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Honeywell to Provide Tech to China Facility

Zacks Equity Research

UOP LLC, a subsidiary of Honeywell International Inc. (HON), recently announced that it was selected by China's Lijin Petrochemical Plant Co., Ltd., which will use Honeywell's UOP C4 Oleflex process technology to produce key ingredients for fuels and synthetic rubber. However, this announcement on May 8 failed to cheer investors as the stock price dropped 0.17% on Friday, May 9.

Lijin Petrochemical Plant Co., Ltd., a subsidiary of the Lihuayi Group, is one of the major local petrochemical enterprises in China. The new unit is expected to begin production at its facility in China in 2015 with 170,000 metric tons of isobutylene produced annually. Additionally, Honeywell's UOP will provide the engineering design, technology licensing, equipment, staff training and technical service at the China facility.

The UOP C4 Oleflex process technology will be used to produce isobutylene, a vital ingredient for fuels and synthetic rubber. Honeywell’s UOP Butamer process has been the leading technology in the industry for decades and increases the feedstock flexibility for the UOP Oleflex process. In the past three years, this is UOP's 15th  Oleflex project in China.

The technology from Honeywell is well suited to meet the rising demand for fuels and petrochemical in China. As the demand for fuel increases, producers are on the lookout for ways to maximize product yield and reduce production costs. Honeywell's UOP C4 Oleflex process technology fits the bill in this respect as the company has strong fundamentals, proven reliability and long track record of other UOP C4 dehydrogenation units operating around the world. All these factors make it a preferred choice for manufacturers.

Honeywell is a global diversified technology and manufacturing company with a wide range of products and services. These include 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 as well as energy efficient products and solutions for homes, business and transportation.

Honeywell currently has a Zacks Rank #3 (Hold). Other stocks that look promising and are worth a look include Icahn Enterprises, L.P. (IEP), Carlisle Companies Inc. (CSL) and ITT Corp. (ITT). While Icahn Enterprises sports a Zacks Rank #1 (Strong Buy), Carlisle Companies and ITT carry a Zacks Rank #2 (Buy).

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