US Honeywell's UOP adding capacity to serve $2.4bn backlog

17 April 2014 17:21 Source:ICIS News

HOUSTON (ICIS)--Honeywell's UOP business is adding capacity, particularly on the catalyst side, to serve its $2.4bn backlog, the company's chief financial officer (CFO) said on Thursday.

CFO Tom Szlosek did not provide details about the expansion. However, the company had announced in October that it plans to build a new catalyst and absorbents plant in China.

In particular, it will produce catalysts to support UOP’s Oleflex propylene production technology. UOP has licensed its Oleflex technology to 19 Chinese producers over the past three years.

For the first quarter, UOP sales grew by 9% because of higher volumes from catalysts sales and gas processing, Szlosek said. This was partially offset by an unfavourable mix in catalyst shipments and lowering licensing sales from the process technology.

For the second quarter, UOP should have double-digit sales growth, Szlosek said.

UOP provides process technology and produces catalysts. It is part of Honeywell's performance materials and technologies segment, under which the company also produces nylon 6, phenol, acetone, hydrofluoric acid and fluorochemicals.

Honeywell’s profit for the segment fell 3% year over year in Q1 2014 to $364m on the back of unfavourable shipment numbers for some products, pricing materials headwinds and growth investments.

Sales increased 2% year over year during the quarter to $1.75bn.

Additional reporting by Stefan Baumgarten and Tom Brown

By Al Greenwood