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LyondellBasell to Construct Molecular Recycling Facility

Zacks Equity Research

LyondellBasell Industries N.V. LYB recently announced the construction of its latest small-scale pilot facility at the company’s Ferrara site in Italy, taking a step ahead toward the conversion of post-consumer plastic waste into new plastics.

LyondellBasell’s MoReTec molecular recycling technology shows that the use of a catalyst in the pyrolysis process, or the structural breakdown of plastic waste into molecules is quicker and more energy-efficient than conventional chemical recycling.

The goal of MoReTec is to recycle plastic waste, such as multi-layer films, back to the molecular state using a proprietary catalyst-based approach to produce new plastic for all uses, including food and healthcare products.

Per LyondellBasell, the company’s investment in a small-scale pilot facility will lead to the advancement of its MoReTec technology toward commercial scale, in addition to continued catalyst development.

Per LyondellBasell, this solution has significant potential, given its lower-energy use and faster chemical-conversion process which requires less heat. The company will continue to build its pilot facility at Ferrara, while also concentrating on the impact of different types of waste on the molecular recycling process, catalyst selection, and process conditions.

The company is also actively engaged in mechanical recycling through its joint venture with SUEZ – Quality Circular Polymers (QCP) – which turns post-consumer plastic waste into new plastic pellets used in applications ranging from electrical appliances, detergent bottles and suitcases. LyondellBasell has also created new bioplastics from 100% recycled raw materials, such as cooking and vegetable oil waste, that can be used to make products such as food packaging, toys, and furniture.

LyondellBasell’s shares have gained around 0.8% in the past three months compared with the roughly 5.1% decline recorded by the industry.


 

The company’s buyout of A. Schulman will generate significant cost synergies. The integration is progressing well, and at the end of second-quarter 2019, the company captured cost synergies at an annual rate of around $100 million.

In addition, LyondellBasell’s HDPE project is expected to boost its capacity and drive bottom-line growth. The facility will have an annual capacity of 1.1 billion pounds. The company is also constructing a world scale plant on the U.S. Gulf Coast for the production of propylene oxide (PO) and tertiary butyl alcohol (TBA). The plant will have annual capacity of 1 billion pounds of PO, and 2.2 billion pounds of TBA and its derivatives.

LyondellBasell Industries N.V. Price and Consensus

LyondellBasell Industries N.V. Price and Consensus

LyondellBasell Industries N.V. price-consensus-chart | LyondellBasell Industries N.V. Quote

Zacks Rank & Key Picks

At present, LyondellBasell carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Kinross Gold Corporation KGC, sporting a Zacks Rank #1 (Strong Buy), Alamos Gold Inc AGI and Newmont Mining Corporation NEM, both carrying a Zacks Rank #2 (Buy), currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Kinross has an estimated earnings growth rate of 170% for 2019. The company’s shares have rallied nearly 62.5% in a year’s time.

Alamos Gold has a projected earnings growth rate of a whopping 340% for the current year. The company’s shares have appreciated 10.3% in the past year.

Newmont has an expected earnings growth rate of 5.19% for the ongoing year. The company’s shares have gained 16.8% over the past year.

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