Ashland, UPM in R&D Tie-Up
Specialty chemicals maker Ashland Inc. (ASH) has partnered with Finnish pulp and paper maker UPM to develop and market products containing the latter’s Biofibrils technology.
Biofibrils is a novel biomaterial which is based on micro or nano sized cellulose fibrils and can be used for shaping materials and giving them new characteristics. For instance, it can be utilized to improve the quality and performance of range of polymer products including coatings and construction materials, home and car care products and energy drilling applications.
Under the pact, Ashland and UPM will collectively study the application of biofibrils in a vast range of industrial application opportunities. The collaboration will see the union of two companies with extensive expertise in cellulose technology. The integration of UPM’s biofibrils technology with Ashland’s expertise in microfibrillar cellulose technology will enable the entities to offer new products and functionalities to their customers.
Ashland makes nickel and cobalt-based alloys in sheet, coil and plate forms.
Its Consumer Markets segment markets Valvoline, the world’s first lubricating oil. The company also operates the Valvoline Instant Oil Change, the nation’s second-largest franchised quick-lube chain with roughly 870 locations. Ashland offers specialty chemicals in more than 100 countries.
Ashland, in April, reported second-quarter fiscal 2013 (ended Mar 31, 2013) adjusted earnings (excluding one-time items) from continuing operation of $1.78 per share, outshining the Zacks Consensus Estimate of $1.56.
Profit from continuing operations, as reported, fell roughly 39% year over year to $55 million of 68 cents a share. Revenues fell 5% year over year to $1,974 million, missing the Zacks Consensus Estimate of $2,057 million. The company was challenged by weakness across a number of key regions, especially Europe. It witnessed lower sales across each of its business segments in the quarter on lower demand.
Ashland currently carries a short-term Zacks Rank #3 (Hold).
Other companies in the chemical industry that are worth considering include Shin-Etsu Chemical Co., Ltd. (SHECY), Methanex Corp. (MEOH) and FMC Corp. (FMC). While Shin-Etsu Chemical and Methanex retain a Zacks Rank #1 (Strong Buy), FMC holds a Zacks Rank #2 (Buy).
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