Leading cleaning and sanitation products maker, Ecolab (ECL) has been selected by the prestigious Forbes magazine as one of “The World’s Most Innovative Companies” in 2013. It ranks 33rd out of 100 companies named on the list slated to be released in the Sep issue.
This recognition, which applauds the company’s innovative product offerings, is a significant boost to Ecolab’s brand name. ECL has been featuring on the list ever since the annual ranking was initiated in 2011. The company has met the magazine’s criteria of seven years of public financial data along with market-cap of $10 billion, which is above the net present value (NPV) of cash flows from existing businesses.
Ecolab has 16 Research & Development (R&D) centers across the globe with 1,600 scientists aggressively working to bring out environmental friendly products for the water, oil and gas, antimicrobial science, automation and dispensing solutions industries. The company has invested $183 million in R&D in 2012.
Some of the other awards which Ecolab won in 2013 include The Bloomberg Business 50, in which, it ranked 19th for best recent performance and future outlook. It also ranked 28 on the list of 40 Best Companies for Leaders announced by Chief Executive magazine.
Moreover, the FTSE4Good Index recognized Ecolab as it met globally recognized corporate social responsibility standards related to environmental, social and governance practices. The company was also named in Ethisphere Institute's list of the World’s Most Ethical Companies for the 7th successive time and included in the China Entrepreneur Club (CEC) list of China’s Top 100 Green Companies for sustainability efforts.
With a background of robust growth, Ecolab is poised to gain momentum via its aggressive strategy of rolling out new products. The company recently launched the Advantis FC Cleaning Program, a high-foaming, chlorinated alkaline cleaner for reduced temperature foam cleaning in food and protein processing. ECL also launched its latest Kay Heated Soak Tank Program for quick service restaurants (:QSR).
Although we are impressed by Ecolab’s strong international exposure, we remain cautious about its strong competition. Challenging economic and market trends in 2013 together with unfavorable internal issues are likely to be the near-term headwinds for the company. Further, raw material price inflation remains a cause of concern.
ECL has a Zacks Rank #3 (Hold). Other companies from the basic materials sector such as Ferro Corp. (FOE), carrying a Zacks Rank #1 (Strong Buy), along with Sensient Technologies Corp. (SXT) and KMG Chemicals (KMG), carrying a Zacks Rank #2 (Buy), are expected to do well.
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