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LyondellBasell's Spheripol is Chosen for PP Plant in Vietnam

Zacks Equity Research

LyondellBasell Industries N.V.’s LYB Spheripol polypropylene process technology has been selected by Phu My Plastics Production JSC for a 300 KTA plant in Vietnam. The process is a widely used polypropylene (PP) technology globally and is well established in Asia.

The technology was picked for the PP project owing to its strong licensing record along with the operational expertise of LyondellBasell and the well-established Spheripol PP product position across Southeast Asia and Vietnam.

Spheripol is a leading PP process technology with more than 25 million tons of licensed capacity. The fifth generation Spheripol technology includes process improvements, which maximizes the company’s operational efficiency. The plant will start operations using Avant ZN (Advanced Ziegler-Natta) catalyst, which includes non-phthalate, metallocene and chromium catalysts for the full range of polyolefin production.

Notably, new licensees may take advantage of LyondellBasell’s in-house expertise of continuous production improvement. They can leverage the company’s sustainable product development and catalyst knowhow by the joining Technical Service program, which is optional.

Shares of LyondellBasell have lost around 29.8% over the past year compared with the industry’s decline of 33.1%.



LyondellBasell’s adjusted earnings came in at $2.22 per share in the first quarter of 2019, surpassing the Zacks Consensus Estimate of $2.20. The company gained from improved market demand in the quarter.

The company witnessed the signs of industry improvement within the first few weeks of April. It also noted that strong market sentiment is driving margins in its Olefins & Polyolefins - EAI segment.

Moreover, LyondellBasell is seeing volume improvement in its Olefins & Polyolefins — Americas unit. It is also witnessing an uptick in the refining market with higher gasoline spreads and wider discounts for heavy sour crude oil.

The company will advance its growth strategy and boost earnings with a robust pipeline of licensing revenues for 2019. It will also initiate its world-scale HDPE plant in the third quarter.

Zacks Rank & Key Picks

LyondellBasell currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the basic materials space are Materion Corporation MTRN, Fortescue Metals Group Ltd. FSUGY and AngloGold Ashanti Limited AU, all currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Materion has an expected earnings growth rate of 23.1% for 2019. The company’s shares have gained 15.5% in the past year.

Fortescue Metals has an expected earnings growth rate of 101.5% for the current year. The stock has soared 74.5% in a year’s time.

AngloGold has an expected earnings growth rate of 86.8% for 2019. Its shares have rallied 43% in a year.

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