earnings growth rate of 197% for the current year. The Zacks Consensus Estimate for the current year has been revised 14.1% upward over the last 60 days.

AdvanSix beat the Zacks Consensus Estimate for earnings in all the four trailing quarters. The company pulled off a trailing four-quarter earnings surprise of roughly 47%, on average. Its shares have also surged 150.8% over a year.

Dow has an expected earnings growth rate of 447% for the current year. The Zacks Consensus Estimate for earnings for the current year has been revised 8.7% upward over the past 60 days.

Dow beat the Zacks Consensus Estimate for earnings in all the four trailing quarters. The company pulled off a trailing four-quarter earnings surprise of roughly 14.12%, on average. Its shares have also gained around 2.5% over a year.



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