Honeywell International Inc.’s (HON) group company, UOP LLC, will be providing techniques to Kumho P&B Chemicals Inc., a South Korean company for producing key petrochemicals for the manufacture of plastics. Honeywell's UOP will provide engineering design, technology licensing, catalysts, adsorbents and technical service for the project.
Kumho's Yeosu, South Korea, facility will integrate Honeywell's UOP Q-Max and UOP Phenol process technologies to produce high-quality phenol. With the rising demand for automobiles, appliances and electronics, the demand for materials formed from petrochemicals is expected to increase by about 9% in Asia.
This will be the largest cumene production unit on which Honeywell has worked till date. The annual production capacity of the units will be 900,000 metric tons of cumene and 300,000 metric tons of phenol. Production at the new units is expected to start in 2013-2014. Honeywell's UOP continues to provide advanced technologies to meet the rising demand for petrochemicals worldwide.
Honeywell’s short-cycle businesses as well as its commercial aerospace spares and residential and commercial retrofit businesses are performing impressively well and are expected to support the company’s future growth outlook. The company’s short-cycle businesses like Turbo Technologies, Advanced Materials, and ACS Products continue to perform well. Honeywell’s long-cycle backlog continued to be at near record levels.
The company expects to face a more challenging macro environment in 2012, witnessing slower year-over-year growth worldwide in GDP and industrial production. With a robust long-cycle backlog of almost $16 billion, strong growth in commercial aerospace aftermarket, and continued contributions from short-cycle businesses, the company expects to grow faster than its end markets. In 2012, Honeywell will deliver strong earnings growth and free cash flow conversion, led by its good portfolio mix and continued margin expansion.
Based in Morris Township, N.J., Honeywell International Inc. is a Fortune 100 company providing technical and manufacturing support to customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; automotive products; turbochargers; and specialty materials. The major competitors of Honeywell are BorgWarner Inc. (BWA), United Technologies Corp. (UTX) and Johnson Controls Inc. (JCI).
We currently maintain our Outperform rating on Honeywell, with a Zacks #2 Rank (Buy recommendation) over the next one-to-three months.
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