Methanex Corporation MEOH reported that it has successfully completed its first commercial production of methanol on Dec 27, 2015, from its newly finished 1 million ton Geismar 2 methanol plant in Geismar, LA. The facility was shifted from Methanex's production site in Punta Arenas, Chile.
According to John Floren, President and CEO of Methanex, the Geismar 2 facility has started methanol production almost three months prior to its original schedule and management anticipates the plant to further ramp up to full production rates in the forthcoming weeks. The start-up of the Geismar 2 plant has increased the company’s operating capacity by around 3 million tons over the last three years.
Per management, the total combined cost for the completion of the two Geismar plants is around $1.4 billion, which amounts to significant cost savings concerning a new-build plant. Additionally, Methanex anticipates the Geismar 2 plant to generate considerable cash flow and value for shareholders.
Methanex is the world’s largest supplier of methanol to North America, the Asia-Pacific, Europe and Latin America. The company expects methanol-to-olefins demand in fourth-quarter 2015 to increase owing to the commencement of production at facilities.
Methanex anticipates stable demand growth from chemical applications in China and the rest of the world. The company also expects growth in energy-related methanol demand.
Methanex currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the diversified chemical space include LyondellBasell Industries N.V. LYB, PPG Industries, Inc. PPG and Innospec Inc. IOSP. While LyondellBasell sports a Zacks Rank #1 (Strong Buy), both PPG Industries and Innospec carry a Zacks Rank #2 (Buy).
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