Global sanitation products company, Ecolab Inc. (ECL) recently opened a new manufacturing and distribution center in China. The facility is located in Taicang and will manufacture the products which will be marketed in China.
Ecolab entered the Chinese market in 1987 with innovative solutions in support of China’s food-related businesses and has invested $150 million in the country since 2008. The Taicang facility is the company’s sixth plant in China and is poised to be the leading driver of Ecolab’s sustained growth in the country.
The 546,000 square-feet property is Ecolab’s largest in the Asia-Pacific region and the third largest globally. The center will initially employ 55 employees and eventually increase the number to more than 350 by 2017.
The plant is eco-friendly as it has been specially built to minimize waste production, energy and water utilization. In addition, the industrial wastewater will be converted by the center’s wastewater treatment plant into re-usable distilled water.
The facility has the capacity to manufacture 150,000 tons of products annually. The plant will produce a full range of sanitation, food safety, cleaning, and infection prevention products inclusive of food retail, food and beverage production, healthcare, hospitality and dairy, meat and poultry processing.
The company’s decision to build another plant in China is in line with the Chinese government’s Five-Year Plan to focus on improving food quality and safety in the nation. In June 2012, the company had partnered with China’s State Food and Drug Administration Institute for Executive Development (SFDAIED) to carry out training on food safety for the food service industry.
Although its competitors like Clorox (CLX) and Church & Dwight (CHD) have significant presence in the Chinese market, Ecolab’s social commitment in China remains unique. The company’s efforts have also been recognized by the Chinese authorities, as reflected by the various awards it has received in recent times.
We currently have a Neutral recommendation on the stock, which carries a short-term Zacks #3 Rank (Hold).
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