Recently, Honeywell International Inc.'s (HON) group company, UOP LLC, opened a manufacturing and operations center in Penang, Malaysia for production of natural gas membrane elements.
This is part of the company’s initiative to support the flourishing natural gas market. Honeywell is engaged in development of technologies for production of clean sources of power supply.
With increasing environmental awareness, the demand for natural gas as a clean burning fuel has risen. Demand for such clean burning fuels has increased in developing economies as well, led by development of infrastructure and rising populations.
Natural gas streams contain impurities that are required to be removed before being used as fuels. Honeywell's UOP Separex membrane systems are effective in making the natural gas streams free of impurities. Furthermore, in comparison with other membrane systems, UOP’s Separex membrane systems consume less energy. They also require fewer capital and operating costs. The system requires less space for installation due to its modular design, which allows easier installation on off-shore applications, such as Floating, Production, Storage and Offloading (:FPSO) vessels, and remote locations.
Honeywell has expanded its expertise in production of natural gas and has also widened its reach globally. By 2035, the consumption of natural gas is expected to reach 160 trillion cubic feet with 35% of the demand being generated from Asia, as per the U.S. Energy Information Administration.
Last year, the company expanded its scope in this technology by forming an alliance with the Netherlands-based Twister B.V. Through this alliance, the company offered the UOP-Twister® Supersonic Gas Separation System. This separation system is used to remove water and heavy hydrocarbons present in natural gas when it comes out of the ground.
Furthermore, in 2008 a gas processing design center was formed by Honeywell’s UOP in Kuala Lumpur, Malaysia. Other gas processing technology design centers of the company are in Des Plaines, Ill. (headquarters), and Antwerp, Belgium, and it manufactures membranes in Anaheim, Calif., and Littleton, Colo., in the U.S.
Honeywell expects to deliver solid results in 2012, despite the macro uncertainty. The positive outlook is driven by the company’s strong hold in good industries and continuous effort to undertake new ventures. In order to expand further, the company remains focused on its growth factors, i.e., investments in new products, technology demarcation, expansion in the emerging markets and initiatives in key processes. Honeywell’s growth is supported by its five Initiatives – growth, productivity, cash, people, and enablers.
UOP LLC, based in Illinois, is a leading supplier and licensor of process technology, catalysts, adsorbents, process plants and consulting services to the petroleum refining, petrochemical, and gas processing industries, globally. The company is a wholly-owned subsidiary of Honeywell and is part of Honeywell's Performance Materials and Technologies strategic business group.
During the latest reported quarter, Performance Materials and Technologies sales increased 19% to $1.6 billion, led by good sales from UOP and licensing. The segment revenue was partially offset by unfavorable pricing and low demand in Asia and Europe for Specialty Products.
Honeywell International is a diversified technology and manufacturing company serving customers worldwide with aerospace products and services, control, sensing and security technologies for buildings, homes and industry, turbochargers, automotive products, specialty chemicals, electronic and advanced materials, process technology for refining and petrochemicals and energy efficient products and solutions for homes, business and transportation. The major competitors of Honeywell are BorgWarner Inc. (BWA), United Technologies Corp. (UTX) and Johnson Controls Inc. (JCI).
We currently maintain our longer-term Outperform rating on Honeywell.
Honeywell currently has a Zacks #3 Rank (implying a short-term Hold recommendation) over the next one-to-three months.
More From Zacks.com