Celanese (CE) Updates on Ibn Sina JV Polyacetal Facility

Chemical maker, Celanese CE has provided an update on its Ibn Sina joint venture (JV) and the construction of a 50,000-metric ton polyacetal manufacturing plant in Jubail Industrial City, Saudi Arabia.

The construction of the facility will support future growth of the polyacetal industry in the region. Polyacetal is primarily used in automobile and electronics industries in addition to mechanical and construction manufacturers and other industrial applications.

Celanese said that the polyacetal facility is currently in the testing phase in preparation for commercial production that is expected in third-quarter 2017. Upon the start-up of the plant, the company's economic interest in Ibn Sina will increase to 32.5% from 25%.

Ibn Sina is a JV between SABIC and CTE, an entity jointly owned by subsidiaries of Celanese and Duke Energy. Celanese, Duke Energy and SABIC entered into the JV back in 1981. Subsidiaries of Celanese and Duke Energy presently hold a 25% interest in the JV each, with the balance 50% held by SABIC.

Construction of the polyacetal manufacturing plant is part of an extension of the JV that will run through 2032. For the production of polyacetal, the facility will use methanol as feedstock that is being made internally at Ibn Sina.

Celanese has outperformed the Zacks categorized Chemicals-Diversified industry over a year, partly attributable to its strategic measures including productivity and efficiency improvement actions. The company's shares have gained around 24.4% over this period, compared with roughly 15.8% gain recorded by the industry.

Celanese's strategic measures including cost savings through productivity actions should lend support to its earnings in 2017. The company sees its adjusted earnings per share to increase 8–11% in 2017.

The company's Advanced Engineered Materials unit is expected to continue to grow offsetting the decline in tow earnings. The company's Acetyl Chain unit is also anticipated to benefit from a volatile raw materials backdrop and the current industry environment is expected to improve profits as the year progresses.

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

Celanese Corporation Price and Consensus

 

Celanese Corporation Price and Consensus | Celanese Corporation Quote

Stocks to Consider

Better-ranked companies in the chemicals space include Huntsman Corporation HUN, Kronos Worldwide, Inc. KRO and The Chemours Company CC, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Huntsman has an expected long-term earnings growth of 7%.

Kronos has an expected long-term earnings growth of 5%.

Chemours has an expected long-term earnings growth of 15.5%.

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