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Dow Expands Hand Sanitizer Production to Combat Coronavirus

Dow Inc. DOW announced that its production sites in Auburn, MI; South Charleston, WV; Seneffe, Belgium; and Hortolandia, Brazil, have the requisite raw material handling, mixing and packaging capabilities to manufacture hand sanitizers. Notably, at each site, the company collaborated with officials to understand their needs and requirements. The sites will join Dow's site in Stade, Germany, which is already producing hand sanitizers.

The company usually does not manufacture hand sanitizers, although a significant majority of the necessary raw materials are readily accessible at its sites. Moreover, the flexibility of Dow's assets enables a meaningful volume of sanitizer to be generated, with minimal or little effect to normal operations.

Dow's Auburn facility can manufacture around 15,000 pounds (7 metric tons) of hand sanitizer each week, which is equivalent to 30,000 eight-ounce bottles. The other sites are projected to produce equivalent or greater quantities. Notably, Dow's total capacity is projected to surpass 440,000 pounds (200 metric tons) or the equivalent of more than 880,000 eight-ounce bottles, when all of the sites are at full production.

Production of hand sanitizer will take place in the four sites for approximately four weeks, after which time the company will assess extending production, depending on the availability of raw material and market needs. Notably, the first delivery of hand sanitizers will commence this week.

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The majority of hand sanitizers produced at the sites will be given to health systems and government agencies for distribution. Also, hand sanitizer will be distributed to better protect employees, who are on the frontline, to ensure that Dow’s manufacturing facilities continue to operate safely.

Per management, the combined efforts of the company’s five sites across the world allow it to manufacture and distribute enormous amounts of hand sanitizers to help protect human health and safety. Notably, this effort was made possible by Dow’s rapid actions in collaboration with the suppliers of raw material, state, and federal regulatory officials and volunteers. The company also stated that it will continue to manufacture hand sanitizers as long as raw materials are available and supply is short.

Dow's current manufacturing facilities are crucial to supply many of the most important sanitation, and medical products and technologies such as disinfectants, sanitizers, cleansers, and plastics to better tackle the coronavirus pandemic.

The company’s shares have moved down 48% in the past year compared with the industry’s decline of 41.9%.

 

 

On the fourth-quarter 2019 earnings call, Dow stated that it will continue to focus on advancing its investments in higher-return growth projects, especially in sectors where it is seeing favorable demand conditions. The company also expects to retain its competitive cost position by leveraging its unique feedstock capabilities.

Dow also expects to further reduce cost structure in 2020 as it completes the stranded cost removal. The company also intends to direct its free cash flows toward debt reduction and boost shareholders’ returns.

Dow Inc. Price and Consensus

 

Dow Inc. Price and Consensus
Dow Inc. Price and Consensus

Dow Inc. price-consensus-chart | Dow Inc. Quote

Zacks Rank & Stocks to Consider

Dow currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the basic materials space are NovaGold Resources Inc. NG, Franco-Nevada Corporation FNV and Barrick Gold Corporation GOLD.

NovaGold has a projected earnings growth rate of 11.1% for 2020. The company’s shares have surged 77.4% in a year. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Franco-Nevada has a projected earnings growth rate of 24.7% for 2020. It currently carries a Zacks Rank #2 (Buy). The company’s shares have rallied 33.9% in a year.

Barrick Gold currently has a Zacks Rank #2 and a projected earnings growth rate of 43.1% for 2020. The company’s shares have gained 36.1% in a year.

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