As their production volumes and stock prices show signs of a cyclical uptick, specialty chemical companies find competitive advantages by aiming for growth in emerging markets.
“I think any company that is exposed to growth in the developing countries and has invested in the infrastructure to access that growth has opportunities before it,” said Steven Schwartz, a research analyst for First Analysis Securities Corp. “It is not only because the developing countries, particularly the Asian countries, held up relatively better through this global recession, but also because of the longer-term secular trend that is going on with these populations raising their standard of living.”
Mr. Schwartz names Albemarle (ALB), PolyOne (POL) and Valspar (VAL) among the companies currently supplying products, such as plastic housings and wires for cars, and flame-retardant materials, to developing markets with increasing standards of living.
The analyst also points to Calgon Carbon (CCC), which boosted capital spending by 50% from 2008 to 2009 and is expected to continue to see increased cap ex, as an exemplary benefactor of these developing international opportunities.
“Calgon, which is one of several global producers, is in a strong position to supply a market where demand is forecasted to grow as much as 10% annually, according to some third-party estimates,” Schwartz said, adding that Calgon is projected to increase cap ex in 2010 by 35%. “The spending is primarily to expand their capacity, which makes their strategy sound almost like a startup company that invests all of its free capital back into the business to support growth.”
Citigroup Inc (C) to Gain Investor Interest with Dividend Boost and Developing Markets Growth
January 30, 2015
Building Infrastructure in the Developing World
December 12, 2007
Will Rooftop Solar Securities Turn SolarCity (SCTY) to REIT? Lazard (LAZ) and Raymond James (RJF) Analysts See Developing Market
August 16, 2013
Tyson Foods, Inc. (TSN) Developing Integrated Production in China to Overcome Food Safety Concerns
April 30, 2014
Cytori Therapeutics Inc. (USA) (CYTX) Developing Promising Stem Cell Device
August 08, 2014
